Photo: Spencer Platt (Getty)

Michael Avenatti wanted money, it appears. Maybe he thought he needed it. That much is clear from the two sets of federal charging documents filed against him Monday, one in New York and another in California. In the California case, a 197-page document outlines how authorities believe Avenatti misrepresented tax returns to receive a loan from a Mississippi bank and also kept for himself a $1.6 million settlement that was supposed to go to a client. In the latter case, according to the complaint, Avenatti took the money, then made a fake document telling his client that the money was coming in March, and failed to pay up when March rolled around.

Advertisement

This wasn’t Avenatti’s only financial trouble. Avenatti’s law firm twice filed for bankruptcy in the last three years. “Who cares?” Avenatti told the Los Angeles Times after the most recent bankruptcy filing earlier this month.“Old firm that we have not operated under for a very long time.”

So perhaps it’s no coincidence that, according to the case filed in New York, Avenatti tried to extort Nike for millions of dollars.

Advertisement

According to federal prosecutors, Avenatti told the billion-dollar company that he represented a former AAU coach who had proof of Nike paying players and he would keep quiet about it, for a price. The charging documents read like Avenatti had watched too many mob movies. They say he wanted $1.5 million for his client, and $3 million for himself. Then he wanted $5 million, then $7 million, then $9 million, then between $15 million and $25 million. After a negotiation that was secretly recorded, Avenatti allegedly lowered his price to $22.5 million to get rid of it in “one fell swoop.”

“I just wanna share with you what’s gonna happen if we don’t reach a resolution,” Avenatti said, according to the unsealed complaint. “As soon as this becomes public, I am going to receive calls from all over the country and all kinds of people—this is always what happens—and they are going to say I’ve got an email or a text message or—now, 90 percent of that is going to be bullshit because it’s always bullshit 90 percent of the time, always, whether it’s R. Kelly or Trump, the list goes on and on—but 10 percent of it is actually going to be true, and then what’s going to happen is that this is going to snowball... and every time we got more information, that’s going to be the Washington Post, the New York Times, ESPN, a press conference, and the company will die—not die, but they are going to incur cut after cut after cut after cut, and that’s what’s going to happen as soon as this thing becomes public.”

Advertisement

In another recording, as described in the complaint, Avenatti tells Nike he is going to “take ten billion dollars off your client’s market cap.”

Despite Monday’s charges, Avenatti is tweeting through it. He’s accused two players and their associates of getting cash payments from Nike. He’s also accused a few current and former Nike employees of vague crimes relating to paying basketball players. He also says that Nike will have to answer to the U.S. Securities and Exchange Commission. This is, presumably, some of the information he was allegedly trying to extort Nike with. This is, in theory, the good shit.

Advertisement

And no one really cares. His tweets about the subject have so-so engagement. A few sites have reported on his comments, but there’s no media storm over it. Nike’s stock, which dipped after Avenatti previewed the Nike allegations on Twitter before his arrest, is humming along as normal. (It dropped six points last Friday, the day after it posted earnings.)

As for why, it helps to recall that a version of this has happened very recently. In 2017, the federal government charged several college basketball coaches with fraud as part of a scheme in which Adidas would secretly pay players, which enabled the players to keep their college eligibility while being paid. An Adidas executive, James Gatto, was also charged, and defendants, including Gatto and ex-Adidas consultant Merl Code, were found guilty.

Advertisement

And Adidas stock is basically at the same level it was before the charges were filed. Matt Powell, a senior industry advisor at the NPD Group who studies these kinds of things, told Deadspin he has seen no ill effects to Adidas: “I have not seen any material impact to Adidas’ business because of the convictions. I have not had any negative feedback from my Twitter followers either.”

Advertisement

The market doesn’t seem to care. The public doesn’t seem to care. In fact, a lot of people seem to like it when sneaker companies make payments to high school kids. The reaction to the Adidas case—some convictions, some minor NCAA reforms, a shrug from fans—shows that people don’t really care if college athletes are paid.

There was a time when a teenage athlete taking money to play sports was shocking; it is not in 2019. Even if Avenatti had held his press conference before Nike’s earnings call, it wouldn’t have torpedoed the company’s market capitalization. Adidas had an executive convicted of a federal crime and the market and the public barely noticed.

Advertisement

In theory, this could lead to broader discussions in politics and law enforcement of the NCAA cartel and the expected result of black markets when anything (be it drugs or “earning power from basketball”) is restricted. The NCAA helped create this situation, where players or players’ families and handlers are paid in secret by shoe companies in order to steer them to universities. Sneaker companies exploit it. Avenatti allegedly tried to weasel some money out of the system for himself, too.

Avenatti might have tried to style himself as a hero, but all he did was allegedly use the same corrupt system for himself too.