KU now refuses to share info with public on $1.5M in Adidas payments; last week it said lack of personnel was reason for delay

photo by: Nick Krug

A University of Kansas-branded Adidas basketball is pictured in March 2018.

KU accepted $1.5 million in extra payments from the shoe company at the center of a college basketball corruption case, but now KU is refusing to release documents detailing the conditions attached to the money.

An attorney for Kansas Athletics Inc. on Monday evening denied the Journal-World’s open records request seeking documents related to $1.5 million in extra royalty payments the department received from Adidas during the last fiscal year.

Kansas Athletics’ chief financial officer briefly mentioned the extra payments while giving a verbal report to the Kansas Athletics Inc. board of directors during a meeting last month. Since the meeting, though, KU officials consistently have refused to answer the Journal-World’s questions about the payments.

Those questions include whether, by accepting the money, KU has obligated itself to remain in partnership with Adidas or face significant penalties if the university seeks to end the partnership. Three former Adidas employees or consultants have either been convicted or pleaded guilty to fraud charges related to a pay-for-play basketball scheme. Testimony at a recent federal trial for two of the former Adidas officials raised the specter of KU being punished by the NCAA for recruiting violations related to the scheme.

On two occasions earlier this month, Kansas Athletics told the Journal-World that it could not produce the documents because of “personnel limitations” in the athletics department. On Monday, an attorney for Kansas Athletics said it would not release the documents because Kansas Athletics believes the law does not require it. The department cited a provision of the Kansas Open Records Act that gives public entities the option to withhold the release of notes, preliminary drafts, research data in the process of analysis, unfunded grant proposals, memoranda, recommendations or “other records in which opinions are expressed or policies or actions are proposed.”

The response has left unclear under what authority Kansas Athletics accepted the $1.5 million in extra royalty payments. The Journal-World on Monday evening asked Megan Walawender, interim corporate counsel for Kansas Athletics, for clarification on whether KU was using a memo or a draft document to enter into a million dollar-plus arrangement with Adidas. As of Tuesday morning, the Journal-World had not received a response.

It also wasn’t immediately clear how the cited provision in the Kansas Open Records Act applied to the documents sought by the Journal-World. The newspaper sought documents showing any agreement that called for Kansas Athletics to receive royalty payments over and above the amount called for in the signed 2012 agreement KU has with Adidas. The section of the open records act cited by KU gives public entities the ability to withhold records related to proposed actions. However, the university in this instance has not disputed that KU Athletics already has received the extra payments from Adidas.

Also on Monday evening, the Journal-World submitted a question to both the athletics department and Chancellor Douglas Girod’s office asking whether the university felt the public had a right to know the details of an arrangement that allowed a public entity to accept more than $1 million from a private company. As of Tuesday morning, the Journal-World had not received a response from either office.

In late September 2017, KU and Adidas announced an extension of an Adidas sponsorship agreement with Kansas Athletics. The extension was valued at about $191 million over 10-plus years, making it the largest dollar value sponsorship agreement Adidas has with any university.

But just days after the announcement, a federal criminal complaint was unsealed alleging that Adidas executive Jim Gatto was part of a pay-for-play college basketball scheme. Shortly thereafter, KU clarified that it had not yet signed the extension with Adidas, but it was initially reluctant to acknowledge the delay had anything to do with Gatto’s indictment. In November 2017, athletics department spokesman Jim Marchiony said the delay was just part of the “normal course of putting a contract together.”

Related stories: Adidas contract extension

Oct. 24 — KU says it’s evaluating options on Adidas contract

Oct. 24 — KU cites lack of personnel for delay in providing records related to unexplained $1.5M in Adidas payments

Oct. 12 — As allegations mount, KU mum about Adidas ties and extra $1.5M it has received from the company

Nov. 28, 2017 — Multimillion-dollar KU-Adidas deal remains unsigned as investigation into Adidas executive continues

By April, though, the federal case had grown to include an indictment that alleged Gatto and others had paid the family or guardians of two recruits to attend KU. Gatto and former Adidas consultant Merl Code were convicted on fraud charges related to that indictment earlier this month. A third Adidas representative, T.J. Gassnola, has pleaded guilty to a fraud charge related to a pay-for-play scheme involving KU recruits.

No Kansas coaches or officials have been charged in the case. The recent federal trial, however, included the partial transcript of a wiretapped phone conversation involving KU assistant basketball coach Kurtis Townsend making comments that have raised concerns that Townsend was willing to break the fundamental NCAA rule prohibiting paying a recruit or his family. KU officials have yet to make any public statements that directly address what Townsend meant by those comments.

KU officials now say they are not certain what the future holds for the Adidas deal. In a joint statement following last week’s federal trial, Girod and KU Athletic Director Jeff Long said the university continues to evaluate its options as it relates to the Adidas contract. No timetable for a decision has been set.

“A strong apparel partnership is important and beneficial to all our student-athletes and our institution, and we will take great care in making the right decision for KU,” the duo said in the statement.

KU’s current contract with Adidas expires in July.

The money involved in a new deal with Adidas is significant for Kansas Athletics, as the department’s finances have struggled to break even in recent years. At the September board meeting, the board received a report that it had to dip into operational reserve funds for $2.7 million to cover expenses that came in above department revenues.

A previous review by the Journal-World found that between fiscal years 2006 and 2017, the revenues of the nonprofit Kansas Athletics Inc. increased by 68 percent but its expenses increased by 93 percent.

Coverage: College basketball corruption trial

Oct. 24 — How deeply will NCAA dig into KU’s recruiting? That question and others still loom after trial

Oct. 24 — In wake of basketball corruption trial’s verdict, Self says his staff has done nothing wrong

Oct. 24 — 3 convicted of fraud in college basketball corruption trial

Oct. 23 — Jury deliberates 2nd day with no verdict in college basketball corruption trial

Oct. 18 — Defense attorney argues Bill Self knew about payments to families of KU players

Oct. 16 — ‘If that’s what it takes’: KU assistant coach taped by feds discussing recruit’s demand for cash

Oct. 15 — ‘We good?’ ‘Always’: Texts between Self, fixer presented in college basketball corruption trial

Oct. 11 — Latest testimony in college basketball corruption trial goes into further details on KU’s involvement

Oct. 10 — Self declines to comment on testimony of former Adidas consultant; questions surface about KU compliance

Oct. 9 — Basketball player’s father: Louisville assistant gave cash

Oct. 4 — Father testifies on pay for play at college hoops programs

Oct. 3 — Witness details secret payments in college hoops recruiting

Oct. 2 — As college basketball corruption trial opens, attorney admits client paid $20K to get De Sousa to come to KU

More coverage: KU and the college basketball scandal

Oct. 24, 2018 — KU says it’s evaluating options on Adidas contract, doesn’t answer whether it will conduct independent investigation of recruiting practices

Oct. 24, 2018 — KU cites lack of personnel for delay in providing records related to unexplained $1.5M in Adidas payments

Oct. 19, 2018 — Devoted KU basketball fans stand by their team; psychologists not at all surprised

Oct. 18, 2018 — Chancellor won’t say whether he still has ‘complete confidence’ that KU follows recruiting rules

Oct. 17, 2018 — As college basketball corruption trial comes to a close, KU could be facing several NCAA code violations

Oct. 12, 2018 — As allegations mount, KU mum about Adidas ties and extra $1.5M it has received from the company

Oct. 3, 2018 — KU’s De Sousa could be ruled ineligible, NCAA rules experts say; chances of vacating Final Four appearance less clear

Oct. 1, 2018 — Girod, other KU leaders listed as potential witnesses in college basketball corruption trial

July 24, 2018 — KU releases federal subpoenas in college basketball investigation

July 11, 2018 — KU coach Bill Self, new AD Jeff Long discussed ongoing FBI investigation during interview process

July 10, 2018 — KU acknowledges having received federal subpoena in ongoing FBI investigation into college basketball

July 6, 2018 — Report: Feds seeking more information regarding KU forward Silvio De Sousa

April 27, 2018 — Reports: AAU director linked to NCAA bribery case, KU families pleads guilty

April 23, 2018 — KU didn’t produce written report of recent examination of athletic department; chancellor saw no need for external report

April 13, 2018 — Former prosecutor: KU not in clear yet, but one past case provides hope

April 13, 2018 — Chancellor sees no need for independent investigation of KU Athletics in wake of indictment

April 10, 2018 — Employee of apparel company illegally paid 2 KU basketball players’ guardians, federal indictment alleges

Feb. 23, 2018 — Kansas linked to college basketball scandal in Yahoo Sports report

Nov. 28, 2017 — Multimillion-dollar KU-Adidas deal remains unsigned as investigation into Adidas executive continues

Oct. 20, 2017 — KU provides more details of NCAA-mandated basketball review, enlists law firm to help

Oct. 17, 2017 — Analysis: Understanding the legal case building against the college basketball world

Oct. 16, 2017 — Zenger: KU will comply with NCAA requirement of all schools to review basketball program

Sept. 26, 2017 — NCAA basketball coaches, Adidas executive among 10 charged in bribe scheme


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