The income Marvin Bagley III’s father received from Nike for running the summer basketball team his son played on before his one season at Duke did not prevent the NCAA from approving his eligibility to play at Duke last September.
A Duke official on Thursday said the school and the NCAA cleared Bagley to play.
"We and the NCAA evaluated his amateur status and determined him to be eligible," Todd Mesibov, Duke's compliance director, said about Bagley in a statement.
As it normally does with elite basketball recruits, the NCAA Eligibility Center completed an exhaustive examination of the Bagley family’s finances before approving Bagley to play college basketball at Duke this season, according to sources close to Duke's basketball program.
A story published by The Oregonian recently detailed how Bagley's father, Marvin Bagley Jr., filed for Chapter 7 bankruptcy in April 2008 and that their home was sold via a trustee’s sale -- an indication of a foreclosure -- in 2011.
But, by 2015, the Bagleys had moved to a gated community in southern California where the homes were valued between $750,000 and $1.5 million with monthly rents ranging from $2,500 to 7,500, according to The Oregonian story.
In between, Nike sponsored the Phoenix Phamily team that participated in the Nike’s Elite Youth Basketball League. The elder Bagley was the team’s director.
Under the NCAA's guidelines, shoe companies can fund such summer-league teams, paying for uniforms, shoes, travel and the coach’s salary without jeopardizing the players’ eligibility.
It is against the NCAA's amateurism rules, however, for athletes or prospective student-athletes to profit off their own likeness, or receive any form of payment other than an athletic scholarship. Athletes who want to turn professional are forced to play at least a year of college and give their services in exchange for free tuition.
The Oregonian story came at a time when the FBI is investigating bribery and fraud schemes that allege college basketball programs, shoe companies and agents conspired to funnel money to convince recruits to sign with specific schools.
Bagley and his father have not been named in the federal investigation.
Last summer, when Bagley completed high school a year early and enrolled at Duke, he had to receive approval from the NCAA Eligibility Center in order to play for the Blue Devils this season. That process involves determining the player has completed the required academic coursework and achieved standardized test scores that allow him to be eligible from an academic standpoint.
The NCAA also ensures that player has not violated amateurism guidelines. While the family or the player receiving money from a sports agent would violate those guidelines, there are no rules preventing a family member drawing a salary from funds a shoe company provides to run a summer-league team.
In January, multiple websites were selling merchandise, such as T-shirts and mugs, with a blue illustration of Bagley's face on them. In cases like that, athletes or the schools they attend, are required to take steps to stop it.
At the time, Jon Jackson, a spokesperson for Duke athletics, said the school’s licensing and legal teams were aware of the issue and “will take whatever action is necessary for NCAA, intellectual property and trademark purposes.”
“This is not the first time we’ve had to address this kind of issue with one of our student-athletes and we are taking the necessary steps through our compliance office and legal counsel to address it,” he said. “In all other instances such as this, the eligibility of the student-athletes was not in question.”
When asked last week what he thought of the NCAA's amateurism rules, the younger Bagley said, "I'm not the one making the rules, but it's definitely a shaky thing why you can't make money off of your own likeness.
"But I see stuff that's sold online, and that's kind of tough to see. It's very tough to see that. But it's whatever. They have an established set of rules. I'm just here to play. Follow whatever rule it is, just do what I can to follow it. Just do my best to play off of this team, and that's what I did all year."
During his time at Duke, Bagley won ACC Player of the Year and Rookie of the Year honors. He was also voted to the AP All-American team, as he averaged 21 points and 11.1 rebounds per game. Duke lost in the Elite 8 of the NCAA tournament to Kansas.
Bagley announced on Wednesday that he was declaring for the NBA draft. He is expected to be a top-three pick.