DOJ and FBI Take a Closer Look into Collegiate Athletics: Necessary Policies and Compliance Safeguards in a Pay-to-Play Culture

Adidas, Nike, and Under Armour sponsor a combined 237 NCAA Division I men's basketball teams. For these sportswear brands, sponsorship makes sense. Adidas or Nike can associate themselves with a winning team or establish an early relationship with an athlete likely to go pro. These relationships put their brand in front of sports fans all across the country. For athletic programs and conferences though, these sponsorships have potential to attract attention from investigators and should be negotiated carefully. Last year's US Attorney's Office for the Southern District of New York and New York Office of the FBI's investigation into a senior executive at Adidas and four NCAA Division I assistant basketball coaches made clear that the US Government is ready to play. Deals made domestically and internationally lacking clear compliance oversight can have steep implications for all involved.

Domestically, the federal government's interest in prosecuting pay-to-play culture is in large part an effort to protect federal funds. The highest paid public state employee in nearly 40 out of 50 US states is a university men's football or basketball coach. As a result, athletic programs, coaches, and advisors who become involved in illicit pay-to-play arrangements could be defrauding entities funded by the government, which includes state and federal tax authorities.

Internationally, NCAA Division I and II sports have seen an increase in foreign student-athlete recruitment and participation. This steady increase in foreign student-athletes recruitment means an increase in international student-athletes receiving scholarships. Currently, about 11% of NCAA Division I and II student-athletes are international student-athletes. Of that group, roughly 200 hail from countries that scored 50 or below in Transparency International's most recent Corruption Perception Index (CPI). The number of student-athletes from countries with this level of CPI suggest increased potential risk as more teams engage with athletes in areas of the world where corruption is prevalent.

In a recent article in The Anti-Corruption Report , FRA Partner Jen Baskin, Director Jenna Voss, and Associate Will Meyer discuss at length the multitude of risks facing collegiate programs both domestically and internationally, including the rise in focus from the federal government.