Have the Maloofs threatened the NBA’s billion dollar arena subsidy industry?

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What do Faye Vincent, George Steinbrenner, and David Stern have in common?

They’re each relevant characters in the relocation saga of the Maloof family, owners of the Sacramento Kings, who are increasingly becoming a liability for the NBA.

That’s because Chris Lehane, executive director of arena group Think Big Sacramento and big-time political consultant to be played by Rob Lowe in the upcoming film Knife Fight – mashed those characters together when he sent a scathing letter to U.S. Attorney General Eric Holder on Monday. In that letter, he described the Maloofs’ harassment of at least one Sacramento business owner using an ex-FBI agent and asks for a federal investigation into the matter.

On Friday night, CBS13, the local CBS News affiliate, reported that the Maloof Family is employing a former FBI Agent whose purported activities appear designed to intimidate citizens of the Sacramento region who in recent weeks have expressed their concerns about the Maloof Family’s ownership of the Sacramento Kings.

If accurate, the report that the Maloof Family is potentially party to such unscrupulous conduct shocks the conscience at any number of levels.

First, in an era where professional sports organizations have been heavily punished for engaging in “spying” on opposing teams and putting “bounties” on opposing players – the idea that a professional sports team’s ownership group would target its own fans, including prominent and respected local business leaders who are financial supporters of the team, is simply unconscionable.

Lehane then goes in on what happened when Steinbrenner got caught paying Howie Spira, a man with an extremely questionable background, $40,000 to dig up dirt on then Yankee Dave Winfield.

Second, given the history of professional sports owners being severely sanctioned for the use of private detectives involved in comparable activities, it would appear that the Maloofs are possibly exposing themselves to sanctions. Former New York Yankee owner George Steinbrenner was permanently suspended by Major League Baseball for hiring a private detective to dig up dirt on Dave Winfield.

And for the cherry on top, Lehane asks for the federal investigation:

And, third, in deploying a former FBI Agent to engage in what was reported to be acts of intimidation and harassment, various federal criminal statutes are potentially implicated.

The complete text of the letter can be found here. It goes on to identify federal harassment statutes that could apply to the use of a private investigator, it poses the question of whether or not a federal law enforcement official was impersonated, and to tie a bow on things Lehane points out that the act occurred in Sacramento and the Maloofs reside in Las Vegas – creating a jurisdictional argument to be made in favor of federal prosecution.

Even though this seems jarring when taken at face value, unless there is a real smoking gun that could translate into serious charges against the Maloofs this is just a way to shine a light on their behavior. It’s more likely the audience here was really Stern and the other 29 NBA owners.

Furthermore, the real reason why Lehane brought the Steinbrenner incident into focus is the “best interest of the league” clause found in each of the major sports’ constitutions and by-laws. Vincent used the clause to give Steinbrenner a lifetime ban for the Spira incident (among other factors), though Steinbrenner later exerted enough pressure to be reinstated after two years of riding the pine.

There has already been some talk, some published and most of it unpublished, that Stern could or should use the NBA’s version of the best interest clause to force the sale of the team or nicely encourage ‘the boys’ to negotiate in good faith with Sacramento. The motivation is simple. The Maloofs don’t appear to have the money to run an NBA team, the NBA doesn’t need another Sonicsgate, and the NBA itself has gone to great lengths to preserve the Sacramento market.

The questions (in order) are, however, can he do it, will he do it, and at some point does he have to do it?

According to the Marquette Sports Law Review, the commissioner’s office is installed within the framework of a “monopolistic business association,” shielding the NBA from being bogged down by litigation so long as the commissioner’s office provides “due process” for disputes between players, owners, and the league itself. The office is supposed to act as a disinterested reviewing body with the power and independence to sanction players and owners alike. This body gives the owners the ability to ‘obviate judicial interference,’ which is a fancy way of saying the courts stay out of their business on a multitude of legal issues. From the league and owners’ perspectives, a commissioner can resolve certain conflicts faster and more effectively (read: cheaper) than the courts can.

This “due process” is also an important mechanism required for the league to avoid antitrust suits in relocation disputes. If you recall during Stern’s press conference just hours after George Maloof and his antitrust attorneys torched the Sacramento deal, he said “I am very sensitive of the rights of the Maloofs to do what they did.” That’s because in past relocation disputes, leagues have lost cases because they did not give owners, such as Al Davis and Donald Sterling, an appropriate forum and process to apply for their relocation requests. As distasteful as the Maloof’s actions were, honoring the application and due process of a relocation request is paramount and the likely motivation behind Stern’s comments.

This doesn’t mean, however, that the Maloofs get to unilaterally hurt other NBA owners or the league as it considers their relocation request. Moreover, the ‘best interest’ clause sits side by side with antitrust law to determine how much, if at all, the Maloofs can hurt the NBA and its other owners with their relocation activities. While all of this gets fleshed out inside of Stern’s due process, not to mention outside of the due process with all of the various arm-twisting that goes on behind the scenes, it’s the due process itself that upholds the commissioner’s office as a viable mechanism to obviate judicial interference.

And none of that interference may be as important to obviate as the monopolistic protection the NBA receives as it leverages limited supply (teams) against tremendous demand when it threatens to leave cities if public subsidies are not provided for owners.

These subsidies are a billion dollar item on the balance sheet over multiple years, and it is in the best interest of the league to ensure that it places its best foot forward in how it markets its product to municipalities and their taxpayers.

Should any NBA owners be found to be negotiating in bad faith during arena discussions, as it appears the Maloofs may have, the association could be found liable for losses derived from a failed negotiation – in this case over $500,000 for Sacramento and thousands of hours of time by its city staff and representatives. And because of the tax dollars at play nationwide, both lawmakers and the courts will look to the commissioner’s office to see that due process is being carried out on behalf of all parties, from owner to taxpayer.

As if the overall issue of the Maloof’s relocation wasn’t enough, it was learned earlier this week that the proprietor of a Sacramento website called Ransacked Media both personally met with the Maloof’s private detective and later released confidential emails between NBA attorney Harvey Benjamin and George Maloof. While all leaks are not created equally, if it is found that the Maloofs materially harmed the league’s ability to negotiate with future municipalities because they leaked this information it is just more trouble for Stern and the 29 other owners to consider right now. And it can’t reflect well that discussion of the team’s television deal with Comcast was made available for the masses, as Benjamin put it “We agree regarding Comcast, but no one thought it would be wise as a public matter to put this in a public document.”

Well, it’s public now.

Clearly, there are questions surrounding the Maloofs’ end-game strategy and why they would want to own a basketball team amidst serious concerns about their finances. The NBA’s owners told us repeatedly over the summer that very few teams are making money. As the Kings have been among the league’s lowest spending teams for years, they’ve shown that they can’t or won’t spend the money needed to be a title contender. By some reports the Kings are enjoying an approximate $10 million revenue sharing stream and while ticket sales and sponsorships may hold steady for now, the chance for another PR blunder to destroy whatever goodwill is left in Sacramento remains high. As for that revenue sharing, Stern alluded to the fact that the owners could always vote to change their mind about the Maloofs’ continued receipt of their share.

Politically, the Maloofs have all-but destroyed any chance of getting a publicly-funded arena in Sacramento that would meet the needs of the NBA and the city. Their solution to renovate the current arena is an obvious attempt to produce evidence in an antitrust lawsuit, as they will likely seek public funds that will be denied because the current arena is nearing the end of its useful life. Putting any money into it, let alone public money, has been decried as ludicrous by every third-party that’s not a puppet for the Kings. But the family will say they did all they could to make a deal work in Sacramento and that everybody else let them down.

So after burning every bridge in California’s capitol, the only option on the table for the Maloofs that doesn’t include them financing their own facility is to move and/or sell the team. And none of the options to keep the team present the Maloofs with a tremendous financial advantage over this last deal that the NBA negotiated alongside them.

Moving a team to Anaheim, for example, will return at least a $300 million relocation fee as the result of infringing upon the Lakers and Clippers’ markets and render the family upside-down in their investment without some serious help. Seattle just reached a Memorandum of Understanding agreement on Wednesday with investor Chris Hansen that is pending, and the city’s investment of up to $120 million for an NBA-only arena will need to clear all the red tape that Sacramento’s did. Regardless, Hansen isn’t spending over $500 million to roll out the red carpet for the Maloofs. Otherwise, you can add Vancouver, Louisville, Columbus, and Kansas City to the list of cities whose names have landed on the radar, and none of them provide the Maloofs a path to improve their financial standing or support their entertainment holdings. All they provide is a lukewarm bidding war to raise the sales price of the team.

Talking with sources close to the negotiations, it’s clear that many of them are done trying to understand what the Maloofs are doing right now. Exasperated would be the appropriate word. Did the Maloofs threaten an antitrust suit and did the NBA respond by threatening a relocation fee in Orlando? Did the Maloofs leave Orlando with an agreement in principal only to decide days later to leverage their antitrust rights? Are they buying time in hopes that a game-changer comes through the pipeline? Has all of this simply been an exercise in selling the team? Does it even matter at this point? The damage is done. Sacramento has spun its wheels for a family with all questions and no answers, and could very well be left without a team if nothing is done about it.

Now, in their apparent pursuit of evidence for an antitrust case, it appears they may have crossed more lines and bitten off more than they can chew. Whatever their motives may be – they continue to encumber the league’s standing with customers, cities, its own owners, and eventually with lawmakers and the courts.

The appropriate question for the league and its owners is – at what point does the behavior become a recognized liability and at what point do they figure out that holding the line isn’t the smartest play.

Ultimately, it’s in the best interest of the league that they figure this out quickly. Billion dollar subsidies don’t grow on trees.

Report: Hawks near buyout with Ersan Ilyasova; Bucks, Raptors interested

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This is about as big a surprise as my wife crying during “This Is Us,” but it sounds like it’s about to go down.

The Hawks and Ersan Ilyasova are close to a buyout, reports Michael Cunningham at the Atlanta Journal-Constitution.

The Hawks and forward Ersan Ilyasova tentatively agreed to a buyout of the remainder of his contract, according to a person familiar with the negotiations. Once Ilyasova accepts a buyout and clears waivers, as expected, he will be free to sign with any other team for the rest of the season.

Ilyasova’s contract expires at the end of the season and he is eligible to become a free agent in the summer. Earlier this month, Ilyasova invoked his right to reject the trade offers the Hawks presented to him.

Where might he land on the buyout market?

A lot of teams could use a 6’10” guy who can space the floor as a shooter. Ilyasova signed a one-year, $6 million contract with the Hawks this season. He’s averaged 10.9 points per game, shooting 35.9 percent from three this season, and missed some time with a shoulder injury.

Ilyasova is solid as a spot-up guy but is more dangerous as a screen setter where he can pop out and space the floor, or roll and use his size inside. He’s also good at cutting and working off the ball, plus will get a team a few offensive rebounds. He’s not a game changer, but in certain matchups, he could help teams a lot.

Report: Warriors, Timberwolves, Thunder interested in Joakim Noah if he is bought out by Knicks

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Hand me the salt shaker, I’m going to need some extra for this rumor.

My skepticism aside, let’s pass this rumor along: If Joakim Noah can reach a buyout with the Knicks, at least three playoff-bound teams have interest in him, according to Frank Isola of the New York Daily News.

According to league sources, several playoff-bound teams are closely monitoring Noah’s situation in New York and would push to sign him if Noah becomes a free agent.

The Warriors, Timberwolves and Thunder are three such teams that believe Noah, who turns 33 on Sunday, could bolster their respective rosters for the postseason.

A few thoughts.

First, I don’t question that the well-connected Isola got this from a reputable source.

My question is who leaked it? Or, better yet, who benefits from leaking it? That would be the Knicks — they want Noah to agree to a low enough buyout number that it’s a real benefit to them. The idea that playoff teams — and the leading title contender at that — interested in Noah’s services helps the Knicks make a case that he has good options where he gets on the court if he agrees to the buyout terms. Leaking this is a way to ramp up a little public pressure.

That doesn’t mean it’s not true, either. It’s not hard to picture these teams having interest: Tom Thibodeau loves bringing back former players, and both the Warriors (who started JaVale McGee Thursday) and Thunder could use help on the front line. Do any of them think Noah can provide that help at this point? He has been a shell of his former self in recent years. Would those teams actually sign Noah? Who knows, and for the Knicks they don’t care.

Noah is owed $36.5 million for the two seasons after this one, which is why trading him is next to impossible. In a somewhat similar situation in Atlanta Dikembe Mutombo took about $10 million off his salary in a buyout, would Noah do that to get on a contender? That’s what the Knicks are hoping.

Lonzo Ball on college basketball: ‘Everybody knows everybody’s getting paid. Might as well make it legal’

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The logs of payment by Andy Miller’s former agency to high school and college basketball players leaked today.

That has sparked discussions about the entire system, and Lakers rookie Lonzo Ball has a thought.

Tania Ganguli of the Los Angeles Times:

Simply, I don’t believe Ball about not getting extra compensation at UCLA. That sounds like he caught himself going further then he wanted and attempting to backtrack.

I can see why Ball wouldn’t want to admit getting extra benefits. He still knows people at UCLA, and an NCAA inquiry based on his comments could hurt them – and his reputation at UCLA.

But NBA players should be outspoken on this issue. They have the power to apply pressure on the NCAA’s cartel system, in which schools collude to limit compensation to athletes. As long as that system remains, college players lose out, getting only under-the-table scraps, while coaches and administrators hoard the major money.

Good for Ball for pointing out the farce. It’s easy to stop caring once players reach the NBA and gets rich, but NBA players are uniquely equipped to shine a light on the NCAA’s problems.

Michele Roberts: Cap smoothing was ‘disgraceful request’ by NBA

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In 2016, new national TV contracts pushed the NBA’s salary cap from $70 million to $94.143 million – a larger jump than over the entire previous decade. Free agents cashed in majorly that summer.

But now, the cap is leveling off. It went up to just $99.093 million last year and is projected to reach only $101 million this year and $108 million next year. With so many lucrative long-term 2016 contracts still on the books, free agents the following few years haven’t gotten and won’t get comparable compensation.

The problem was predictable, and the NBA proposed a solution at the time – cap smoothing.

Players get 49%-51% of Basketball Related Income (BRI) each year, the precise amount determined by formula. The salary cap is set so teams’ payrolls collectively reach that range. (There are procedures if teams fall short or pay too much.)

With cap smoothing, the NBA would have set an artificially lower cap for 2016-17. Players would have gotten less than 49%-51% of BRI in salary, but presumably, the league would have distributed the difference to players after-the-fact. That way, all players – not just 2016 free agents – would cash in.

But the players union rejected the plan.

NBA commissioner Adam Silver has looked back longingly, wishing the union approved. National Basketball Players Association executive director Michele Roberts, um, has not.

Roberts, in a Q&A with Paul Flannery of SB Nation:

When the salary explosion happened and you rejected the smoothing idea that the NBA proposed, has anything that has happened in the last few years caused you to reconsider that stance?

No, in fact it’s completely confirmed the correctness of that position. I delight and the players delight in reading about some of these contracts because they know they absolutely deserve it.

There was going to be no smoothing of the owners’ profits at all. They were going to enjoy real money that reflected where we were financially as a game. Why in the world would players pretend that the game was not making as much money and therefore have smaller contracts?

It was an absurd suggestion, I thought personally. But what we did to make sure it wasn’t just Michele’s instinct was hire two separate economists to tell us whether this was something that was going to be of value to our players in the long run.

Independent of each other and not knowing what either of us felt, they both came almost saying, “Are you kidding? Why would you do this?”

I don’t have any regrets at all. I don’t think a single player does either.

Not a single owner came up to me and suggested that they thought we should do this. The league did. But I didn’t see any chorus of support from any of the owners. I thought it was a disgraceful request.

It’s impossible to evaluate whether Roberts was right without knowing the particulars of the NBA’s smoothing plan. That has not leaked.

She implies the league proposed artificially lowering the cap (which, again, is determined by formula based on revenue) for the first year or two of the new national TV deals without offering the players something in return. I find that hard to believe. At minimum, it seems likely the NBA would have distributed the rest of the 49%-51% of BRI to players not earned in traditional salary.

Not that that would have been enough for the players to favor cap smoothing.

Players’ salaries are sometimes based on their previous salaries under cap rules. If only a portion of players’ NBA-provided income was considered official salary, that could have debilitating long-term effects.

Perhaps, the NBA could have accounted for that. But it seems there was little negotiating here. The league made a proposal, and the union rejected it.

I’m not sure which side benefited, and evaluating that becomes even more difficult when dividing the sides into competing interests.

For argument’s sake, let’s say rejecting cap smoothing led to more money for players. That largely went to 2016 free agents. What about all the players still under contract that summer? They didn’t get to reap the rewards.

What’s a better measure – the amount of money players collectively gained by rejecting cap smoothing or the percentage of players who earned more money by rejecting cap smoothing? There’s no easy answer.

And there’s more than just money at stake. Most significantly, a lack of cap smoothing allowed the Warriors to sign Kevin Durant. How many players prefer that never would have been possible?

I’m just not as convinced as Roberts rejecting cap smoothing was the right call. At minimum, negotiating a cap-smoothing compromise could have worked.

Many players already under contract in the summer of 2016 have been waiting their turn for a huge payday. But wait until many of them find out their windfall wasn’t just delayed. It’s not coming. Then, some of Roberts’ constituents might question her insistence that rejecting cap smoothing was correct.