There’s a saying that’s repeated on social media every July 1, when the NBA’s new business year begins: The stuff that happens off the court is often way more interesting than what happens on the court.
That’s easy to say when there is, you know, nothing happening on the court. But the events involving L.A.’s teams on Monday added further layers to that concept, and the drama – mind you, not only for the Lakers and Clippers – might just be starting.
Early Monday, an ESPN report by Baxter Holmes suggested that the league’s investigation into salary cap circumvention with Kawhi Leonard might have some flaws, given that the smoking gun seems to be Leonard’s little-to-no-work endorsement contracts with Aspiration, a one-time marketing partner of the team, and Daktronics, builder of the huge halo board in the Intuit Dome.
“Now, the Clippers have been upfront and adamant ever since this began that their introductions (of Leonard to those entities) had been above board, (and) that it’s standard practice around the league,” Holmes reported. “(Other) sources that we’ve talked to have told us that if the crux of the NBA’s case is focusing on the introductions and not specifically hard evidence of salary cap circumvention, that they didn’t expect that this would be a case that could survive arbitration. That is the next step in a potential process towards a resolution in this matter.”
That brought two reactions. A Clippers statement basically amounted to a gleeful dunk on Commissioner Adam Silver’s head and included the following: “The fact that a player has an endorsement relationship with a company that also does business with his team is not evidence of salary cap circumvention. … After nearly a year of scrutiny, the central fact remains true and unchanged: the Clippers did not funnel money to Kawhi Leonard, arrange for others to compensate on our behalf, or otherwise provide him with undisclosed compensation outside of his NBA contract.”
To which the NBA – which according to an ESPN statement had declined to cooperate with the network’s reporting – released its own statement saying the report “contains numerous and significant inaccuracies. The results in this matter will be made clear once the investigation is concluded.”
ESPN, of course, issued a statement that it was standing by its reporting. That leaves at least four parties waiting for this thing to conclude: The network, Leonard, the Clippers, and the Toronto Raptors, whose trade for Leonard remains in limbo.
Make that a fifth party, actually. Journalist/podcaster Pablo Torre has been all over this story and seems miles ahead of the law firm the NBA hired to do its digging. Among other things, he shows his work.
Oh, but Monday’s back and forth between ESPN, the Clippers and the NBA was just the preliminary. Professional sports’ version of Succession leapt back into the news in the afternoon, and even though majority ownership of the Lakers has changed hands twice in the last 14 months or so, the drama involving Jeanie Buss and her siblings will never completely go away as long as they have anything to do with the team.
News broke in the afternoon that the Buss children, the inheritors of the franchise when their father Jerry passed away in 2013, had voted to sell their remaining 17.8% interest in the Lakers to new majority owners Bob Iger and Joshua Kushner. The rebuttal came a little later when Jeanie – who had remained as the team’s governor (i.e., representative of the club at owners meetings) even after Mark Walter had purchased the team last year – contested that vote through a letter from her attorney which called the vote “a breach of trust, breach of fiduciary duty.”
It maybe shouldn’t have been a surprise that brothers John, Jim, Jesse and Joey and sister Janie would have voted to cash out and, as their announcement said, “exit gracefully while we still can.” For one, the cash involved – assuming 17.8% on a valuation of $12.5 billion – comes to $2.225 billion to divide.
For another, Joey, Jesse and Janie were all relieved of their duties in the organization after Walter took control last year, as were John and Jim from their administrative positions.
And as of Tuesday afternoon, according to ESPN, five of the six siblings remain “united” in their intent on selling the remaining shares, with Jeanie still holding out.
According to Monday’s letter from Jeanie’s attorney, Adam F. Streisand: “No sale of the JAB Trust’s 17.8 percent ownership interest in the Los Angeles Lakers, Inc. can be effectuated without approval by the current co-trustees, i.e., Jeanie, Janie and Joey Buss. Pursuant to the JAB Trust and the attached court order, the co-trustees are bound to vote the Los Angeles Lakers, Inc. shares to ensure that the minimum 15 percent ownership requirement is maintained in order to ensure that Jeanie Buss may remain Controlling Owner.”
This would seem to give Jeanie veto power. But how this “controlling owner” business works when someone else owns 82.2% of the franchise, I do not know. The attorney also alleged that Joey and Jesse Buss leaked the story to ESPN’s Shams Charania maliciously.
But they’ve all been through this before.
Jeanie was the one her father was grooming to eventually run the team. But in the wake of his death in 2013, the internecine battles began, at that time mainly involving older brothers John and Jim. Jeanie, then team president, fired Jim as director of basketball operations in February of 2017. That led to attempts by John and Jim to remove her as president, and the upshot was that not only didn’t they succeed but a month later Jim was removed as a co-trustee of the family trust that controlled the team.
You thought that settled the family tensions? Think again. Monday’s family vote and Jeanie’s reaction added to the uncertainty already running through the organization, given two changes of ownership in a little over a year on top of what had been Walter’s intention to modernize the team’s front office structure before suddenly having to sell.
For those team employees still around, at least those that hadn’t been laid off earlier in the summer, this has to have been positively head-spinning. (Then again, whoever writes the scripts for the Netflix show “Running Point,” loosely based on the Lakers – and with Jeanie Buss as a co-executive producer – has plenty of fresh material for the show’s third season.)
Meanwhile, on top of the seismic NBA news, more information continues to emerge about the financial issues with Walter’s other businesses. Walter and Todd Boehly, his partner in ownership of the Dodgers (and before last week the Lakers), are now said to be interested in selling their shares of the Chelsea FC Premier League team to Clearlake Capital, which owns 61.85% of Chelsea and, irony of ironies, is run by new San Diego Padres owner Jose E. Feliciano.
According to one analyst, Canadian hedge fund manager Eric Jackson, selling the Lakers at a record $12.5 billion valuation and for a $2.5 billion profit only put Walter one-third of the way to solving the loan issues that necessitated the sale to begin with.
And while there are no signs that the Dodgers are on the block, remember what I wrote last week: Under these circumstances, and given how fast Walter unloaded the Lakers last week, nothing is impossible.
(Man, if I only had a few billion dollars to spare …)
jalexander@scng.com