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Conflict of Interest? Rich Paul, Klutch Sports Agency, and Lebron James: The NBA’s Known Impropriety

basketball on floor

The mainstream media does nothing now because they’re partners with the very industries they’re supposed to report on.

As it pertains to sports, ESPN will not touch anything that could even be remotely be controversial.  They get scared like a deer in the headlights on topics like Lebron’s minute usage that should be obvious round table discussions.

Status quo, right?

We expect corporates and their minions to be wimps nowadays.

Zach Lowe wants no part of anything in the dark corners.  He’s scared and I think he’d be the first one to happily admit that.

Woj just wants to be the first to report something he’s allowed to report on.

Stephen A. Smith’s on a short leash on anything that might involve political correctness and you can tell he’s well aware, so much so he’ll let Molly, the “host” of whatever show he and Max Kellerman are on, annoyingly interrupt him at will.

Others are just mouth pieces being puppeted by whomever.

*Correction, I heard Jackie McMullan on one of the recent ESPN NBA podcasts (possibly the one talked about down below) and she was saying a lot of truths.

The one little engine that could, Bill Simmons, is dead.  Bill sold out to influence years ago when he started gaining mass appeal.  You can now find him making up excuses for Kevin Love sucking (he for real thought Love was a superstar) or kissing up to cupcake Kevin Durant at his increasingly successful taco stand, The Ringer.

What’s funny about the Durant situation (he’s been on Bill’s podcast, what, like 4 times now) is that KD’s antics are exactly the kind Simmons would have had a field day with in his glory days.  Actually, you know what, the old Bill would make fun of himself now, too.

I could go on and on about the silence of the media sheep – nobody talks critically anymore: CBS, Fox Sports, Sports Illustrated, etc..

For example, when the Peyton Manning PEDs story courtesy of Al Jazeera came out, the media scattered like a bunch of cats who got dumped out of a card board box. They didn’t even know which way they were going, all they knew is it wasn’t towards an investigation that exposed a sacred American hero like Peyton “My-Wife-Orders-Cases-of-HGH” Manning.

[Here’s the Al Jazeera video in case you’re interested: https://www.youtube.com/watch?v=wJRPxmTuxoI PS If you search Google for Al Jazeera Peyton Manning, Al Jazeera’s site does NOT come up on the first page. That’s #censorist.]

Deadspin was the one outlet who maybe would have done something a few years ago but they got devenomized after the Hulk Hogan debacle and now only curse in their headlines to look tough.

Telemundo (Spanish media company who bought Gawker, Gawker owned Deadspin) has that cast of millennial penny bloggers writing only on pieces that don’t step on toes.

[Dear The Athletic, if you really want to have a premium site, do some actual independent investigative journalism on topics that no one else will touch. People don’t care about columnist’s worthless opinions anymore. Give us the leg work and behind the scenes access we DON’T HAVE. Then we’ll pay.]

So here I am, a guy who keeps a casual pulse on the NBA (basically I skim through Reddit a few minutes a day) and occasionally writes about it on his business blog for fun and because NO ONE will touch certain topics.

For example, I wrote on how HORRIBLE the Spurs front office has been.  Gregg Popovich gets a pass for some reason but the Spurs took what could have been a max player and turned it into Patty Mills and Pau Gasol.  Click on the article to read more.

Here’s where I called out Tillman Fertitta for being broke and said the Rockets wouldn’t pay Chris Paul the supermax.  People are rightfully saying that’s a horrible contract (4-160) but what isn’t acknowledged is Daryl Morey shaved off that 5th year at $50 million!  Not that he deserves a ton of praise for that but there are dumb GMs that would have given in to the temper tantrum style of Chris Paul.  Remember, Paul had said going into the negotiations that he wouldn’t accept less than the max – oh yes you will CP3-6 weeks (great nickname Clutch Fans).

Also, I wrote this PEDs in the NBA (allegedly) piece because the steroid topic just lays out like an overweight, sunburned sea lion on the front lawn every time we hear Lebron claim he spends $342 million a year on nutrition and fitness.

Got to combat that whole common sense narrative going around, right LBJ?

Just a quick note on that before I continue with the story at hand: AS IF NONE OF THESE OTHER STAR ATHLETES WOULD SPEND $Xmillion on innocent training if they could prolong their extended prime like the new #23 has.

Anyways, Lebron’s become really obvious lately.  He used to be more measured but aging has a way of giving people truth serum and now he’s just flaunting to NBA teams and GMs that he can do whatever he wants.

Just look at this display (reminds me of a spoiled kid who knows he can’t be touched dressing down a principal and teacher who called him into their office):

Check out 14 seconds in where he flatly contradicts himself within 4 seconds:

Reporter: Were you surprised by how much reaction it generated?
Lebron: No, anything I say will generate something.
Reporter 2: Did you know that when you said it?
Lebron: No.

He’s not nearly as smart or clever as he thinks he is but he’s still got tons of power/influence as the reigning Michael Jordan of the league so everything works out for him.

It’s easy for onlookers to confuse someone being smart with being powerful because powerful people have this knack for getting what they want.

Trust me, if Lebron is 6’4 he’s suddenly not so smart.

Anyways, as Brian Windhorst said in a podcast right after the Anthony Davis quote (surprisingly, I might add), Lebron knew EXACTLY what he was doing with his recent Anthony Davis comments.

Check out the 35 minute mark of this podcast where Windhorst says Lebron specifically made a point to tell his colleague Dave McMenamin to publish his quote about Anthony Davis:

http://www.espn.com/espnradio/play?id=25583195

“This particular situation, it was outside the media scrum and he told Dave McMenamin that he wanted it on the record. I can tell you from knowing Lebron he knew exactly what he was doing.”

Of course, most of us know this.

Lebron’s been unsubtly pulling strings and exerting influence in the NBA for a while now.  Just as his smug smile in the interview above would indicate, Lebron has his very elementary blueprint in place.

Philosophically, as a sports league, I think you have to accept that tampering will happen.  It’s desirable/understandable to have an anti-tampering policy but it can’t be enforced except for when someone goes on a major talk show and openly talks about another team’s player so it’s almost pointless to pretend the league has these standards.

BUT, the reality is the league does have tampering rules in place sooo… are you just going to pretend you don’t see that 18-wheeler turned over on the side of the road, Adam Silver?

What gets glossed over – EVEN UNDER THESE RECENT TAMPERING EVENTS – is Lebron’s best friend, Rich Paul, on paper has his own sports agency which primarily acts as an agent for NBA players.

Let that sink in for a second.

That’s not tantamount to tampering, that’s a direct CONFLICT OF INTEREST of a certified NBA agent.

A sports agency is supposed to act at the behest of its clients, NOT AT THE DIRECTION of Lebron James.

For those that can’t see the conflict, let me explicitly spell it out for you:

Lebron James MADE Rich Paul because Paul was his best friend.  Without Lebron James, there is no Rich Paul NBA agent.

So who do you think really calls the shots at that agency?

This 2012 ESPN article by Chris Broussard has two gold quotes which illustrate my point:

“…a week later he (Rich Paul) received a check from King James Inc. It was his first two weeks’ pay. There was no plan — certainly no business plan — in place then, but James was confident they’d figure it out along the way. “I just felt like Rich was someone I wanted to grow with,” James says. “He’d always kept it real with me, and I wanted him to be down with my team.”

Notice those two words in bold italics, my team?

Hmmm does that sound like someone who’s ceding control over to his best friend?  Or does that sound like someone who’s making a gift to his best friend he knows he can trust to run his business operations as he sees fit?

Here’s the second quote:

One longtime GM who has dealt with Paul: “There’s no specific training to be an agent. Most of the smart ones are more marketing guys than anything else. Is Rich sophisticated enough? Well, he’s sophisticated enough that he has LeBron.”

Exactly.

Is Klutch Technically Tampering?

And now let’s get into the actual teeth of this article, is Klutch Sports, entangled as it may be with one Lebron Ramone James, actually in violation of either the NBA Constitution and By-Laws or the National Basketball Players Association (NBPA) Regulations Governing Player Agents (amended first in 2016 and then again February 2018)?

Significant fact: Here was the NBPA document that was in existence when Paul rose to be an agent.

In the earlier NBPA doc, it mandates a 4-year college degree but refutes that in the next sentence:

To be eligible for certification, the applicant must have received a degree from an accredited four year college/university. The Committee shall have the authority to determine whether relevant negotiating experience can substitute for any year(s) of education.”

Tip to whoever the hell wrote this: When you say an applicant MUST have a degree, that means it is REQUIRED, not that it MAY be substituted by “relevant negotiating experience.”

Rich didn’t have a degree at the time and only now has an honorary degree from Cleveland State University.

(Note: Honorary degrees immediately delude your educational program of credibility. The whole point of a degree is for an institution to certify that an individual has met educational rigor/criteria in stated programs. When you hand these out liberally, it undermines the credibility of your program.)

Back to the college degree or experience application requirements, how much do you want to bet that Lebron James was Rich Paul’s negotiating experience?

Anyways, they’ve since slightly improved the wording though it still is horribly worded:

“To be eligible for certification, the applicant must have received a degree from an accredited four year college or university, provided that the NBPA, in its unreviewable discretion, may accept relevant negotiating experience to substitute for any year(s) of formal education.”

How do they make it better, you ask?

Just say something like an applicant must have EITHER a degree or relevant negotiating experience.

Ugh. I’d be more forgiving here if this wasn’t a 100% formal governing regulations document that should have been reviewed, revised, and edited and re-edited 20x before being published.

As for Rich Paul meeting the criteria for being an agent, reading into what the spirit of the NBPA is, the college degree requirement can be dismissed in favor of whatever the hell the NBPA Committee on Agent Regulation deemed as “relevant negotiating” experience.

Basically, they have wiggle room to certify him based on their whims.

Continuing on…

The Prohibition

What’s very notable is the 2018 doc has this section which didn’t exist in the previous doc:

Section 3 | Prohibition on Players as Agents

For purposes of negotiating the terms of a Uniform Player
Contract or otherwise dealing with a Team over any matter,
players are prohibited from (a) representing other current
or prospective NBA players as an agent certified under the
Players Association’s Regulations Governing Player Agents, or
(b) holding an equity interest or position in a business entity
that represents other current or prospective NBA players as
an agent certified under the Players Association’s Regulations
Governing Player Agents.

Section 3 gets right into the heart of the matter. Under subsection (a), Lebron is in the clear because he isn’t technically the agent of any NBA player.

Under subsection (b), Lebron is also technically in the clear as the NBA is said to have investigated the matter and found that Lebron has no official equity interest or position.

And I actually believe that. Lebron’s not going to have some slip up on the filing of Klutch Sports Group’s LLC certificate of formation where he lists himself as a member.

In theory (and probably reality), he just pulls puppet strings unofficially. It’s not like he needs or even wants the few millions Klutch generates, he just wants the POWER and INFLUENCE it affords him over NBA franchises and the league itself.

This is worth repeating: Klutch Sports doesn’t make that much actual money 2-4% of their NBA contracts is what, a few million in profit?

Lebron doesn’t care about that. Even if they made $10 or $20m, he’s fine with dishing off some money to his boys.

That’s one of the most ridiculous aspects of this whole spectacle. Pretending that Lebron would be out for the direct financial perks of 4% of a few NBA contracts is as disingenuous and asinine as when David Stern said he didn’t think PEDs would help NBA players.

Back to the doc…

The wording on this 2018 doc is so slippery because it gives the presumption of the NBPA actually giving a damn about doing something about this type of thing but the language cited above completely makes it easy for someone like Lebron to walk right out the backdoor.

Wonder who the drafters of this document were…hmmm…

Another selection that caught my attention is this:

the NBPA requests and requires under these Regulations that the Player
Agent accept as a threshold that he has a singular duty to act as a fiduciary; to unconditionally serve to protect the interests of the Players he represents; and to perform those services with honesty, integrity, competence, transparency, and free of any conflicts—real or apparent.

We could fruitlessly argue most of that paragraph’s wording (there’s no hard evidence to point to that Klutch Sports doesn’t act as a fiduciary, etc.) but the standout line here is that agents are to represent free of any conflicts – real or APPARENT.

That word apparent deserves a bold and a circle, ladies and gentlemen because it’s VERY apparent to me that there is an apparent conflict of interest when one of the top four players in the NBA’s best friend heads a sports agency which acts on behalf of other players on various teams in the league.

That’s what they call a catch-all word and if you want to take the NBPA at it’s word, Klutch Sports is in violation of that general statement baked inside the NBPA’s regulations.

Here’s another interesting rule from the “Prohibited Conduct Subject to Discipline” section, #6:

Holding or seeking to hold, either directly or indirectly, a
financial interest in any professional basketball team
or in any other business venture that would create an
actual conflict of interest or the appearance of a conflict
of interest between the individual Player and his Player
Agent;

Again, Lebron’s not officially going to be on Klutch’s books anywhere but “the appearance of a conflict of interest between the individual Player and his Player Agent” certainly catches my eye.

Here’s a theoretical example of how Klutch could come to be a violation:

Let’s say a star forward from the New Orleans Pelicans signed with Klutch Sports. And Klutch Sports, rather than acting as a neutral agent seeking to further this forward’s interests, leans and continually reroutes the conversation so that the Los Angeles Lakers, the team of Klutch Sports’ owner’s best friend, are where it seems this star forward should go.

That is a CLASSIC CONFLICT OF INTEREST.

The impropriety is flagrant and abound.

Here’s another one, #8:

Engaging in any other activity which creates an actual or
potential conflict of interest with the effective
representation of Players; provided that the
representation of two or more Players on any one NBA
Team shall not itself be deemed to be prohibited by this
provision;

Here’s something general from the miscellaneous section:

the NBPA further expects that every Player Agent
will carry out the representational services covered by
these Regulations with the highest degree of professional
competence and integrity.

Yeah, uh huh. Klutch can’t be touched, they’re so professional.

Alright so that’s the NBPA. What do the NBA’s Constitution and By-Laws have to say?

NBA Constitution

The NBA Constitution and By-laws were hidden in secret by the NBA until they had to find a way to push Donald Sterling out of the league and thus contort some language so they could ouster him.

Oh, NBA, so sneaky and hidden. Let’s just focus on the game, right Adam Silver and David Stern?

But the NBA’s hands were forced and so here we have it, the NBA’s governing rules:

https://atlhawksfanatic.github.io/NBA-BY-LAWS/constitution.html#application-for-membershiphttps://www.scribd.com/embeds/221035054/content?start_page=1&view_mode=scroll&show_recommendations=true

Oh, even more sneaky than I thought, I searched again to link to the PDF straight from the NBA instead and the PDF link which was supposed to be available on NBA.com now leads to a page that says this:

Welcome to NBA Media Central

NBA Media Central is a site exclusively for media who cover the NBA, WNBA or NBA G League on a regular basis. Please note that members of the previous version of NBA Media Central will need to register for a new account to access the new site. After you register, the NBA Communications Group will review your information and you will receive an e-mail once your account has been approved.

 

Anyways, let’s see if there are any good candies in this pinata…

The main money section is from section 2.35 (e) MISCONDUCT and reads:

Any Player who, directly or indirectly, entices, induces, persuades or attempts to entice, induce, or persuade any Player, Coach, Trainer, General Manager or any other person who is under contract to any other Member of the Association to enter into negotiations for or relating to his services or negotiates or contracts for such services shall, on being charged with such tampering, be given an opportunity to answer such charges after due notice and the Commissioner shall have the power to decide whether or not the charges have been sustained; in the event his decision is that the charges have been sustained, then the Commissioner shall have the power to suspend such Player for a definite or indefinite period, or to impose a fine not exceeding $50,000, or inflict both such suspension and fine upon any such Player.

Technically, both Lebron and Adam Silver can both wiggle out of this one.

The word “indirectly” gives way for a case to be made against Lebron but if we had a pretend trial, I think Lebron could get off the hook.

Even if not, his fate is in the hands of good ol’ Adam Silver who seems to really smile upon Lebron, much the way David Stern did Michael Jordan.

We all know what’s going on here but we don’t have a winnable case.

Section 2.35.1 MISCONDUCT OF PERSONS OTHER THAN PLAYERS paves the way for us to make allegations against Klutch. It applies specifically to a group of persons who include player agents.

Subsection (c) gives Adam Silver broad authority to do whatever the hell he wants to any supposed wrong doers:

Any person who gives, makes, issues, authorizes or endorses any statement having, or designed to have, an effect prejudicial or detrimental to the best interests of basketball or of the Association or of a Member or its Team, shall be liable to a fine not exceeding $1,000,000 to be imposed by the Commissioner. The Member whose Owner, Officer, Manager, Coach or other employee has been so fined shall pay the amount of the fine should such person fail to do so within ten (10) days of its imposition.

If we want to get bold and broad, we could say the Minotaur that is Lebron and the allegedly separate entity of Klutch Sports as a whole is against the interests of the NBA.

Multiple NBA GMs seem to think so:

http://www.espn.com/nba/story/_/id/25587459/small-market-gms-upset-lebron-james-pitch-anthony-davis

From the article:

“It’s New Orleans’ problem today, and a problem with a different player tomorrow for the rest of us,” one Eastern Conference GM told ESPN. “It’s open season on small markets and our players.”

Sounds quite “detrimental to the best interests of basketball or of the Association or of a Member or its Team”.

And then there’s more of the same. Section (f) reads:

No person may, directly or indirectly, (i) entice, induce, persuade, or attempt to entice, induce or persuade, any Player who is under contract to, or whose exclusive negotiating rights are held by, any other Member of the Association to enter into negotiations for or relating to his services or negotiate or contract for such services or (ii) otherwise interfere with any such employer-employee relationship

So basically Klutch Sports can’t tamper either.

Conclusion

Not a damn thing is going to happen because the NBA’s by-laws are worded in such a way that it’s up to Adam Silver and we’ve seen what Lebron has been allowed to get away with on his watch.

A lot of NBA non-experts like Rachel Nichols think they’re saying the right thing by praising Lebron for giving power back to the players.

Eh… kinda, mostly as a consequence rather than an actual desire though.

It’s more like he’s vacuumed up all he can for himself and then any benefits he can’t control directly, others get. But let’s be real, all of Lebron’s actions benefit are ultimately intended to benefit one person.

Lebron is entirely self-serving but very controlling of his narrative in the media to insist that he’s really not.

But at least Lebron is under the spotlight (an easy glow to deal with, but he’s getting asked some uncomfortable questions every now and then, at least).

Liberal Adam Silver really and truly cares about bathroom bills but he’s been mouse quiet about PEDs and the very apparent impropriety of Klutch Sports.

Of course, no one in the media calls him out on it.

PS Wasn’t it funny when Lebron got caught trying to pretend he can’t make roster moves when that reporter asked him if he wanted Carmelo Anthony 😂.

That was a lot like when Mark Cuban said he accounted for all the popcorn kernels at the end of every Mavs game but didn’t know about rampant sexual harassment going on inside the Mavs workplace.

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