Adidas’s basketball scandal hasn’t hurt its top line, so far

Adidas's mission to expand its basketball footprint in North America hasn't made a major difference so far. That may now be a comfort to the German athletic-goods company as one of its employees was arrested in a college basketball bribery investigation.

Adidas expects to generate $401 million from basketball products worldwide this year, the company said in response to questions from Bloomberg, providing details not previously disclosed in its financial reports.

That's less than two percent of its global sales, and the scandal is unlikely to wipe out that revenue entirely.

Adidas generated $22.8 billion in revenue last year and aims to lift the measure to about $30.7 billion by 2020.

Federal prosecutors in Manhattan said the charges followed a three-year investigation into criminal influence in NCAA basketball. The three complaints unsealed on Tuesday identify the coaches but not their schools, which weren't accused of wrongdoing.

The charges include bribery, conspiracy and fraud. The case is built in part on allegations that an executive at a global apparel company bribed students - and their families - to attend universities where the company sponsored athletic programs.

Prosecutors in the U.S. attorney's public corruption unit also say that business managers and financial advisers illegally paid coaches to steer student athletes to them to manage their fortunes once they turned professional.

'The madness of college basketball went well beyond the madness of March,” Joon Kim, the acting U.S. attorney in Manhattan, said at a news conference.

The attorney for the Adidas employee, James Gatto, declined comment.

Top-tier college basketball programs were thrown into turmoil Tuesday as federal prosecutors unveiled criminal charges against 10 people, including coaches, managers, financial advisers and two representatives of Adidas, accusing them of making illicit payments to cash in on the vast riches generated at the sport's highest levels.

Adidas rival Nike dominates basketball, generating $1.38 billion in revenue last year in that category. It sold a further $2.75 billion worth of Jordan brand gear, much of which is basketball products.

Most sports categories Adidas steers from its headquarters in Herzogenaurach, Germany. Its global basketball business, however, is run out of Portland, Ore., headed by Kris Aman, after Chris Grancio left for personal reasons in September 2016.

Through 2013, Aman had worked for more than 16 years at Nike, heading its basketball footwear business, among other posts.

Under Grancio, Adidas set a goal to double the roster of NBA players it sponsors to 140 within five years. It currently has just under 100 players.

Adidas will spend about 2.5 billion euros this year on marketing. The proportion going to basketball is a 'single-digit percent share” of this, the company said.