Major Sneaker Companies Are Being Investigated by the FBI for Creating a ‘Sneaker Black Market’

In a recent expose, the Washington Post detailed the various extralegal ways major sneaker companies exploit the NCAA recruiting process, and the myriad damaging effects that can have on the lives of young players.

Operating within what the story calls the “basketball black market,” these sneaker companies broker deals, sponsor teams, and ultimately hope to curry favor with the top players across the “grass-roots basketball” network — a loosely defined term that applies to a complex web of AAU organizations, high school teams, and amateur camps.

The strategy, according to The Post, is “to cast a wide net and hopefully attract the next generational talent who will develop a lifelong affinity for the brand — and sell truckloads of shoes.”

Cultivating that affinity, however, is where things get not-so-legal, and potentially harmful. A Justice Department investigation has implicated people from Adidas, Nike and Under Armour and found evidence of significant payoffs to top players’ families.

But while those who arrange the deals don’t face especially harsh reprimands – just two Adidas officials one wannabe NBA agent were arrested (they go on trial this week) and a few assistant coaches were fired – if kids get caught accepting gifts / money, they risk suspension and degradation.

“The basketball black market creates difficult decisions for players who want to try to play in college, but whose families can’t afford to wait for finder’s fees in years to come.”

And that’s the real problem. Kids and families are exposed to the most risk and make the least money, while the two constituents that make the biggest profit from the system — the sneaker companies and the NCAA — are relatively unscathed.

As one agent quoted in the story summed it up, “it’s [just] poor kids and their families that get screwed.”

You can read more about it at The Washington Post.

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