Sparing No Expense, but at Whose Expense? : Shoe war: Nike’s recent ‘Fab 40’ fiasco, as well as its plunge into sports management, has some wondering if company is going too far to broaden its influence.

Rich Shuebrooks, manager of basketball events for Nike, Inc., concludes his office voice mail message with a bit of philosophizing.

“And give this a thought,” he says. “Success is not doing one

thing 100% better, but doing 100 things 1% better.”

Inside “the berm”--the name Nike employees use for the earthen wall that surrounds the company’s Beaverton, Ore., “World Campus”--Shuebrooks is likely to find little argument.

The world’s largest manufacturer of athletic shoes, Nike has overrun its competition by putting its “swoosh” logo on just about every aspect of sports, from Michael Jordan’s feet to Jim Courier’s head.

So it was that Shuebrooks and his colleagues dreamed up the Nike “Fab 40” all-star tournament, an event that brought some of the nation’s top high school basketball players to Beaverton for the better part of three days last month.

Nike had everything arranged for the players: words of welcome from Phil Knight, the company’s chairman and founder; a tour of the lush “World Campus” grounds; a lakeside barbecue; $100 gift certificates for use at the employee store; seminars on media relations and the nuances of the NCAA rule book; the chance to play in the Bo Jackson Fitness Center before an audience of big-name college coaches.

Nike did everything, in fact, except make sure the players’ participation would not jeopardize their high school eligibility. The “Fab 40” was different from other all-star games because it was held during the school year and participants were given gift certificates.

As a result, all but one of the 37 participants have faced questions regarding their eligibility from their respective state and city high school associations, and at least five are facing suspensions.

The Tennessee Secondary School Athletic Assn. has barred two players for a full season. High school associations in Illinois and Mississippi have made similar decisions, barring players from one to four games. Eligibility decisions are pending for players from Florida and Virginia. The California Interscholastic Federation said eight players violated CIF rules but chose not to punish them.

High school administrators were quick to criticize the event. Ed Sparks, executive director of the Maryland Public Secondary Schools Athletic Assn., went so far as to call Nike’s actions “a form of child abuse.”

Although Nike was out front in accepting blame--”We didn’t do our homework,” said company spokesman Keith Peters--the “Fab 40” has been a public relations nightmare.

Making matters worse for Nike was the revelation that Shuebrooks, the event’s organizer, failed to contact all but one of the players’ high school associations before staging the tournament despite a warning to do so from an NCAA official.

How could that happen?

“They spell it a-r-r-o-g-a-n-c-e,” said Len Elmore, the former NBA player and television commentator who is now a sports agent based in Columbia, Md.

The matter has left some to wonder just how far Nike will go to broaden its influence.

“The first reaction you have is, Is Nike recruiting high school players?” said Mickey Bell, executive vice president of Converse, Inc., one of Nike’s chief competitors.

“Sure, Converse sponsors an all-star game (for high school players). Nike sponsors a camp; Converse sponsors a camp. That’s all very competitive. But Nike opened a new door by bringing those kids to its campus and selling the company to them.”

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The basketball shoe war has, in effect, been raging since 1978, when a one-time Las Vegas gambler named John (Sonny) Vaccaro sold Nike’s Knight on the idea of paying college basketball coaches as “consultants” and providing their teams with free shoes.

Four years later, Vaccaro led Nike into another arena--the sponsorship of an annual summer camp for elite high school players.

Other shoe companies followed, the competition driving up the sums paid to coaches for their “consulting” work and creating a virtual subculture of shoe company-financed summer camps, leagues and tournaments.

By the late 1980s, Vaccaro had become one of the most influential--and scrutinized--figures in college basketball.

He also apparently had become something of a liability as far as Knight was concerned.

According to “Swoosh,” a book chronicling Nike’s history by J.B. Strasser and former Times reporter Laurie Becklund, Knight let Vaccaro go in 1991, a time when Vaccaro was planning a side venture aimed at putting together endorsement packages for coaches and athletes. Knight, according to the book, told Vaccaro that the company was seeking a new image.

Whatever the case, Nike, post-Vaccaro, has been no less aggressive in its marketing schemes than it was during Vaccaro’s heyday. Indeed, Nike has moved into the very area--sports management--that seemed to precipitate Vaccaro’s dismissal.

“As soon as I was out, they (got into sports management) in a way that was 50,000 times bigger than I would have done it,” said Vaccaro, who now works for Adidas.

Nike Sports Management, an entity designed to give Nike greater control over athletes endorsing its products, has put Nike on the doorstep of the sports agent business, if not entirely through the door.

The company is currently overseeing the careers of three rising stars: Rick Mirer, the Seattle Seahawks’ rookie quarterback; Harold Miner, the former USC guard who is beginning his second season with the Miami Heat, and Alonzo Mourning, the Charlotte Hornets’ second-year center.

Nike has not been certified to act as an agent by the NBA or NFL players’ associations, a prerequisite to negotiating player contracts with teams in those leagues. But the issue isn’t holding Nike back.

In Mourning’s case, Nike signed the former Georgetown star to a deal worth a reported $16 million and then hired an agent, David Falk, to negotiate the player’s contract with the Hornets.

“That’s where David’s role ended,” said Terdema Ussery II, president of Nike Sports Management.

The rest of Mourning’s affairs, including financial matters and marketing agreements, are being managed in Beaverton.

“The objective right now is to do marketing and work with the best agents out there,” said Ussery, the former commissioner of the Continental Basketball Assn. “Do we deserve the right to change our focus? Absolutely. But that’s not on the immediate horizon.”

Nike has also significantly expanded its presence in the college coaching ranks in recent months, signing Duke’s Mike Krzyzewski and North Carolina’s Dean Smith.

Nike reportedly gave Krzyzewski, formerly with Adidas, a $1-million signing bonus and a 15-year contract worth $375,000 per year in exchange for the privilege of putting its shoes on the feet of the telegenic Blue Devils.

As for Smith, Nike induced him to end a 23-year association with Converse with a deal that will provide the university with $4.7 million in cash, shoes and athletic apparel over the next four years.

The deal calls for Nike to supply shoes and apparel to 24 of North Carolina’s 26 men’s and women’s teams. Also included in the deal is $200,000 to finance an international exhibition tour by the Nike-clad Tar Heels.

The timing of Nike’s play for Smith, just months after a Final Four in which three teams (Kentucky, Kansas and North Carolina) wore Converse and only one (Michigan) wore Nikes, did not go unnoticed by those who lost out in the deal.

Said Gib Ford, Converse president, in a prepared statement released when negotiations had been concluded: “Converse has enjoyed an outstanding association with Dean Smith. . . . However, it’s readily apparent that the success Converse is experiencing with its basketball business is causing Nike to implement new tactics in an effort to erode some of this growth.”

Nike has cut the same sort of mega-deal with the University of Miami and is negotiating similar arrangements with USC and Michigan. Following suit, Reebok is attempting to arrange a deal with UCLA that would cover the full complement of Bruin teams.

In an era of tough financial choices for many college athletic departments, such deals can be lifesavers. But at what cost?

“Just think of it. Nike has the University of Miami, lock, stock and barrel,” said Frank Vuono, president of Sports Integrated International, a New York company that arranges marketing contracts for athletes.

“That gives every one of their reps and promotional guys the opportunity to get into the locker rooms, supposedly to find out how a kid’s shoes are fitting or how the uniforms fit or how the jerseys hold up. When those kids get out of school and are approached about representation, who are they inclined to go with?

“Nike knows full well what they are doing. . . . The biggest coaches, the Joe Paternos and so on, are constantly talking about morals and integrity, worrying about (athletes) getting degrees and what they do off the field, and their (athletes) are wearing the biggest ‘swooshes.’ ”

For Vuono and others, Nike’s web of summer basketball programs serves as yet another means of burning the “swoosh” into the minds of potential Nike Sports Management clients.

Nike’s Ussery counters such talk by pointing out the limited nature of Nike’s sports management interests.

Still, Nike’s move into sports management has created a dilemma for the NCAA.

Under NCAA rules, a high school athlete can receive equipment as well as certain expenses from a company sponsoring a summer event without jeopardizing his college eligibility. However, an athlete’s eligibility could be affected if he received similar benefits from an agent.

So, what is Nike?

Last spring, the NCAA Interpretations Committee ruled that Nike could continue to sponsor and fund its summer events without jeopardizing the eligibility of participants as long as the company’s sports management division was not involved.

Said Bob Minnix, an NCAA enforcement representative who monitors summer camps and all-star games: “You couldn’t separate a (prominent agent such as) Leigh Steinberg from what his real business is, which is being an agent. But you can separate several areas with Nike.

“Their main thing is to sell shoes. Like fingers on a hand, (Nike’s shoe and sports management interests) are together, but separate. I don’t know. Time will tell if that whole view of things will end up changing.”

Calling the ruling by the NCAA Interpretations Committee “a joke,” Louisiana State Coach Dale Brown, who endorses Reebok, said he will work to change it.

“Why don’t we run the same camps and take kids who aren’t stars and develop them? Let’s take the guys who don’t have good (basketball) skills,” he said. “Well, of course, that’s not the way it works. It’s the superstars who go. And why are they going? Because somebody’s profiting from it. And now, if Nike can represent those kids, I think that’s absolutely, totally ludicrous.”

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Nike, for its part, did not seem particularly sensitive to the issue in setting up its “Fab 40” tournament.

“Come See 40 Players Better Than Michael Jordan,” proclaimed Nike’s ad in the Portland Oregonian touting the portion of the competition that was open to the public.

Among the players on display was Felipe Lopez, a 6-foot-5 shooting guard from New York who is perhaps the top senior prospect in the nation.

Lopez’s presence in Beaverton was, by some accounts, due as much to his choice earlier in the summer to attend Converse’s ABCD camp in Ypsilanti, Mich., (run this year by Vaccaro) as it was to his talent.

“(Nike) was never going to have access to Felipe,” Vaccaro said. “So how do you get it? You fly him across the country for three days . . . show him the Michael Jordan Center. Now you’ve got an entree.”

Said Pat Barrett, who runs a Southern California spring league for Nike: “Sonny badmouths Nike, so some of the kids think Nike is bad. These kids from the ABCD camp who were brainwashed by Sonny got to go up (to Beaverton) and see what Nike is all about.”

Shuebrooks, a former coach at Texas A&I; University who joined Nike two years ago after stints with other shoe companies, has declined to discuss any aspect of the “Fab 40” event, referring all questions to Peters, the company spokesman.

Peters said the notion that the “Fab 40” was a way to get a leg up on Vaccaro is “speculative.”

Exposing the top high school players to Nike was, he said, one reason for staging the event. But the company also had other reasons, he said, such as helping the players improve their communication skills and giving them insight into NCAA rules.

As for the idea that the event was simply another way for Nike to get its hooks in the next Mourning or Jordan, Peters said: “For as many times as the warm, fuzzy feelings prevail (between a company and a professional athlete), I’m going to suggest that those warm, fuzzy feelings are much, much less significant than the green stuff.”

Outside “the berm,” however, there are many who remain unconvinced.

Sparks, the Maryland high school administrator who compared the “Fab 40” to “child abuse,” recounted how he recently received a letter from Nike explaining the company’s position. According to Sparks, Nike’s letter described the “Fab 40” as a way to give the participants “a positive playing and learning experience while building emotional ties with Nike.”

Sparks found the letter to be less than reassuring.

“When I read that, I said, ‘Hey, they still haven’t figured out why everybody’s upset,’ ” he said. “It hasn’t dawned on them. When they put in a letter that they are building emotional relationships (with high school players), who’s kidding whom about what’s going on?”