In March 2019, a coach at an amateur basketball program Nike was no longer planning to sponsor, contacted Avenatti and said he had evidence the company illicitly paid the families of top high school basketball players.
Avenatti threatened to make the allegations public, hurting Nike’s financial value and reputation, prosecutors claim.
“I’ll go take $10 billion off your client’s market cap,” Avenatti is quoted as threatening in a recorded telephone conversation. “I’m not (expletive) around with this thing anymore.”
In exchange for not going public Nike would have to pay the coach $1.5 million for any claims related to no longer sponsoring his team, immediately pay $12 million and guarantee $15 to $25 million in total payments for the internal investigation.
“They are going to incur cut after cut after cut, and that’s what’s going to happen as soon as this thing becomes public,” Avenatti allegedly threatened.
“Nike will not respond to the allegations of an individual facing federal charges of fraud and extortion,” the company said in a statement. “Nike will continue its cooperation with the government’s investigation into grassroots basketball and the related extortion case.”
Avenatti vehemently denies the charges against him.
“It is absolutely central to why Mr. Avenatti had the power to threaten Nike,” US District Judge Paul Gardephe said in a pre-trial hearing. “I can’t pretend there is an immaculate conception here that Mr. Avenatti become so prominent magically.”
In what could be a preview of the defense case, lawyers displayed text messages they say show Franklin, the client, actually did want what amounted to an internal investigation of Nike and Avenatti had reason to believe the company’s current law firm would not conduct it fairly.
But prosecutors say the evidence they will present shows Avenatti was in deep debt and was trying to shake down the athletic apparel giant for his own gain.
Jury selection begins Monday.
Judge Gardephe expects that at least some of the jurors will know about Avenatti and his representation of Daniels but that will not automatically disqualify them so long as they can put their opinions aside and be impartial. The trial is expected to last more than two weeks.