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ASU to continue apparel deal with Adidas

The University has a $40 million deal with Adidas for team sponsorship and athletic products, despite company's connection to FBI investigation

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ASU president Michael Crow poses for a portrait in his office in the Fulton Center on the Tempe campus on Tuesday, Oct. 24, 2017. 

ASU President Michael Crow said Tuesday that the University isn't concerned by Adidas's connection to the FBI's investigation into corruption in collegiate basketball. The University will continue to use the company as an apparel provider, he said.

The Attorney General’s Office for the Southern District of New York announced Sept. 26 that an FBI investigation resulted in the arrests of 10 people, including four collegiate basketball coaches and one high-level Adidas marketing executive. 

But ASU wasn't one of the schools connected and Crow said the University hasn’t been contacted by the FBI since the investigation announcement. 

“We obviously look at anything that’s going on, but we don’t think there’s any issues going on with our basketball program,” Crow said. “... We think that those issues are not issues at ASU.”

The University is estimated to receive around $40 million in revenue and apparel over the eight-year life of the deal, according to a copy of the University's contract with Adidas obtained by The State Press

Crow said Tuesday that “accountability” for the alleged misconduct should be focused on the individual Adidas employee who was arrested, as opposed to the company as a whole. 

“We think that the Adidas activity is limited to individuals, as opposed to the corporation,” he said. “So those are two different things.”

Maria Culp, the senior manager of corporate communication for Adidas, said she couldn’t comment on the company’s relationship with ASU. 

But she said in a statement provided to The State Press that the company’s head of global sports marketing Jim Gatto — who was arrested by the FBI on suspicion of wire fraud, bribery, travel act and conspiracy — has been put on administrative leave. 

“We’re aware of the allegations and intend to cooperate with the relevant authorities,” according to the statement. “The employee identified by the federal investigators has been put on administrative leave and the company has engaged outside counsel to conduct a thorough investigation. In all aspects of our business, Adidas is committed to compliance and ethical business practices.”

Gatto conspired to pay high school athletes to attend schools that Adidas sponsored, according to the attorney’s office announcement. 

Jim Margolin, the chief public information officer for the Attorney General’s Office for the Southern District of New York, said he wasn’t able to to confirm whether the FBI is looking into any other schools’ basketball programs due to the pending investigation.

So far, the investigation includes two Pac-12 schools, USC and UA, as well as Auburn and Oklahoma State. 

UA President Robert Robbins announced on Oct. 3 that the university was launching a full investigation into the FBI arrest of one of its basketball coaches, Emanuel Richardson. The Arizona Board of Regents— which oversees both ASU and UA — was also briefed on the situation. 

“The conduct alleged against Emanuel Richardson is absolutely unacceptable,” ABOR chair Bill Ridenour said in a statement. “To be clear, the Arizona Board of Regents expects our employees and students to act with the utmost legal and ethical behavior.”

The history of Adidas and ASU

ASU announced its sponsorship deal with Adidas in 2014, but the fully finalized deal wasn’t signed by both parties until August 2017. 

The eight year deal will expire in 2023, and includes an average annual payment of $1.575 million in for ASU. The University also receives an average of $2.4 million worth of Adidas products per year, according to the contract. 

The contract also outlines an incentive program: ASU can collect more money if it hits athletic milestones like winning football games or earning “coach of the year” recognition.

ASU football's four wins so far this season would earn the University a $40,000 payout from Adidas if the season ended today, according to the contract. 

Adidas is also scheduled to pay the University at least $350,000 per year in royalties for the ability to sell products with ASU trademarks — like Sparky or the Pitchfork logo — to the public. 

In exchange, Adidas receives exposure for its products and logos, acknowledgment during game announcements and a handful of perks, including tickets to all ASU home games, according to the contract. 

ASU also has deals with six other companies to provide apparel, such as softball bats, to various teams, according to the Office of General Counsel. 

But copies of each contract obtained by The State Press show that the Adidas deal dwarfs all others in terms of payment amount and equipment provided. 

Most of the contracts allow ASU to receive athletic equipment for free or at a discounted rate but don’t come with cash benefits or other perks. 

ASU also has a deal with Reebok, which is owned by Adidas, to provide equipment to the University’s hockey program. 

In June the University also announced a new initiative with Adidas called the Global Sport Alliance to research sports around the world. 

“Our relationship with Adidas is in two dimensions,” Crow said on Tuesday. “One dimension is the apparel deal – all major sports programs … have relationships with one of the apparel manufacturers and we have a relatively standard apparel deal. And then we also have this area of joint activity with them in what we call ‘Global Sport’ and the advancement of global sport, which is more of a series of research projects and other kinds of initiatives.”

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