Under Armour's Ties With Maryland, Courtship of Top Recruit Stephenson Raise Questions
Sunday, March 1, 2009
When Lance Stephenson and his parents came to the area in late January for an official visit to the University of Maryland, the high school basketball standout from Brooklyn, N.Y., was courted by two suitors. His itinerary included not just attending a Maryland home game and meeting Terrapins coaches, but also a visit to the Under Armour athletic apparel company in Baltimore.
Maryland wanted the heralded guard to be the centerpiece of a recruiting class that would help make the Terrapins a contender in the ACC in the 2009-10 season. At the same time, industry sources said, Under Armour wanted to build a relationship with Stephenson so he would become part of its fledgling basketball shoe division if he reaches the NBA.
The most elite high school basketball players are often recruited by shoe companies, but rarely is a company also a major benefactor of a university pursuing the same player. Under Armour founder and chief executive Kevin Plank is a former Maryland football player and member of the school's Board of Trustees. That means the NCAA considers him a "representative of the institution's athletics interests," commonly known as a booster. Under Armour Inc. is acknowledged by Maryland as a member of its "Legends" benefactor group, meaning it has donated more than $1 million to the school.
NCAA recruiting bylaws can make such an arrangement dicey. A Maryland official said the school, after being asked by a Washington Post reporter about Under Armour's relationship with Stephenson, is investigating the case to determine whether any NCAA rules have been violated. The official said the school plans to speak to Under Armour personnel tomorrow.
Plank declined numerous requests to be interviewed for this story. The company referred all questions to senior vice president Stephen Battista, who via e-mail said of the general arrangement between the company and the school: "We meet with the University of Maryland administration frequently and compliance is part of those meetings. . . . Because compliance is a priority, we are not concerned."
Leaping into the cutthroat fray of the basketball shoe business will require any newcomer to persuade high-profile players to become living billboards for its products. But extra caution is warranted when the company is wooing the same player as a school to which it donates.
"You are treading in some dangerous water there," said Tim Parker, Virginia Tech's senior assistant director of athletics for compliance. "I mean, you have hit upon some issues that would have to be discussed in advance with the staff and with those executives that are classified as boosters, because you do run some risks there of jeopardizing that individual's ability to play at that school down the road."
The Nike Model
Plank founded Under Armour in 1996, creating football undershirts that would not retain moisture. As the product took off, the company then started producing other apparel, also moving into cleated shoes for football and baseball. It decided to produce basketball shoes even though it faced direct competition from Nike, one of the strongest brands in the world.
Under Armour followed the Nike game plan by signing an endorsement contract with a top player. In this case, it was Brandon Jennings, a California summer league star who earned international headlines when he chose to play professionally in Europe rather than in college. Under Armour also reached out to Sonny Vaccaro, the godfather of shoe company-sponsored camps and events who helped Nike build its empire, making him an unpaid consultant.
The fledgling company is preparing to enter the grass-roots level of a multibillion-dollar industry that took shape in 1978, when a little-known company in Oregon began paying college basketball coaches to outfit their players with its shoes. Nike quickly gained a stranglehold on the industry, and the 1984 signing of Michael Jordan to a shoe contract launched Phil Knight's company into a different stratosphere. The aim was to build the brand and secure the next crop of megastars. Nike outfitted and bankrolled high school and summer league teams, attracted top talent to its annual summer camp and signed Duke Coach Mike Krzyzewski to a contract that included a $1 million signing bonus in 1993. At the same time, Adidas's emergence as Nike's first legitimate adversary intensified the competition exponentially.
Shoe companies began targeting players in middle school, building relationships with those close to the preteens. High-profile summer camps became auditions for NBA careers and multimillion-dollar shoe contracts. In the summer of 1996, Tracy McGrady was a skinny, unknown player who finagled his way into an Adidas camp. The next year, he had a six-year, $12-million contract with Adidas. A few years later, the chase for a teenager wearing the King James T-shirt brought unprecedented theater, with Nike flying LeBron James and his mother to its headquarters in Beaverton, Ore., before his senior year of high school began. Nike ultimately signed James to a $90 million contract.
Stories of shoe company officials steering players to college coaches under contract with their respective sneaker companies became lore, and the annual tug-of-war over top high school players became ruthless. Earlier this decade, Amare Stoudemire switched from Nike to Adidas and back to Nike after a Nike representative allegedly gave his mother gifts and cash. A few years later, a Reebok official accused Adidas officials of acting as if they "owned" players. And in 2005, Nike dismissed Kevin Love from its sponsored team because Love had committed the cardinal sin: He played in Reebok's camp.