Could Adidas scandal change how brands spend money on college sponsorships?

[jbcarol]

Corruption and bribery scandal currently engulfing college basketball raises questions about the future of college sports apparel deals

Before last Tuesday's bombshell FBI announcement that multiple college basketball coaches and apparel executives had been arrested, college sports benefitted from an apparel arms race to secure the top college brands. UCLA landed a 15-year, $280 million deal from Under Armour while Nike secured 15-year deals with Ohio State and Texas for $252 million and $250 million, respectively. Only two months ago, Louisville announced a 10-year, $160 million apparel deal that made it the highest-paid Adidas school in the country.

Deals kept getting bigger and bigger with seemingly no end in sight for what the apparel brands were willing to spend on a top-flight college program. This despite questions about the actual value these brands were getting from these multi-million dollar deals.

"Brands are spending far too much money on endorsement deals with no hope of seeing a return," says Matt Powell...

Jim Gatto, Adidas' director of global sports marketing, was arrested and accused of agreeing to pay $100,000 to steer "Player-10," identified in multiple reports as Brian Bowen, to Louisville. Another Adidas employee, Merl Code, was also arrested for his role in the corruption scheme. Adidas seemingly went out of its way to keep Louisville, its biggest college brand, happy as basketball head coach Rick Pitino, since suspended indefinitely without pay, carried considerable clout with the brand. "No one swings a bigger (expletive) than (Coach-2) at (Adidas)," Jonathan Brad Augustine, a Florida-based AAU director, said according to the FBI complaint. Coach-2 has since been identified as Pitino according to multiple reports.