Decoding the Kawhi Leonard Investigation, with DeMaurice Smith

A superstar held up by the salary cap. A billionaire under the microscope. A league inquiry hidden from public view. De Smith has seen this playbook for punishment before. The former NFL union boss — and white-shoe law-firm investigator — returns to answer questions the NBA still won't: Who is "independent" when the league (and Steve Ballmer, in particular) pays the legal bill? Why would witnesses participate if they face potential criminal exposure? How do unions play the long game? And what obligation does a league have to its fans, if cheating can be the baseline? • Read "Turf Wars" https://www.penguinrandomhouse.com/books/735685/turf-wars-by-demaurice-smith/ by DeMaurice Smith • Subscribe to PTFO on YouTube https://www.youtube.com/@PabloTorreFindsOut for breaking-news updates on Kawhi-Gate • Previously on PTFO: The Man Who (Relentlessly) Sued the NFL Has Receipts https://pod.link/1685093486/episode/NjlmMDExMThjMDBmOGE1ZDFhMzA1NmEz (Pablo Torre Finds Out is independently produced by Meadowlark Media and distributed by The Athletic. The views, research and reporting expressed in this episode are solely those of Pablo Torre Finds Out and do not reflect the work or editorial input of The Athletic or its journalists.) Hosted on Acast. See acast.com/privacy https://acast.com/privacy for more information.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Pablo Torre?

  Welcome to Pablo Torre Finds Out. I am Pablo Torre, and today, we're gonna find out what this sound is.

• 0:06Speaker 01

  So the first thing that every fan should do when they hear the word independent is stop thinking that it's independent.

• 0:15Pablo Torre?

  After this.

• 0:18Speaker 02

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• 1:00Speaker 02

  That's G-A-B-B dot com forward slash get gab. Gab: Tech in Steps. Independence for them, peace of mind for parents.

• 1:12Pablo Torre?

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• 1:56Pablo Torre?

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• 2:19Pablo Torre?

  I want to do a thing that I think people are expecting me to do to the point of exhaustion, which is talk about the Kawhi Leonard story.

• 2:26Speaker 01

  Really, what's happening? Haven't heard.

• 2:28Pablo Torre?

  Well, that's an operative question. What is going on? Looking at the clock, looking at the calendar.

• 2:33Speaker 01

  Could be happening in the world of perhaps salary cap fraud. I mean, I don't know what could be happening.

• 2:40Pablo Torre?

  Well, on Tuesday, Adam Silver happened to address the whole Kawhi Leonard Clippers investigation timeline. In addition to the trade that was supposed to happen between the Clippers and the Raptors for Kawhi, that seemed done and then wasn't. And so we have new sound of the commissioner at the big NBA Board of Governors press conference out in Vegas.

• 3:02Speaker 03

  I am not conducting the investigation, nor is the league office that's being conducted by the Wachtel Law Firm, independent of the league. Of course, as I've said previously, we all have an interest in wrapping this up. And I think I most recently said in an interview that I'm hopeful that it will wrap up this summer. So that would continue to be the goal here. And I just want to clarify, you know, so everyone understands, I mean, the league did not pause the trade. The parties to the trade made a decision not to go forward, given that the investigation remained open.

• 3:38Pablo Torre?

  We await. We await the thing that's supposed to happen, as the NBA continues its independent investigation.

• 3:44Speaker 01

  Independent investigation. Well, then we're fine.

• 3:46Pablo Torre?

  Well, this is why you're here, Demora Smith. Thank you for being back in studio with me.

• 3:49Speaker 01

  Please, it's always a pleasure.

• 3:51Pablo Torre?

  Well, I want to establish that you have a particular, and I think singular, ability to explain a complicated thing that is an NBA story, but a lot more than that.

• 4:02Speaker 01

  Yeah.

• 4:03Pablo Torre?

  Because your job, for those not familiar, executive director of the NFLPA, the Players' Association, for about 14 years?

• 4:09Speaker 01

  Almost 15.

• 4:10Pablo Torre?

  Before then, you were a federal prosecutor.

• 4:13Speaker 01

  Was.

• 4:13Pablo Torre?

  Working for the Justice Department as an assistant U.S. Attorney in DC.

• 4:17Speaker 01

  Yep.

• 4:18Pablo Torre?

  Was that fun?

• 4:19Speaker 01

  Best job I've ever had in my life.

• 4:21Pablo Torre?

  Why?

• 4:22Speaker 01

  I primarily handled violent crime and homicide. So I was there for about six, almost seven years. You get to go to work every day and do the right thing. And second, being a lawyer in the Justice Department where you are charged with, you know, first and foremost, defending the Constitution. I know that's a rare way of thinking about it, given the administration. But the role of a Department of Justice lawyer is to simply ensure that the dictates of the Constitution are followed. And it's a rare day that you have a job like that.

• 4:53Pablo Torre?

  It takes us in your professional timeline to Latham.

• 4:57Speaker 01

  Yep.

• 4:57Pablo Torre?

  Latham and Watkins, one of the premier white shoe law firms in the United States, where you did what?

• 5:02Speaker 01

  I co-chaired the White Collar Crime, representing businesses, individuals who allegedly, have to even laugh, allegedly created, you know, offenses. It was primarily a business practice, but you know, for the almost 10 years that I was a partner, you're representing large corporations, pharmaceutical companies, defense contractors, either in the middle of a criminal investigation, or they think that they have uncovered some sort of criminal problem. And you're hired to do one of two things. Either A, if it comes to the attention of the government, obviously you now are the defense lawyer for the company. If the company thinks that they are aware of criminal activity

• 5:44Speaker 01

  that violates the securities laws, they might ask you as a partner to do an internal investigation that we would call an independent investigation. That would be designed to uncover who, when, where, what. And in those cases, you're either reporting to the board, you might be reporting to the audit committee, you might be reporting to compliance. But let's level set. You're being paid by the company.

• 6:13Pablo Torre?

  Well, okay. I want to level that here before we tumble down into that particular perspective. Because what you've just established in those three stops on your resume is a particular authority on questions of how a union in sports

• 6:27Speaker 01

  Sure.

• 6:27Pablo Torre?

  might oversee a controversial legal dispute. You've also just attested to the fact that, from the Justice Department perspective, you have a sense of what the laws might be and how they are respected or not. And at Latham, you just said that you did, now, let's put a number to it, how many independent investigations for such companies?

• 6:51Speaker 01

  I don't know. Fifty, hundred, 150. I don't know. I mean, literally, it is, it's the bread and butter of your practice. And you're doing probably four simultaneously, honestly.

• 7:03Pablo Torre?

  And so this is a story, the Steve Ballmer, Clippers, Kawhi Leonard story, that involves a company in aspiration that has been under the microscope by the federal government for securities law

• 7:15Speaker 01

  Sure.

• 7:15Pablo Torre?

  infractions.

• 7:16Speaker 01

  Sure.

• 7:16Pablo Torre?

  It involves the richest owner in American sports, Steve Ballmer, who was an investor in that company to the tune of 50, then in total, $60 million. It involves the superstar player, Kawhi Leonard, aforementioned, who was the recipient of a no-show, organic marketing deal, according to our reporting, in which he did nothing to get paid more than he got paid by his sneaker sponsor, New Balance, as well as, in totality, individually, more than four times what Leonardo DiCaprio, Robert Downey Jr., Drake, Orlando Bloom made combined.

• 7:51Speaker 01

  Wow.

• 7:51Pablo Torre?

  So, market rate being a consideration, he blew that out of the water.

• 7:56Speaker 01

  Yeah.

• 7:56Pablo Torre?

  And the reporting on this, by the way, as I welcome others, as always, into a pool where the water is quite warm. The Athletic, Mike Vorkunov, has reported now that the outside counsel, Wachtel Lipton, is examining now if Kawhi Leonard had a previously unreported endorsement deal with yet another company. He's also reporting that team executives around the league have increasingly come to expect that the league will punish the Clippers, as always. Mileage varies on such expectations. But the fun thing just to get into visually here is that there are graphics which we will show on our YouTube channel here.

• 8:32Speaker 01

  There's some graphics.

• 8:34Pablo Torre?

  The quote here is that some in the aspiration marketing department heard that Leonard was into comic books and superheroes, so that was floated as a concept. The effort went so far as to create images, reviewed by The Athletic, of Leonard as an offshoot of Marvel's Groot. And as the show that established that Kawhi Leonard didn't plant trees as a part of his, again, no-show job that we have previously reported, seeing what appears to be horrific AI images of Kawhi Leonard just like treeified in what feels like, I think, a crime against intellectual property.

• 9:12Speaker 01

  I'm gonna need therapy after this.

• 9:14Pablo Torre?

  I mean, Groot being the tree guy from Guardians of the Galaxy, Kawhi having just like [bleep] sticks sticking out of his head. There is that, but according to Athletic, after weeks of trying to work with the Marvel concept and brainstorm other ideas, the creative team was told to quit, according to multiple former aspiration marketing employees. Quote, "Stop thinking about Kawhi," the person said they were told. "This feels like a dead end," end quote. And I guess for that particular detail, it is a dead end. It is really the beginning of our conversation here.

• 9:47Speaker 01

  We're thankful it was a dead end.

• 9:48Pablo Torre?

  And we also now are at a table at which we await what the NBA's preferred outside counsel, Wachtel Lipton, which is feigned.

• 9:59Speaker 01

  Sure, sure. One of the best law firms in the country.

• 10:01Pablo Torre?

  Very well-respected, and they are doing the quote-unquote "independent investigation." And when I say the word "independent," I see you smile.

• 10:14Pablo Torre?

  And I want to get now...

• 10:15Speaker 01

  Yeah, let's just get into it. Let's get into it.

• 10:35Pablo Torre?

  Let's get to Capsur Convention in a bit.

• 10:37Speaker 01

  Yeah.

• 10:37Pablo Torre?

  But just the investigation and how this works and what it really means to be quote unquote independent, which is the word that I've heard every media member pronounce and proclaim. It's the word that the league always goes to.

• 10:49Speaker 01

  Sure.

• 10:49Pablo Torre?

  This is not us.

• 10:51Speaker 01

  No, no, it's not us. It's independent. It's independent. Well, I would invite fans to think about the NFL's independent investigation of Dan Snyder, former owner of the Washington Commanders team. And you remember, there were certain allegations with respect to cheerleaders, certain allegations with respect to workplace misconduct. There were allegations about all sorts of things, including whether or not he was adequately sharing revenue with the other owners. And I want fans to think about, um, when was the first time that they saw the results of that independent investigation?

• 11:26Pablo Torre?

  Hmm.

• 11:27Speaker 01

  The answer would be never.

• 11:28Pablo Torre?

  I was gonna say, I'm about to Google an answer that I don't think exists.

• 11:31Speaker 01

  It doesn't. There was a long-term investigation actually done by a former partner of mine, Beth Wilkinson. We were both partners together at Latham and Watkins. She had started, I think, the investigation when she was representing or hired by the Commanders. Later on, she was hired by the league. But if you remember, the results of that internal independent investigation has never been released.

• 11:52Pablo Torre?

  Right.

• 11:52Speaker 01

  So the first thing that every fan should do when they hear the word independent is stop thinking that it's independent. Start asking questions. Is it independent of whom? Is it independent of the general counsel? Probably not. Is it going to be released to the public? We don't know. So instead of just adopting this word independent as if it were some sort of magical, singular, truth-facing investigation that will then be released to the public so that everybody can see exactly what happened.

• 12:30Speaker 01

  That is probably not necessarily the case.

• 12:32Pablo Torre?

  Yeah, I mean, the thing that I have been waiting for is not vindication from this law firm that is, by the way, paid by the National Basketball Association.

• 12:46Speaker 01

  And by the way, hopes to be further employed.

• 12:49Pablo Torre?

  As the recurring go-to outside counsel.

• 12:52Speaker 01

  Just made an observation.

• 12:53Pablo Torre?

  And also, just observing here also, that the guy ultimately on the hook for the bill happens to be Steve Ballmer.

• 12:58Speaker 01

  Sure.

• 12:59Pablo Torre?

  And so purely from a following the money perspective.

• 13:02Speaker 01

  Yep.

• 13:03Pablo Torre?

  If you follow the money, as I try to do and try to be transparent in doing, what I am not waiting for here is vindication for the reporting I've done, which leans on two whistleblowers who submitted to the federal government, as I say, in a way that is almost like a Jack in the Box at this point. Under penalty of perjury in a federal whistleblower complaint in 2023, these two aspiration employees attested in their explicit written text that this whole story with aspiration was a cap circumvention scheme with the Clippers for Kawhi Leonard. What I'm waiting for is to know what the NBA is willing to tell us.

• 13:41Speaker 01

  If anyone out there is holding their breath, waiting for this report to be a 250-page report that's going to include spreadsheets, I wouldn't hold your breath.

• 13:51Pablo Torre?

  And I love spreadsheets.

• 13:52Speaker 01

  Oh, who doesn't? You want spreadsheets. You want phone records. You want things that are on cell phones. You want the granular proof that demonstrates what happened. And what I would say about internal investigations that are done on behalf of a company, that's what they want. They may not want it to be public, but that's what they want.

• 14:17Pablo Torre?

  The question that I have that I want you to help explain is, in the process of their investigation, who are they, generally speaking, as a guy who's done these investigations? Who are they communicating with? How often? And how does that inform what their scope is?

• 14:33Speaker 01

  Yeah, well, think about it in reverse. They will start off with, you know, and I can only talk about my personal experience.

• 14:38Pablo Torre?

  That's what we're here to do.

• 14:39Speaker 01

  You would talk about your scope first. After you determine the scope of the investigation, the next thing that you are going to do is literally just sit down and write a list of all of the individuals that you want to talk to. Now, that list will be much longer than the list of the people that you actually talk to. Why? Independent investigators for a corporation cannot compel people to talk to them. And you've cleverly pointed it out. There could be people in the course of this investigation who will not talk to Wachtel Limp.

• 15:18Pablo Torre?

  Correct.

• 15:19Speaker 01

  If you're an employee, you have to comply with the internal investigation or risk getting fired.

• 15:25Pablo Torre?

  If you work for the NBA in some capacity.

• 15:27Speaker 01

  Correct. But it's not like somebody is going to drag the individual into a grand jury.

• 15:32Pablo Torre?

  When you're a federal prosecutor, you had the power of subpoena, the power to compel people to...

• 15:36Speaker 01

  The good old power of jail. And in private practice, you don't have that. So if an employee does not want to talk to you, the outcome there is someone makes a decision whether or not that employee is going to be fired.

• 15:48Pablo Torre?

  So the Clippers, for instance, they feel the authority of the NBA in a way that an aspiration current or former employee does not have any legal obligation to.

• 15:59Speaker 01

  And the third thing is there are or could be certain people who might have a Fifth Amendment privilege. And if you have a Fifth Amendment privilege, a good lawyer, even hopefully a bad lawyer, would tell you not to answer questions in an internal investigation because anything that you would say to lawyers can be used by the government. It is no longer privileged.

• 16:20Pablo Torre?

  Okay, so this is interesting. I didn't fully appreciate this. So the Fifth, you know, pleading the Fifth meaning you can remain silent in any legal setting.

• 16:26Speaker 01

  It's your constitutional right.

• 16:28Pablo Torre?

  The risk of participating in an NBA investigation, which is different from a federal or in any way legal, state, local investigation, the risk is that that information in that setting can then be used?

• 16:44Speaker 01

  Oh, 100%. Hundred percent. The reason why the general counsel is coordinating this investigation is, I promise you, the first draft of that internal investigation is privileged.

• 17:01Pablo Torre?

  Hmm.

• 17:01Speaker 01

  One hundred percent privileged.

• 17:03Pablo Torre?

  Meaning, who can see it?

• 17:04Speaker 01

  Two things fall into the broad relevant privilege if you're a lawyer. One, I'm representing you, our conversation is confidential, it's privileged. Second large category is if I'm doing work to help you as my client, the work that I generate, we call attorney work product, which is also privileged, where this investigation would probably fall into. Later on, the general counsel, or the company, or the CEO, or the board of directors can make a decision that they want to make portions or all of this internal investigation non-privileged. But in all likelihood, is going to be privileged up until that point.

• 17:44Pablo Torre?

  Hmm.

• 17:45Speaker 01

  So if someone makes a decision that they might have a criminal exposure, they will probably not talk to the investigators during an internal investigation.

• 17:57Pablo Torre?

  So the question really is, what is the cost benefit analysis of participation for any of the people who might know anything?

• 18:03Speaker 01

  Yeah.

• 18:03Pablo Torre?

  That could help answer the question of what the [bleep] really happened here?

• 18:07Speaker 01

  Well, I'll tell you what, I think that when fans and, you know, sometimes people in the media hear the word independent, they have this connotation that there's going to be some truth teller who is then going to tell the truth. Well, you're gonna have people who are interested in the truth, but that independent investigation, let's put it this way, is still for the most part, if it's privileged, under the lock and key of the general counsel, the CEO, and the other people in the organization.

• 18:38Pablo Torre?

  So this is where I want to get to something that I have learned in the course of my investigation of the investigation, which is to say that...

• 18:47Pablo Torre?

  My understanding of how often Wachtel is in communication with the NBA's general counsel, with its internal legal counsel, those lawyers that work for the league itself, my understanding is that it is constant. It is every day? And Adam Silver essentially confirmed as much in that press conference we heard earlier in Vegas.

• 19:12Speaker 03

  I do get regular updates from our general counsel, who's Rick Buchanan. And he deals with Wachtel on a daily, if not weekly basis, or weekly, if not daily basis, in terms of what is hap-- who they are talking to and what they are finding.

• 19:31Pablo Torre?

  And I don't know if that feels extreme to you, or if that jives with your experience.

• 19:37Speaker 01

  That would actually jive with my experience. Investigations are living, breathing organisms, right? I mean, you are constantly trying to follow evidence trails and following up on people. You schedule interviews, they don't happen. You go deal with somebody else. You hear something from that, you reschedule the one you have. So the idea that there would be ongoing conversations isn't abnormal.

• 20:01Pablo Torre?

  Right.

• 20:02Speaker 01

  There's also one more reason why they would be constant.

• 20:04Pablo Torre?

  I want to establish that on some level, the idea that you have a client.

• 20:08Speaker 01

  Sure.

• 20:09Pablo Torre?

  The league, and they want to know what you're finding so they can figure out what they want to do about this.

• 20:13Speaker 01

  Right.

• 20:14Pablo Torre?

  And it's on a rolling, updating basis. I can understand that even as it begins to explode the premise of independence.

• 20:23Speaker 01

  Yeah.

• 20:24Pablo Torre?

  But what are you thinking of?

• 20:26Speaker 01

  Sometimes clients don't want you to write a lot down. And they would prefer oral updates. Just making an observation.

• 20:36Pablo Torre?

  Based on your experience. Convenient.

• 20:39Speaker 01

  So there's nothing really to turn over?

• 20:41Pablo Torre?

  It's the corporate law version of that quote from The Wire of, "Are you taking notes on a criminal conspiracy?"

• 20:49Speaker 01

  Right.

• 20:50Pablo Torre?

  And in ancient--

• 20:52Speaker 01

  Great show.

• 20:53Pablo Torre?

  And in ancient art, that I've come to appreciate in the world of law, on all sides of the table, is if we don't write it down, it can't be discovered later.

• 21:02Speaker 01

  It never existed.

• 21:11Pablo Torre?

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• 22:40Pablo Torre?

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• 23:06Speaker 02

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• 23:47Speaker 02

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• 24:05Pablo Torre?

  So Dee, this is where I point out that according to the last collectively bargained agreement that the NBA has with its counterpart, the NBPA, the Players Union, teams can be punished for circumventing the salary cap, and the penalties include fines up to $7.5 million, direct forfeiture of draft picks, voiding any player contract, a suspension of up to a year for any team personnel found to have engaged in such a violation, and so forth, and so on. But I think for lots of people who have been processing the story as fans or even as media, the implication is to think, well, clearly, the people who should be defending Kawhi Leonard and his representatives against the league here must be the Players Union.

• 24:49Speaker 01

  Sure.

• 24:49Pablo Torre?

  By its very nature.

• 24:51Speaker 01

  Sure.

• 24:52Pablo Torre?

  And your perspective, which I want to really detail here.

• 24:58Pablo Torre?

  It seems more complicated than that.

• 25:00Speaker 01

  It's far more complicated. First of all, will the union represent Leonard because of its obligation to represent a union member? 100%. The player has a duty of fair representation that he can be defended by his union and has to be defended by its union. But the salary cap violation makes it far more complicated because the union is a party to the agreement that creates the salary cap.

• 25:26Pablo Torre?

  The salary cap has a premise. For those not familiar, this is a restriction. It is a ceiling on what a team is allowed to pay.

• 25:33Speaker 01

  Correct.

• 25:33Pablo Torre?

  Its players, its employees. And on one level, of course, you can imagine that that seems unfair by its very nature. It's a restriction on what money can be given to people. It seems like an unfree market.

• 25:48Speaker 01

  Right.

• 25:49Pablo Torre?

  And your view on what a salary cap is, what it embodies, and therefore what position anyone who is sympathetic even to a union should have about it?

• 25:58Speaker 01

  It's complicated. So let's start off from the macro to the micro.

• 26:02Pablo Torre?

  Please.

• 26:04Speaker 01

  The leagues have an antitrust exemption. And that means, for everybody out there, the leagues can operate in ways that normal businesses can't. They literally have a defined market. They have cornered the market on whatever it is. Basketball, football, hockey, baseball. What the law says is that if you have an antitrust exemption, then you must also have a union. And that union is allowed to come together with its members and with you create a collective bargaining agreement.

• 26:43Speaker 01

  So if you think of the ying as the league gets to do whatever they want, yes, the yang is, but they can be represented by a fully unionized workforce. Let me just make it 1,000% clear for the people who are listening. Every time you get done with a CBA, at the end of those negotiations, the first thing that the league ensures is that there is going to be a union. Why? Because if there is no union, they worry about losing their antitrust protection. Macro. The collective bargaining agreement exists because the owners want it because they want their antitrust exemption.

• 27:28Speaker 01

  The players want it because it gives them protection against an organization that has cornered the market. All right? So, and I get it, and I get the players and like, "Oh, we don't need a salary cap, dude, we know this and we're that." I'm like, you know, first of all, go somewhere and sit down. Because the reality is, if you didn't have a cap and the owners controlled and cornered the market, they could set a price that is far below what they're paying because of the cap. The union prevents that because it means that when they are negotiating salaries and things like healthcare and protection and pensions and things like that, you get to represent the entire body.

• 28:11Speaker 01

  And if there is no collective bargaining agreement, the risk is that the owners won't have talent. So that's the leverage.

• 28:18Pablo Torre?

  So if people hear this and they say, "But wait a minute, a salary cap feels immoral to me."

• 28:24Speaker 01

  Yeah, it does, but so does monopolies. Right? Let's flip it around just to make it really easy. You're coming out of college, there's the National Football League, there really isn't another place if you're the best talent in the world to receive the best salaries. So there's no salary cap, there's no collective bargaining agreement, and you and I are owners of the National Football League, and he comes in and he says, "You know, I'm, you know, the best running back in the league and I'm coming out, I want to get paid." And you and I decide, "Hey, we're going to pay you $100,000." And you go, "Man, there's no way I'm going to play for $100,000." And you and I say, "Uh, good luck. Go find another job." You can't. That's what we call collusion. We've had that conversation.

• 29:09Pablo Torre?

  In a previous episode.

• 29:11Speaker 01

  So, the idea, when people think about salary caps, would any union member love a free market if it was truly free? Yes, that is not what we have. Because the leagues already have an antitrust exemption, which means it's not a free market.

• 29:29Pablo Torre?

  So what you're saying is that a salary cap, while philosophically imperfect and inconvenient.

• 29:35Speaker 01

  It's a compromise.

• 29:36Pablo Torre?

  Is a mechanism that nets out to the benefit of the collective population of professional athletes.

• 29:44Speaker 01

  Yep.

• 29:44Pablo Torre?

  Playing in that sport, insofar as it not only sets a limit on what they can be paid, it's the idea that if you don't have a cap,

• 29:54Pablo Torre?

  owners can just gather and communicate and get away with whatever they would like.

• 29:58Speaker 01

  And how do we know this is true? College.

• 30:04Speaker 01

  Right? I mean, you think about it. I mean, yes, players now have the NIL deal, but what did that take? An antitrust lawsuit to win?

• 30:13Pablo Torre?

  So is your suggestion here that a salary cap is as much market guidance as it is a mechanism to enforce?

• 30:21Speaker 01

  It's both. It's absolutely both. And again, it's just like the draft. And every now and then, you know, you would hear players, "Well, you know, Dee, I don't like to have the draft. The draft should be the free market." Again, just replay the same hypothetical that we went with. You would play for $100,000, $200,000 because you can't get any more money anywhere else. And if that's the case, the bad guys win. So, the draft, the salary cap, everything that goes into a tortuous, and I mean tortuous, collective bargaining agreement, is a compromise. But that compromise is predicated on the fact that there has to be a union because the leagues have an antitrust exemption.

• 31:05Speaker 01

  So, when I look at a salary cap violation, I look at it as a violation of our agreement. You can't simply start and end with, "Does a player benefit from it?" Well, because the yang to that is, who doesn't?

• 31:27Speaker 01

  And if there's a salary cap violation, 30 teams are abiding by the rules. One team is not. It's very easy to come to a conclusion that the other 30 were victims of the salary cap violation. So I've been in that instance before as the executive director where I thought the teams were violating the rules and I would file a grievance over it. Great example for the fans out there who remember the Saints bounty investigation.

• 31:56Pablo Torre?

  This is 2012.

• 31:57Speaker 01

  2012, once again, took a lining off of my stomach. But in that case, you know, yes, did the union represent the players who were alleged to have engaged in the bounty system? Yes. Just to demonstrate how complicated that representation was, there was a walled off section of lawyers in our office who were not privy to what we were doing on the defense of the Saints, but who were working on this issue of, well, wait a minute. If there was a bounty, that bounty circumvented the salary cap.

• 32:36Pablo Torre?

  Right, these are payments for, again, excessive physical harm.

• 32:39Speaker 01

  Correct.

• 32:40Pablo Torre?

  That were not being accounted for on the cap sheet.

• 32:44Speaker 01

  Theoretically, it's a cap violation.

• 32:46Pablo Torre?

  This is a brilliant case study because it very clearly, so much more clearly than Kawhi Leonard, illustrates the, you gotta do the thing over here to defend your player, but also what you're seeing in this violation by a team.

• 32:59Speaker 01

  Sure.

• 33:00Pablo Torre?

  By an owner.

• 33:01Speaker 01

  Sure.

• 33:02Pablo Torre?

  Imploys what in terms of what's available for the union to go after?

• 33:06Speaker 01

  Well, again, you're representing the players who theoretically were not violating the salary cap.

• 33:13Pablo Torre?

  And were not able to access such payments.

• 33:16Speaker 01

  So it does become this duality that you live with as a union leader because, yes, you are obligated, and by the way, I took no apologies for vigorously defending our players.

• 33:29Pablo Torre?

  That's the job.

• 33:30Speaker 01

  That's the job. But on the other side, you do have this obligation to vindicate and protect the deal because you cannot then have a world where if you are unwilling to enforce the rules of the salary cap, now Team A, B, C, D, and E. Make deals to circumvent the salary cap. And now you're in a position where you are perpetuating inequity in the system for which you are a co-owner.

• 34:01Pablo Torre?

  But I think there is some persuasion necessary here because the instinct, again, in the world of sports is to say, but the owners are getting away with so much. And, and, and, and this is why it's, this is why my brain is broken a little bit when I think about this.

• 34:14Speaker 01

  Yep.

• 34:15Pablo Torre?

  Because what I'm hearing you also point out to me is that when you only defend the player, the union member in the Bounty Gate scandal, to continue this case study, what you're leaving on the table is the ability to go after an owner for violating, for breaking the covenant.

• 34:33Speaker 01

  If they knew about it, for sure.

• 34:35Pablo Torre?

  If, if they knew about it, if you don't hold the owner to task.

• 34:40Speaker 01

  Two things. You have completely undermined the deal and the system for which you are a co-owner. The union and that collective bargaining agreement, I mean, that starts for NFL in 1993 and it continues until today. It's jointly owned. It's ours. And because it's ours, in the same way that the owners turn on the players.

• 35:03Pablo Torre?

  Yes.

• 35:04Speaker 01

  If they perceive some violation, whether it's drug use, steroid use, domestic violence, whatever it is, the first thing you hear from a group of owners is, well, you know, we have to punish you because this is our system. Well, what is good for the goose is indeed [bleep] good for the gander, right? And, and so that's the first thing. The second thing is something that I am absolutely positive nobody else gets. The day you make a decision as a union leader to turn a blind eye to what a group of owners is doing that you know is unlawful is the day that they got you.

• 35:43Speaker 01

  And they own you from that point.

• 35:45Pablo Torre?

  They've priced out everything.

• 35:47Speaker 01

  Everything.

• 35:49Pablo Torre?

  But this is, this is when it comes to what does an underestimation of the import of the rule of law cost a union?

• 36:00Speaker 01

  I'm not underselling this, everything. It costs you everything because the union is there to hold the owners accountable. What I will tell you is virtually no one else is. So the day that they know that they have leverage over you to not hold them accountable is the day the union has lost everything.

• 36:26Pablo Torre?

  It occurs to me that if you're in a fight against someone with more money and more power.

• 36:34Speaker 01

  Sure.

• 36:34Pablo Torre?

  And more weapons and all of the metaphorical and

• 36:37Speaker 01

  Sure.

• 36:38Pablo Torre?

  in the case of the government, literal ways. The rule of law is meant in theory to protect those who have less. It is a system in which the people who don't have all the money and the guns and all that stuff can be protected with a suit of armor in which they can walk into a courtroom and stand with even footing against the richest people in the country.

• 37:06Speaker 01

  With, with a chance of winning. Right? But the other thing that comes from that, and it's more important with the ability to actually walk in court, it establishes a little bit of fear on the other side in the hopes that they won't break the law. And that's more important than the former.

• 37:32Pablo Torre?

  Yeah, no, it's, it's, it's true.

• 37:34Speaker 01

  Well, look, if, if, the, the reason why the, the owners in all of these leagues are so dangerous is I know, and it would keep me up at night, what they can do without, almost without any recourse, without, without some FBI agent saying anything, without a Department of Justice saying anything, without the SEC saying anything. Imagine, and I talk about it in my book, and it's one of the first lines in the book. If you had the power to do anything, what would you do if you knew you wouldn't get caught?

• 38:11Speaker 01

  That's the second thing I'm talking about. Once you have come to a conclusion that it is highly unlikely that you are ever going to get caught, that you're gonna have to pay back money, that you're gonna have to go to jail, that you're gonna have to have public shame. Once you've reached that point in your either professional career or the amount of money that you have,

• 38:33Speaker 01

  I have come to the conclusion that that is when you see people behaving poorly. I used to say this to our players because every now and then people didn't understand why I was filing grievances to enforce rules under the collective bargaining agreement. Cheating can never be the baseline. Full stop. Cheating can't be your baseline. Corruption can't be your baseline.

• 38:57Pablo Torre?

  Why does that matter in sports particularly?

• 39:00Speaker 01

  The fundamental necessary ingredients for sport is fairness and rule following.

• 39:10Speaker 01

  So when I'm with my class, and yes, I torture my class, and this is a sure shameless plug for my class that I'm teaching at Georgetown in the fall.

• 39:18Pablo Torre?

  It's a bunch of nerds doing nerd stuff.

• 39:20Speaker 01

  Turn nerdy, dorky stuff. The business of ethics in sport. Sport requires fairness and rule following. Entertainment does not. Entertainment only asks for an audience.

• 39:36Speaker 01

  I think from a pure, you know, straight-line business analysis even, if you lose the fact that people believe that it's any given Sunday, they believe that the rules are being followed. They believe that someone is trying to engender fairness. You've undermined your product.

• 39:59Pablo Torre?

  Do you guys want the most valuable cultural institution in the United States to remain this valuable and in fact, to continue to increase in value?

• 40:09Speaker 01

  Yeah.

• 40:10Pablo Torre?

  Because the thing that I think is very easy to lose sight of when you don't play the longest possible game, even longer than the owners in these case studies.

• 40:20Speaker 01

  Unions have to play longer than the owners.

• 40:23Pablo Torre?

  It's the risking of everything that makes it worth watching.

• 40:28Speaker 01

  Sometimes you just have to put it in a different amount of language. For the basketball players, football players, hockey players, baseball, all the players, even the players who are playing in the World Cup. You look at the insane effort.

• 40:40Speaker 01

  And the industry that that these players willingly put themselves through game after game, single elimination, World Cup champion or not, what do they absolutely insist upon? Fairness and rule following. So why on God's green earth would you come to a conclusion that you are going to expect less when it comes to the macro way in which the league is being operated? Why would you choose less fairness in the macro world than the fairness and rule following that you absolutely would insist on on the pitch? The league, the way

• 41:24Speaker 01

  it's run, the collective bargaining agreements, the business decisions that you make together have to be enforced. The history of the salary cap alone, I think it originated in the in the NBA. Insistence on the salary cap made the NFL come up with the slogan "Any Given Sunday." Why? Yes, parity. Yes, equal opportunity. You know what it really did? Man, it made for great entertainment. So why on God's green earth would you think that it's okay to have a baseline where it's okay to circumvent the salary cap?

• 42:19Speaker 02

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• 43:00Speaker 02

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• 43:17Pablo Torre?

  This brings us back to the NBA. And in the NBA, of course, there are only five players on a court.

• 43:22Speaker 01

  Yeah.

• 43:22Pablo Torre?

  For your side.

• 43:23Speaker 01

  Oh, yeah.

• 43:24Pablo Torre?

  And so the value of a superstar, mathematically speaking, is nowhere more profoundly impactful.

• 43:30Speaker 01

  Hundred percent.

• 43:31Pablo Torre?

  And so when it comes to why would you bother even doing this, attempting this? According to our reporting for someone like Kawhi Leonard, it's because that's how you win. Historically speaking, that is what you need. It is necessary, although not always efficient, but it is certainly necessary to have a guy that you think can be the superstar. And what this brings me to is what the National Basketball Players Association has said about this ongoing NBA investigation. The MBPA, which under new leadership, has said is, we agree with the Clippers. We expect there to be no there there. Not from anything we've seen. We've been involved with Kawhi and his team.

• 44:16Pablo Torre?

  And the union has taken the tack of we are here to take the side of our player. And what you've just heard in this episode, for better and for worse, is not part of what the union seems to be prioritizing or communicating at this moment of our recording.

• 44:37Speaker 04

  We're continuing to do whatever we can in order to push the investigation forward. But all we can do is make sure that that we're being responsive and in his camp is being responsive as they have been, and hopefully it wraps up soon.

• 44:50Speaker 05

  Just to clarify, when you say you don't think there's a there there, the current stance is still that you think the investigation will not find what's been accused?

• 44:58Speaker 04

  Not from anything that I've seen, correct.

• 45:00Speaker 01

  Hey, look, I never, sort of as a rule, I never, I never second guess another, another union head because I know the jobs are nearly impossible.

• 45:08Pablo Torre?

  It's really, really hard.

• 45:10Speaker 01

  It's hard. The job is awful for the most part, and it's hard.

• 45:13Pablo Torre?

  Yes.

• 45:14Speaker 01

  But I do know this and.

• 45:18Speaker 01

  The rules that you torturously negotiate are important for a lot of reasons. And, you know, that statement could have been when they knew X about the investigation and now they know Y. Or you're doing it because you have an obligation to protect the player. I get all of them. And there are days when you have to make public statements as the head of a union because you have to make public statements.

• 45:46Pablo Torre?

  And this is the new executive director, David Kelly, at the MBPA's Leadership Transition Press Conference at Summer League just last week.

• 45:53Speaker 01

  Yeah, and look, David's brilliant. The players are lucky to have him. I can only talk about the way that I would have perceived this issue knowing everything that I've read in the press. And again, a lot of it because of your reporting. I think at the end of the day, every union leader, especially in sports, has to take the enforcement of the collective bargaining agreement as paramount for all the reasons that I talked about. We've talked about why it's important for the rule of law. We've talked about why it's important for the players. But at the end of the day, I mean, none of these leagues would be here without fans.

• 46:35Speaker 01

  And so what is the obligation that a league has to its fans?

• 46:44Pablo Torre?

  I mean, my answer as a journalist is going to begin with the concept of transparency, that we have also been talking about how there is a league investigation that is not quite so independent, despite the labeling, that will, according to our expectation, not be quite so transparent. There is a union that we can say here on the show did not do their own investigation or internal inquiry and may in fact, as you suppose, be taking the side of the player as a matter of the default strategy. As here in this weird podcast studio that we have, we try to bring you at the very least

• 47:21Pablo Torre?

  the transparency of, at this point, a ridiculous 11-part investigation, which maybe, hopefully, in that ecosystem being balanced in that way, we get to a product that feels credible and worth spending your money and time and emotions on.

• 47:39Speaker 01

  Yeah, and here, I'll push back on you a little bit. Here's what I worry about. In that, in that sort of devolution from sports to, to entertainment, I wonder whether fans will care as much as you and I care. Because over the last five or six years, is this feeling by some fans that they're, that they are willing to just take or accept what's being given to them?

• 48:09Pablo Torre?

  Yeah, yeah, yeah. We should realize that, uh, someone out there is, is aware of, of the price of your indifference.

• 48:22Speaker 01

  One thousand percent.

• 48:33Pablo Torre?

  This has been Pablo Torre Finds Out, a Meadowlark Media production.

• 48:39Pablo Torre?

  And I'll talk to you next time.

• 49:00Speaker 02

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• 49:42Speaker 02

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