Skechers filed a lawsuit against Adidas over the allegations at the heart of the FBI’s investigation into college basketball. Skechers charges it was at an unfair disadvantage due to the alleged schemes whereby Adidas paid amateur players for their endorsements.
The lawsuit, filed Wednesday in U.S. District Court in Los Angeles, argued that “illicit payments denied competitors like Skechers who play by the rules a fair opportunity to compete for the cachet of having trend-setting high-school and college athletes seen in their products.”
Skechers claimed it “has been harmed due to increased advertising and marketing costs and lost sales, market share and goodwill” as a result of Adidas’ actions.
“Skechers and other competitors’ basketball businesses cannot effectively compete for players’ footwear choices while they are amateurs—or for their endorsements when they turn professional—because Adidas has sought to ‘lock up’ players by paying secret, illegal bribes to them and/or their families,” the lawsuit said.
Adidas executive Jim Gatto and employee Merl Code were among 10 men arrested by FBI agents in late September, following a two-year investigation into bribes and other corruption in college basketball.
Skechers is seeking recovery of Adidas’ “ill-gotten profits, damages for lost sales and diminished brand value and increased advertising and marketing costs, and an injunction preventing Adidas from making further illegal, undisclosed endorsement payments to amateur basketball players,” according to the lawsuit.
Skechers is not a major player in the basketball shoe endorsement game but the lawsuit notes that the brand had signed Jamal Crawford and Josh Smith to endorsement deals as NBA players in the past. Former NBA players Karl Malone, Kareem Abdul-Jabbar and Larry Bird were also listed as former endorsees of Skechers. NBA owner Mark Cuban as well as former NFL quarterbacks Joe Montana and Joe Namath, and Wayne Gretzky of NHL fame, are current endorsers.
In an e-mail to ESPN, an Adidas spokesperson called Skechers’ complaint “frivolous and nonsensical” and said “it should be summarily dismissed.”