How Does Michael Avenatti's Conviction Impact the NCAA and NBA?
Celebrity attorney Michael Avenatti was convicted by a Manhattan federal jury on Friday of attempting to extort up to $25 million from Nike. Avenatti, 48, was also convicted of honest services wire fraud. The fraud charge stems from Avenatti devising a scheme to deprive his client of the intangible right to Avenatti’s honest services.
Avenatti faces a maximum sentence of 42 years in prison, though as a first-time offender he’ll receive a far shorter sentence. Still, Avenatti faces the prospect of spending the next chapter of his life behind bars. He’s also a defendant in two forthcoming trials relating to his alleged extortion of adult film actress Stormy Daniels, whom Avenatti represented in her unsuccessful lawsuit against President Donald Trump, and to accusations of defrauding other clients.
Avenatti is best known for his political commentary. During the first two years of Trump’s presidency, Avenatti was frequently interviewed by journalists and broadcasters as a leading authority. He also amassed considerable influence on Twitter, with frequent tweets to his more than 761,000 followers. Avenatti routinely criticized Trump and members of his administration. He gained further notoriety when he represented Julie Swetnick, who accused U.S. Supreme Court Justice Brett Kavanaugh, then a U.S. Court of Appeals judge, of sexual misconduct while Kavanaugh was a high school student in the 1980s. Avenatti, who graduated first in his class from George Washington University Law School 20 years ago, even contemplated his own White House run in 2020.
Avenatti became connected to the sports world last March, when federal prosecutors claimed that he crossed the line from zealous advocate to criminal extorter.
How Avenatti’s representation against Nike became a criminal case
In early March 2019, Avenatti was retained by Gary Franklin, an AAU coach of the California Supreme travel team. Nike had let Franklin go, a decision Franklin insists stemmed from his refusal to illegally bribe family members and representatives of top recruits. As told by Avenatti, Franklin was concerned about how these payments jeopardized players’ NCAA eligibility and how they exposed him to the risk of criminal prosecution. Franklin had seen the Justice Department bring wire fraud cases against Adidas director of global marketing James Gatto, Adidas consultant Merl Code, client recruiter Christian Dawkins and assistant coaches employed by Adidas-sponsored colleges. He didn’t want to face the legitimately frightening prospect of federal charges—particularly since federal prosecutors obtain convictions between 85% and 95% of the time.
Franklin demanded that Nike engage in anti-corruption reforms. Through a sports consultant friend, Jeffrey Auerbach, Franklin hired Avenatti to advocate for his demands. Pursuant to that arrangement, Avenatti contacted Nike and soon met with company attorneys. Avenatti warned them that Franklin was in possession of texts, emails, bank records, invoices and other damning documents that would prove Nike had broken the law.
Avenatti also explained to Nike how the company could resolve the matter. It could do so by making payments. To that end, Avenatti demanded that Nike pay Franklin $1.5 million. Whether this request was reasonable or excessive is a matter of interpretation. However, the demand did not indicate wrongful conduct on the part of Avenatti. As an attorney negotiating on his client’s behalf with an adverse party, Avenatti could make demands so long as they were within boundaries expressed by the client. Along those lines, the Model Rules of Professional Conduct express, “as advocate, a lawyer zealously asserts the client's position under the rules of the adversary system.” Avenatti has long been considered a zealous advocate for his clients and, until recently, had a distinguished career as a litigator.
The problem for Avenatti is when he made demands of Nike on behalf of himself. As convincingly portrayed by federal prosecutors, Avenatti lost the defense of lawyering when he attempted to personally gain from his advocacy of Franklin. Avenatti demanded that Nike pay him and co-counsel, Mark Geragos (also a celebrity attorney and counsel to Colin Kaepernick, among other prominent sports figures), a combined fee of $15 million to $25 million to investigate the company for corruption. Alternatively, Nike could pay them $22.5 million to take no action.
This demand was extremely unusual. Attorneys are certainly permitted to make substantial demands from adverse parties for their clients. However, to insist that the attorneys themselves receive more than 10 times the amount for the client was, to put it charitably, unconventional.
Avenatti further warned Nike that if it didn’t meet his demands, he would hold a press conference during the middle of March Madness and implicate the company in recruiting bribes. The press conference would be held at a time where it would inflict the maximum harm to Nike’s image and stock price. Audio recordings of Avenatti’s threats include him saying he would take $10 billion off of Nike’s market cap.
Avenatti insisted these tactics reflected aggressive lawyering. Prosecutors saw them instead as part of a criminal shakedown of a publicly traded company.
Avenatti accuses NBA players
As detailed by Sports Illustrated, Avenatti used pretrial filings to level serious accusations against Nike and basketball players.
To illustrate, Avenatti asserted that Nike employees sought to pay New Orleans Pelicans forward Zion Williamson and Boston Celtics guard Romeo Langford while they were among the most highly regarded high school players in the country. Williamson would attend Duke, which is sponsored by Nike, while Langford matriculated to Indiana, an Adidas school. It has not been established that payments were made to either player or to their family members and representatives. Duke, moreover, conducted an internal investigation and concluded that the school fully complied with NCAA compliance rules while recruiting Williamson.
Avenatti defeated in the trial
The trial proved problematic for Avenatti, who declined to testify in his own defense.
For starters, Franklin took the stand and insisted that he never approved the types of demands Avenatti made of Nike. Franklin claims that he and Avenatti focused their discussions on Avenatti making a $1 million demand, along with a request for whistleblower protection and the firing of Nike executives who allegedly mistreated Franklin. Franklin maintained that he and Avenatti never discussed Avenatti pressing Nike to pay Avenatti and Geragos $25 million. Franklin also testified he was stunned that Avenatti threatened to hold March Madness press conference designed to inflict harm to Nike’s brand and to disclose materials that would implicate players.
Auerbach also testified in a way that proved damaging to Avenatti. Auerbach stressed that he never authorized Avenatti to threaten Nike in the manner in which Avenatti pursued. Auerbach further asserted that he hoped Avenatti would restore Franklin’s relationship with Nike—not use his representation of Franklin to demand tens of millions of dollars, the vast majority of which wouldn’t have gone to the client.
The testimonies of Franklin and Auerbach helped the prosecution corroborate its core assertation that Avenatti acted not as an attorney but rather as an extorter who sought to personally benefit from his client advocacy.
How Avenatti can appeal the conviction
Avenatti can appeal the conviction to the U.S. Court of Appeals for the Second Circuit and he almost certainly will. As he and his attorneys have stressed in pretrial filings, attorneys are permitted to aggressively represent clients. That point will be emphasized in an appeal.
A successful appeal will require Avenatti to identify alleged errors made by the presiding judge, U.S. District Judge Paul Gardephe. Such errors must have been so significant that they could have impacted the outcome of the trial.
Typical claims in an appeal include decisions by the presiding judge to admit or deny certain evidence. Judge-approved jury instructions are also often the source of an appeal.
To that end, Judge Gardephe ruled against Avenatti’s wishes that allegations of Avenatti’s “prior incidences of lies and deceit” could not be raised by prosecutors if Avenatti took the witness stand. On appeal, Avenatti might argue that the judge erred in regarding those incidences as more relevant to the case than prejudicial to Avenatti. Avenatti would further contend that the ruling was so impactful that it led him to not testify in his own defense. Likewise, Avenatti might object to Judge Gardephe ruling that prosecutors could introduce evidence of Avenatti’s Internet searches related to Nike stock to help prove extortion.
The impact of Avenatti’s conviction on the NCAA and NBA
The conviction of Avenatti has legal and political implications. Attorneys will study it as raising interesting questions about the permissible limits of “zealous” advocacy. Political commentators will see the conviction as a stunning downfall of a man who had become one of the foremost critics of the President and a potential presidential candidate in his own right.
The case also has ramifications for the NCAA and NBA. While the trial was about Avenatti’s wrongdoing, Nike and its sponsored schools may have suffered collateral damage.
This is particularly apparent with respect to testimony by Franklin. While under oath and under penalty of perjury, Franklin acknowledged that he helped to arrange for bribes to a number of amateur players or their family members. Phoenix Suns center Deandre Ayton (who played at Arizona), Denver Nuggets center Bol Bol (Oregon) and G League center Brandon McCoy (UNLV) were all implicated by Franklin. He also said he took these actions on behalf of Nike.
It stands to reason that the NCAA will look into the alma maters of players mentioned during the Avenatti trial. The NCAA has gained from the Adidas trials to cultivate evidence in investigating schools—including, as Pat Forde detailed on Thursday, South Carolina—for compliance with amateurism rules. Even if college head coaches were unaware of illicit payments to recruits, the NCAA could hold them responsible for failing to monitor assistant coaches and others connected to the program.
It’s also possible that federal prosecutors, who have not pursued charges against Nike officials like they did against Adidas officials, could reconsider that calculus. To the extent that happens, college coaches at implicated Nike-sponsored schools would have reason to worry.
The NBA is less likely to take significant interest in developments during the Avenatti trial. While NBA players were accused of profiting from illicit payments, those payments would have occurred while the players were high school students. The NBA doesn’t have a stake in the effective enforcement or diligent following of NCAA amateurism rules.
If anything, the NBA might privately contrast corruption in college basketball recruiting with the NBA’s efforts to transform the G League into a potential rival to the NCAA for the recruitment of elite talent. Instead of taking bribes from a “middleman” as part of a decision to attend a college for a semester and a half, a player could instead join the G League. He could then be paid over the table and in transparent, accountable and legal ways. The player could also earn from his name, image and likeness.
Lastly, there is one NBA player who might take particular notice in the Avenatti trial. Zion Williamson remains embroiled in a multi-court litigation with former marketing representative Gina Ford. She argues that Williamson unlawfully fired her and caused her more than $100 million in damages. Evidence and testimony produced in the Avenatti trial could help to shed light on claims in Williamson-Ford litigation.
Michael McCann is SI’s Legal Analyst. He is also an attorney and the Director of the Sports and Entertainment Law Institute at the University of New Hampshire Franklin Pierce School of Law.
