For Franklin, a soft-spoken coach from Los Angeles, the run was a triumph. His Nike-sponsored team was one of the best in the country in what is now known as grass-roots basketball.
Three years later, Franklin, 51, is in a different spotlight, with federal prosecutors accusing Avenatti of extortion for threatening Nike with the release of information that Avenatti had pledged would damage the company’s stock-market value to the tune of a few billion dollars. Specifically, Avenatti had told Nike lawyers this month that a coach in Nike’s grass-roots basketball league had approached him with information that company employees had paid the families of three players, prosecutors said. Avenatti, prosecutors said, demanded that Nike pay millions to make the whole thing go away.
Paying players and their families would violate N.C.A.A. rules, rendering the players ineligible for college play. Also, if the money was paid in exchange for players to commit to colleges Nike sponsors, it would resemble the behavior that recently led to federal fraud convictions for two former Adidas employees.
Two people familiar with the investigation confirmed that the unidentified coach in the complaint is Franklin. Nike had recently declined to renew its sponsorship deal with Cal Supreme, which was worth more than $70,000 annually. Franklin could not be reached for comment.
Grass-roots basketball is often erroneously called A.A.U. basketball, even in prosecutors’ court filings. That is a misnomer because the elite leagues are not sponsored by the Amateur Athletic Union. Rather, they are supported by sneaker companies that spend hundreds of thousands of dollars every year to organize tournaments from April through July. The teenage players who participate are outfitted, from head to toe, in apparel made by and bearing the logo of the league’s sponsor.
Sneaker companies like Nike and Adidas also pay thousands of dollars each year to sponsor the teams themselves as a sort of long-term investment strategy: They hope to build brand loyalty among young players who could eventually become stars. Get players into your gear early, the thinking goes, and you may be more likely to land them as spokesmen when they turn pro and have even more influence over the world’s fans — and their wallets.
“Sneaker companies want to make money,” said Dr. Todd Boyd, a professor at the University of Southern California who was the executive producer of a 2016 documentary, “At All Costs: Life Inside A.A.U. Basketball.” “That’s their objective. And if you have a kid who’s good enough to go on to the N.B.A., and he chooses to continue wearing these shoes, you’ve made a long-term investment that could pay off for years.”