Pablo Torre has been making life miserable for the NBA, the Clippers, and Steve Ballmer with new info on the Kawhi Leonard contract drama coming out all the time. The gist of it is that Pablo is presenting credible evidence that Ballmer and the Clippers circumvented the NBA salary cap by funneling money to Leonard through another company called Aspiration. If you want to know more about it, read here or listen to Pablo Finds Out. What I want to go through now is what comes next in the NBA discipline process.
What’s Next?
The NBA has hired a law firm called Wachtell, Lipton, Rosen, and Katz to conduct an investigation into the Clippers alleged salary cap circumvention and issue a report. The report will consist of documentation and interviews from all the sources they can think of including the Clippers. Unfortunately, no one is obligated to cooperate with them.
It is important to know that this is NOT a criminal investigation or even a civil one (we’ll come back to this). This is basically an internal company investigation with no legal power behind it. However, if certain parties like Steve Ballmer refuse to cooperate, the law firm will put this into their report and it will possibly be used against them later.
The report itself may or may not be released to the public. That is at the discretion of the person who commissioned the investigation and will receive the findings, Adam Silver. In the end, Adam Silver will use the report to make the determination of punishment, if any.
THIS IS NOT A CRIMINAL TRIAL!!!
There is a big misconception out there about how this works. Despite what talking heads and the Clippers will say, “innocent until proven guilty” is not a thing here. That’s criminal law. If you hear someone say that, just know that they do not know what they are talking about or are purposely lying to sway your opinion.
Another regular misconception is that circumstantial evidence is not real evidence or somehow irrelevant here. That’s just not true. Circumstantial evidence is basically something that looks damning, but is not a smoking gun. You basically have to take one logical step to connect it to the overarching scheme. In a criminal trial, the accused just needs to create doubt in that evidence to discredit it. Not here though. The Clippers better have a damn good reason why one of their minority owners invested $2m in a company going under, and then that money was used to pay one of the company creditors who does literally nothing instead of paying staff and actual business partners. That’s UNBELEIVABLY GOOD circumstantial evidence.
The NBA has a ton of leeway to issue punishment under the NBA Constitution and the CBA. They can use circumstantial evidence to infer that a team was cheating. Waiting until a smoking gun was unearthed would mean almost no one would ever get punished and the league would be in anarchy. If Adam Silver feels that a punishment is warranted based on that evidence, he can make it so. It’s not that cut and dried though.
If the Clippers do not like the decision that is made, they can appeal it to an arbitrator. Arbitration is a private court that has its own agreed upon rules and standards. I’m not privy to what those rules and standards are specifically, but they are usually very similar to those of civil court. This is VERY different than criminal court. In criminal court, yes, the accused needs to be PROVEN guilty “beyond a reasonable doubt.” This is a very high standard needed to take away someone’s liberty. In civil court it is by a “preponderance of the evidence.” This is a fun way of saying, that if the evidence shows that you violated the rule and you don’t have a good explanation, you are in trouble. It is much lower. Think 99% sure vs 51% sure.
This is Not a War
The NBA doesn’t want to go to war about this (and neither do most attorneys) because “war” or a trial can have unintended consequences like airing of dirty laundry and it lacks certainty. Whether it is arbitration or a criminal/civil trial, both sides are regularly looking to compromise (legally speaking, that’s called a settlement or plea deal). They call each other up and talk about leverage and evidence off the record to try to convince the other side that they either have the goods or that it is in their best interests for other reasons to resolve their issues with a certain agreed upon punishment (in the legal system, Judges do not have to accept these agreements, but usually do despite what you see on TV). The NBA is no exception. If they reach a compromise, then it never gets to arbitration.
Now and over the next few months there will be meetings between Ballmer and Silver to try to work this out. They will not be nice meetings. Silver is not an individual figure in this whole process. Sure, he is the one making the decision, but he is a steward for the league itself and the employee of the 30 owners. In any settlement/punishment for Ballmer, he has to make sure he has the support of the majority of his other 29 bosses. Ballmer knows this. That’s why these meetings will likely include fiery promises of exposing the cheating of other owners. Guys like Ballmer are prepared for this kind of thing. He’s an adorable looking dufus on the sidelines, but you don’t get to be one of the richest individuals in the world by being nice. He knows where the bodies are buried and will let Silver and the other owners know it.
Ballmer also knows that he still needs to be punished in some way for the satisfaction of the 3rd party in all of this, the consumers/league partners. The NBA has to be seen as legitimate and what the Clippers have allegedly done undermines the hell out of that. In the end, there needs to be punishment that at least looks like it has teeth. If a penalty is issued and there is no appeal, then you know they worked things out. However, if there are massive penalties and an appeal, then get your popcorn ready.
Who is In Control Here?
A better question is who has more bargaining power? Well, it depends on how crazy Ballmer is. If he has dirt on enough of the other owners, then he can either burn down the league or get them to bury the story as much as Pablo Torre will let them. If the other owners are scared enough of Ballmer, then he holds the cards. However, if Ballmer doesn’t have enough dirt, then the league will be able to pretty easily put him and the team in NBA jail with fines and draft pick forfeitures.
Make no mistake, the circumvention issue is a done deal at this point. They did it. Don’t listen to Mark Cuban and other talking heads who either have skin in this game or don’t know what they are talking about. They are telling you what they want you to hear, not the truth of how this thing is going to go down. There’s bad news coming, we just have to wait and see how bad it gets.
Philly Front Office 
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