Billionaires Occasionally Lose! - Marty K’s Unfiltered Sports Takes Episode 7

Billionaires Occasionally Lose! - Marty K’s Unfiltered Sports Takes Episode 7

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Welcome to Marty K's Unfiltered Sports Takes, where opinions and facts intersect. This is yours truly, Marty Kaiser. Be there. Happy Tuesday, everyone. Marty Kaiser here with our Tuesday edition of our uh Unfiltered Sports Takes. And uh hope everyone had a great weekend and is looking forward to a good week. Um we're gonna go over some some huge stuff today. Uh the uh the big thing that's gone on, which we're gonna go over in somewhat detail, is what I call the big story. What is that? Well, the Los Angeles Clippers, an NBA basketball team, tried to circumvent the salary cap, and basically they got caught with their hand in the cookie jar and faced huge penalties. Well, what does that mean exactly? Well, for the serious and the non-serious fans, let me go and do a little bit of an overview to make this more understandable. In both the National Basketball Association and the National Football League, they have salary caps on the teams. So basically, what that means, without getting too deep in the weeds, is that each team has a total payroll that they're constrained from going over. In basketball, if they have what they call the first apron and the second apron. So if they go over these salary caps, uh right now there's they're paying significant tax penalties in the NBA. And that's gotten a lot more complicated the last couple of years. But for years now they've had a salary cap. And the point of the salary cap from the uh ownership standpoint as well as the commissioner, in my opinion, anyway, is that uh it's a way to somewhat control salaries, but I guess more importantly, from their position, they don't want um a super wealthy, wealthy owner to come in and kind of disregard uh what they consider to be reasonable spending and just outspend everyone. So that's why they came out with the the salary cap years ago. And they've had a couple instances where they've had some questionable activities. They had a real big circumvention situation uh around 30 years ago in 1995. But of course, in those days, salaries were considerably lower, and that was with the Minnesota Timberwolves, and they did get penalized pretty heavily, but I won't bore you with the details. So bringing us up to current date, uh it came out about a year ago on a podcast by Pablo Torres that he gave some information out that inferred that there were some illegal goings-ons in Los Angeles that were basically salary cap intervention. I mean, uh not interventions, but salary cap violations. And he mentioned in particular uh the Clippers' most well-known player right now, Kawhi Leonard, and that he had uh kind of an under the table agreement um with a vendor called Aspiration. It's come to pass that Aspiration uh was more of a Ponzi scheme. It was run by uh uh let's just say some very questionable individual who ended up uh getting convicted of uh fraud and different violations and is in jail now. But the crux of Pablo Torre's reporting on that particular violation was that the LA Clippers kind of coordinated uh a relationship with aspiration so that Kawhi Leonard could get paid significant amounts of money that would be paid by aspiration, so it wouldn't count against the basketball salary cap. So basically, that would be a way to get a player a lot of extra income and disregard the salary cap, which obviously was illegal based on uh the rules in the National Basketball Association and the premise behind it. Uh they wanted to have a level playing field for each team, and so they they commissioned an investigative study by a well-known investigative law firm called Wachtel, Lippin, Lipton, Rosen, and Katz. So this has been in the news in varying varieties for almost a year now. But up until recently, you know, this report was ongoing, it hadn't been printed or anything. And according to what ESPN had come out with about a month ago, they said there was no smoking gun, that even though it looked like it was a shady arrangement, there was really nothing tying the clippers into doing this intentionally to get Kawhi Leonard additional income that would circumvent the salary cap. So then all of a sudden, uh this past week, I believe it was on um Wednesday of last week, uh the NBA announced that they had uh the report came out and they were the the penalties and such that they um prescribed to the Clippers were huge. Uh so you know basically I'll give you just a few of the highlights because I don't want to bore you too much, but basically what they said are the following that they had been able to prove that um the Clippers had affirmatively initiated off-court off-court income opportunities between Kawhi Leonard, and they actually tied him in with four different companies Aspiration Partners, Boeing Wireless, who's the cell phone provider, Dactronics, and Locked in Insurance. And, you know, some of the real damaging evidence was none of these companies were really companies that had in the past had uh employed endorsers or sponsors like Kawhi Leonard. And Kawhi Leonard basically had never done any kind of um media appearances or advertising or anything. He was basically getting paid large sums of money and didn't do anything. And so this study said that the uh clippers had facilitated endorsement agreements between these companies and Kawhi Leonard. They induced the companies to enter into these agreements by the Clippers offering them business from the team. In other words, they would pay these companies for different services. Um they were also paying additional personal expenses on behalf of uh Kawhi Leonard and his representatives. And they also failed to report improper solicitations for off-court income opportunities made on Kawhi Leonard's behalf through his then business manager and close relative, Dennis Robertson. So they they had they actually published a 35-page report on this. I've printed it and read it, and it's very damaging. I'm not gonna bore you with the report on this podcast, but if you want to go online, just put in the Wachtel report and you can download this 35-page report. Um the NBA and the National and the National Basketball Players Association have entered into agreement confirming these penalties are final and binding. And the investigation is still somewhat ongoing in the sense that whacktel and lipton, it's possible they'll find other illegal activities by the Clippers. But right now, these are the um penalties that have been entered into, and the uh Players Association has signed off on it. Now, what were the penalties that were actually found? Well, basically, there were you know several huge things, but I guess you could say here are the biggest ones. The Clippers have forfeited five first-round draft picks, uh starting in 2029, 2030, 2031, 2032, and 2033. Now, for those of you that don't follow the basketball comings and goings as as uh intensely as I do, you know, the draft is the way the teams build teams. So in in the NBA, basically your first round draft pick is hope that it would be uh a significant player that can improve your team. They have two rounds of drafts in the NBA, but the second round drafts are just kind of uh you're hoping to get lucky, but you don't really expect a whole lot. The first round drafts are where you want to get players that are really going to benefit your team. So if you can imagine for five consecutive years, they don't get any draft picks. Plus, the other way to build your team up or doing trades between one team and another. And a big part of doing trades right now is if you trade for like a high profile or a star player, usually with all the complications with the salary cap and putting together terms that the teams are going to like, you usually have to include some draft picks uh as part of these trades. Well, since they don't have these five draft picks, and since they've traded away most, if not all of their future draft picks, they don't have any way to really effectuate trades right now. So this is a huge, huge penalty. It pretty much guarantees that unless the Clippers get really lucky, they're going to be one of the worst teams in the league for a number of years. They were also fined $30 million. Now, $30 million to you and me is huge. And the most teams in the NBA, it's quite large. Now that won't affect the Clippers as much because their owner, Steve Ballmer, who was one of the founders of Microsoft, is one of the richest men in the United States, and he's a multi-billionaire. So uh $30 million, I don't want to say it's uh it's a drop in the bucket, but uh if you can picture, let's say that he's worth, oh, let's let's just say to make the math easy, let's say he's worth uh $30 billion. That's 1% of his net worth, and he's probably worth more than that. So let's correlate that to you or me. Let's say we've done quite well in our business careers, and let's say we're worth a million dollars. Well, one percent of a million dollars is ten thousand dollars. So we would consider that a significant, you know, loss, but it wouldn't significantly change our lifestyle. If we were worth 10, uh, if we were worth a billion, I mean a million dollars and got fined $10,000, we still have $999,000 left. So it's not going to dramatically change us. So correlate that to Ballmer. He's worth just for this uh purpose, he's we said he was worth $30 billion and he's getting a $30 million uh penalty. So that's only 1% of his net worth. And as I mentioned, that's probably worth more than that. Now, some of the other penalties which are quite significant, the owner, Steve Ballmer, was suspended from all league and team activities for one year because he was, they've got enough evidence that they felt he was right in the middle of this and knew exactly what was going on with these different business arrangements. Their president of business operations, Gillian Zucker, was suspended without pay for one year, again for her involvement. Their president of basketball operations, who's involved with the basketball side of things, that's acquiring talent and trying to improve the team, Lawrence Frank, was suspended without pay for six months, again for the same things. Now, the only reason his penalty wasn't as severe, because he ended up being kind of the uh the guy that snitched indirectly. He had taken copious notes of all these things. So when this investigation came about, he showed the investigators his notes. So he ended up getting a lesser penalty for cooperating. I don't think the team was probably too thrilled about that because he's he's kind of the smoking one of the smoking guns in this. And then the Clipper's organization and personnel are subject to additional compliance and monitoring for a period of five years. Now, interestingly, Kawhi Leonard, who was at the center of this, and these ideas were really brought up by his management team headed by Uncle Uncle Dennis, as they call him, Dennis Robertson, he only was fined $700,000. Well, that's you know a significant amount of money. Keep in mind that Kawhi Leonard's basketball salary was over $40 million a year. And this money that they're talking about with endorsements probably was exceeding $15,000 to $20 million a year for a period of at least three years. So the only penalty that Leonard had was $700,000. And it was in the notes that Uncle Dennis and his management team, they had been soliciting other teams too before Kawhi Leonard signed with the Clippers. And the other teams basically told Uncle Dennis to pound sand. And that was ultimately one of the reasons why he ended up in a trade with the Clippers, because as different trade scenarios were discussed, none of these other teams wanted anything to do with this. So a lot of people feel that Kawhi Leonard should have gotten a much more substantial penalty. Maybe he'd been suspended for six months to a year, lost his salary, whatever the case. So the league wanted to cut their losses, so to speak, with all the negative publicity, publicity that they've received, and just really try to uh discourage any team from doing this in the future. And hopefully they've accomplished that fact because these are severe penalties. They're almost they're almost like a death sentence for a period of time. Um now the interesting kind of byproduct of this, when this report first came out, uh Steve Bomer vehemently denied these allegations. He actually sat for an interview with ESPN. Uh it was a pretty lengthy interview, and they asked him direct questions. And if you just saw the interview without knowing any of the information, he was vic he was very believable. And that you know, you would have you would have thought that he was telling the truth. He was somewhat of a sympathetic character. Uh you know, keep in mind that Steve Ballmer, prior to this, he he's been a respected billionaire businessman who was one of the co-founders of Microsoft. And, you know, in our country, unfortunately, there's a bias. If you're very wealthy, uh you have more credibility. Even though, if anything, probably the wealthy people in a lot of cases are probably less honorable than the average Joe on the street. Because one of the reasons why some people accumulate all this wealth is because they do things that are maybe, you know, on the shady side. Not every billionaire does this, but uh they they work on a different set of uh moral compass than you and I work with. And um Steve Bollmer to this day denies these allegations. In fact, when these charges came out, he and his legal team have again vehemently denied them, and they claim they're gonna take legal action against the NBA, et cetera, et cetera. So at this point, they're not going quietly. Now, most legal practitioners don't feel they have many grounds to stand on because when you're an owner in professional sports, you have to follow the rules that all owners agreed to. And and they do have so much information in writing that it's really going to be hard for a reasonable man to assume that they didn't know anything. And keep in mind, Steve Baller is a multi-billionaire. For him to claim that he had no knowledge of what his team was doing, that he had no knowledge that all these other people that worked under his supervision engaged in illegal activity, that he had no knowledge that Kawhi Leonard and his representatives didn't approach the Clippers to want extra income opportunities due to their greed. It's just incomprehensible that Steve Baller uh was this ignorant of what was going on. In addition, Steve Ballmer had claimed during this investigation that he had been duped by one of these vendors' aspiration, and that he had invested multimillion dollars in their company. You know, none of this stuff makes any sense to the common man. And if you've ever heard me in the brief time we've been doing the sports podcast and the two years plus that I've been doing my real estate podcast, what is my number one component when I talk about what's going on in this country? Facts. Facts talk, and as I've mentioned previously, BS walks. And just like in our political climate and structure, there's so much misinformation that's been verified that's misinformation. But again, we've gotten into a society where if a person tells enough lies with enough conviction, if people want to believe it, they do. And that's really one of the main failings in our country right now is that people don't demand facts. And um, we still have fact checkers, but you know, people tend to believe what they want to believe. And it and it's really sad. And as I've been mentioning, you know, over the past few months, capitalism and greed have certainly intersected, and now they're they're obviously in the sports field. Um, you know, a lot of people feel that uh, you know, sports teams and the players are making too much money, and I can't really argue against that, but we've got a fascination with entertainment and high-profile people. Think about not only sports players, but think about uh people in the music profession, think about movie stars, think about how much money they're making. I I don't know when the last time uh you've gone to um a sporting event or you've gone to a high-profile concert. But think about how much you're paying to go to these things because we have these third-party vendors in entertainment that they do what they call a lot of scalping. They buy bulk tickets and then they resell them, and they get untold uh amounts of money for this. Up until X number of years ago, and I don't remember exactly when our society changed, ticket scalping was illegal. And uh the system, I think, it was much better than because the average person could afford to attend these events. But like the New York Knicks, for example, they won their first NBA championship uh this past season. It was their first championship since 1972, so it was a 54 year gap. And it was huge news in New York. And in order to go to the championship, Championship series, if you were buying a ticket on the secondary market, you were paying four figures plus for tickets. I mean, it was ridiculous. The top tickets in some cases were going for over $100,000 a ticket. So, how many average Joes that you think are loyal, long-suffering fans of the Knicks were able to go to these games? And think about for a lot of families, going to sporting events has been a big family activity. Sometimes it's been a great bonding experience for a parent and their child. Other times it's a whole family affair. And I know most sports fans have really great memories of going to sports when they were kids with their with their parents or their dad. And it's really a shame. I know myself right now, I kind of refuse to pay a certain amount of money to go to a sporting event. I could probably afford it if I wanted to, but I'm just not going to do that. It's perpetuating a wrong on society. And as long as fans of sports, concerts, etc. continue to support them, they're going to continue to gouge the uh the average person in this country. I know my daughter, who's a uh big Taylor Swift fan, the prices that she's paid to go to a couple of Taylor Swift's concerts, you know, are crazy. And then they have to get there real early, they got to wait in these long lines, parking is super expensive. I mean, it's ridiculous what people have to pay to go to these events. And uh it's just uh an example of capitalism greed at its worst in our country. I mean, I do think that performers are entitled to make as much as they can because we're in a society that the better that you are at something, the more you're going to command on the open market. But there is a dichotomy. At some point, when the compensation gets too high and it affects society, then society needs to take a stand, or we need to put in some kind of controls. Um, I know that people get nervous when they hear about controls, but I think you have to have a little bit of controls to have more of a level playing field in society. And it's just gotten way out of control. Um, a couple um things I wanted to leave you with to ponder. Are billionaires above the law? Well, it was thought until these penalties came out that they were just going to give Steve Ballmer a slap on the wrist because he was the richest owner in the NBA, he was arguably the most powerful owner, he was well liked by the commissioner and a lot of his contemporary owners. But the NBA uh fortunately, I think, realized that they had to they had to come down hard, hard on this gentleman. And so they've kind of set up uh hopefully a precedent that billionaires are not above the law, even though in most aspects of our country you're still seeing that the real wealthy get away with a lot more than the average Joe. If you're accused of a crime and you you're rich enough, you can usually get the best light legal representation to come out with a much more favorable result. Think about some of the famous legal cases. Well, the one that got the most publicity over the last 35 years was O.J. Simpson. I think most people that just are looking at the facts of the case have no doubt that he had he murdered his wife and her friend. But um he got off with really nothing other than some civil penalties. And so I'd like to get back to the premise that facts do matter. Now, Ballmer, the biggest way he's gonna suffer, in my opinion, is his reputation and credibility. Is anybody really gonna believe what Steve Ballmer says? He's got a lot of things to think about and apologize for if he ever admits that he's got some type of liability here. Um I know myself, if I was in his position, I'd probably think long and hard and maybe consider selling the team. Because I know this is his pride and joy, it's kind of an expensive toy. He's basically retired from Microsoft because he doesn't obviously need the money. But can he really enjoy the team anymore after the way his reputation's been tarnished? Well, that's for Mr. Ballmer to decide, but I know myself I I would uh feel quite embarrassed by the events. Now, Kawhi Leonard, he's probably the personification of a greedy athlete. I I kind of use this correlation. He thinks of himself uh first, second, and third. He doesn't care about anybody but himself. And why do I say that about Kawhi Leonard? Well, Kawhi Leonard made all this money with the Clippers. He was making approximately $40 million a year legally on a on a long-term contract. The Clippers traded an arm and a leg to get him in terms of they traded a bunch of future draft picks. They traded a young player who ended up being the most valuable player in the NBA, Shea Gilders Alexander. And what did they end up with? Pretty much nothing at the end of the day, because Kawhi Leonard is injured more than he plays. Uh the success that the Clippers have had for the last year, six years has been non-existent. So when you combine what they traded for and what they got back, it's going to end up being they got like they gave up 10 number one draft picks, counting the penalties. They traded a future superstar and Shea Yoga's Alexander. They're trading Kawhi Leonard now. They had a trade in the works before all this nasty business went uh public. And so they they got very little back in the trade for him. And now they're gonna be a lousy team for five plus years. So uh, you know, they they've pretty much decimated their franchise. I know if I was a fan of the Clippers, I would call today and find another team. I certainly wouldn't spend another nickel going to any games. Why put money in the Clippers' pockets? They ought to um make the Clippers suffer as much as they can financially, even though, again, with Balmer, it won't affect him like it would a normal owner, but still they need to take it out on the Clippers. Um, you know, and the Clippers are a huge embarrassment. You know, before Balmer took over, they had another embarrassment, Donald Sterling, who was pretty much found guilty of misogynistic and racist behavior, and he was forced to sell the team, and Ballmer ended up being the o the person who bought it from him. So this has been going on with the Clippers for more than 10 years. Uh, it's just, you know, it's atrocious. I mean, you know, I I just don't know. Our society seems to have less and less um uh values and standards, and this is just an all-tenance of life. And we really have to put an end to this. Uh otherwise we're just continuing to go down a not only a slippery slope, but it but a down slope. All right, well, let's transition to a sport that doesn't have any big controversy as of today, anyway. Uh, the National Football League starts tomorrow. This is their season. So one of the things the NFL does, they get more powerful each and every year. So now they're doing, they have a game starting on Wednesday, which they've never done. So they're commanding more and more of the days. Why can they do this? Because they're the highest viewed sport in uh society, and football fans watch whenever football's on. So the game tomorrow night should be a really good game. It's a rematch of the Super Bowl between the Seattle Seahawks and the New England Patriots. In the Super Bowl, if you recall, Seattle put a pretty big hammer on New England. And this game is at Seattle. So Seattle's a three-point favorite because they have the home field advantage as well. Uh the keys to the game, I think, are going to be the two-star receivers for each team. Um, New England got A.J. Brown in a big deal that happened with Philadelphia this year. And um Seattle had the number one receiver in football last year, Jackson Smith and a jigba. So they're gonna be uh covered for the most part by the two-star cornerbacks for each team. The Seahawks have Devin Weatherspoon and the Patriots have Christian Gonzalez. And it just so happens that both of these cornerbacks, besides being two of the best cornerbacks in the league, just got record-breaking contracts. Um, they're two of the highest paid cornerbacks in the league. All they're both receiving 30 million plus each year. And in fact, Christian Gonzalez's deal was just announced yesterday. There was concern that he may not be playing tomorrow, but he signed and thrilled, obviously. And the other part of this jigsaw puzzle is the two quarterbacks, Drake May versus Sam Darnold. Drake May's the star third-year quarterback for New England, and he's a superstar in the making. Sam Darnold had a long checkered history, but over the last two years he's gotten on good teams and played uh much better. But not everybody believes in Sam Darnold, so we'll see what happens tonight, tomorrow night. Since uh we're in the prediction business because we're on a sports podcast, I'm picking New England in an upset. I think they'll win by seven points. I think the final score of the game will be 27-20. So let's see what happens. It should be a great game. Uh tune in for that. I believe the game will be on NBC tomorrow night. The other interesting, unusual game is going to be on Thursday night. It's coming from Australia. And it's actually going to be Friday in Australia. They have a huge time difference. This is between two rivals that are both supposed to be really strong teams this year. The preseason Super Bowl favorites, the Los Angeles Rams versus the San Francisco 49ers. The 49ers lost in the playoffs to uh Los Angeles last year, and they were an injury-decimated team who had a great year considering all their injuries. The Rams in the offseason picked up arguably the top defensive player in football in Miles Garrett, and their superstar defensive tackle Aaron Donald came back. So the the Rams are loaded. The 49ers hopefully will stay healthy and be a tough opponent for them. So this should be a great game. The most unpredictable item of this game is not what I mentioned about football, it's about traveling. You say, well, what do you mean traveling? Well, for those of you that do a lot of international traveling, which I don't because I don't like traveling long distances, it's a huge plane flight to Australia. I think with all the time involved, it's somewhere around an 18-hour plus plane flight. And then you have all these time zone differences. So for those of you that do international traveling, you know it takes a while for your body to reacclimate. And this is a huge difference. And these are guys who are playing a very competitive, uh, aggressive, violent game. So how's this going to affect their body type at their clocks? Well, the reason I say time is so unpredictable is both teams are taking a drastically different approach to this game. The Rams traveled, they left San Francisco, I mean, excuse me. Um San Francisco left San Francisco last Wednesday, so they're going to be in Australia for a week prior to the game. The Rams left Los Angeles. Um they're leaving there, I believe, uh today or tomorrow. So they're basically going to get off the airplane, have a night's sleep, and then playing. So two radically different approaches. The Rams are taking the approach, they're going to travel and play in short order before their body catches up with them and they get fatigued. Um, the 49ers are saying we want a bunch of time to acclimate our bodies to the environment, so they're giving their players almost a week in uh Australia to acclimate themselves. And then the other thing to follow, just on a future level, is how these teams re-acclimate when they come back to the States for their next game. Should be interesting. And I'm very curious with this. Common sense would tell you that the 49ers have a better plan. But both teams have had a lot of studies and they've invested a lot of money, you know, with scientific evidence and stuff, so it should be valuable. I wouldn't discount the Rams only because uh Sean McVeigh and his staff, uh he's he's arguably the best coach in the NFL right now. So anytime he does something a little unconventional, I won't automatically say it's the wrong move because he's tended to be an innovator and more of a maverick. So that should be a great game. That'll be on Thursday night our time. I'm guessing it'll be somewhere around eight or nine o'clock, but you really need to check your uh local listings, as they say, for the time on that game. But that should be a great game. And then the balance of the NFL schedule. Uh most of the games are Sunday, and then of course we always have a Monday night game. So it should be an exciting season. As I mentioned in last um Tuesday's podcast, I predict the Super Bowl to be the Los Angeles Rams against a big underdog, the Los Angeles Chargers, and I pick the Rams to win. So we'll see if I'm close or way off base. So that's it for today. What do you think of the Clippers' penalties? Do you think they should have been even more stringent? Do you think Kawhi Leonard should be suspended or thrown out of sports? Anyway, those are some things. For football fans, enjoy the games coming up this week. Uh stay hydrated. As I mentioned, we're still getting a lot of rain. So get your activities done before it rains. Um for those of you that do a lot of outdoor activities, continue to use your sun products because skin cancer is not a thing to laugh about. And this is Marty Kaiser out.