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Wednesday, September 14, 2022

The NBA's Triple Standard Regarding Owner Misconduct

"NBA Cares" is a nifty slogan, but the truth is that the NBA cares about profits, not genocide in China or any other cause that does not help maximize profits. One could debate whether or not the NBA's primary objective should be to maximize profits, to do good for society, or some combination of various goals, but it is hypocritical for the league to pretend that its primary objective is anything other than maximizing profits.

Within the past decade, three different NBA majority owners have been implicated directly or indirectly in conduct that is racist, misogynist, and/or just generally inappropriate for a workplace. L.A. Clippers majority owner Donald Sterling was privately recorded making several racist comments in 2013, and the recording was made public in 2014. Dallas Mavericks majority owner Mark Cuban presided over a workplace with an institutional culture of sexual harassment lasting nearly 20 years, as detailed in a 46 page independent report released in 2018 (some of the conduct predated Cuban's ownership, but most of it happened while he was in charge and was done by people who he hired and managed). A just-released 43 page report documents inappropriate language and conduct by Phoenix Suns majority owner Robert Sarver.

Before we review how the NBA handled each of these situations, keep in mind that the NBA cares about profits, and note these facts:

1) Mark Cuban is a popular owner of a successful NBA franchise.

2) Robert Sarver has solid progressive credentials based on his charitable work and his outspoken support of certain causes.

3) Donald Sterling was, to put it bluntly, a slumlord.

Connect the above dots, and it is not surprising that Mark Cuban was not punished, although he voluntarily donated $10 million to women's advocacy groups. It is also not surprising that the NBA fined Robert Sarver $10 million and suspended him for one year but has not moved to end his ownership of the Phoenix Suns or Phoenix Mercury. It is not in the least bit surprising that NBA Commissioner Adam Silver banned Donald Sterling from the Clippers' facilities and strongly encouraged the other NBA owners to vote to terminate Sterling's ownership of the team; such a measure required 22 out of 29 owners to agree, but before a formal vote was taken Sterling's wife agreed to sell the team after a court found that Donald Sterling was no longer competent to make such decisions as a result of dementia. 

Examining these situations in chronological order, it should be noted that California is a "two party consent" state, which means that unless Donald Sterling consented to being recorded the recording of his racist remarks that led to him being banished from the NBA was illegal. Sterling has admitted that he made the racist remarks, but it is not clear if he consented to being recorded. Kareem Abdul-Jabbar agreed with Sterling being banned from the NBA but also said that whoever recorded Sterling should be punished, noting that every U.S. citizen--including racists--has a right to privacy. The NBA acted swiftly to sever ties with Sterling because Sterling had no support base inside the NBA or outside the NBA, and because there seemed to be a credible threat that players might boycott or take other actions that would affect profits if Sterling were not removed from power. The bottom line is that there was no economic downside to getting rid of Sterling, but a lot of economic risk if the NBA kept him around. 

The documented misconduct under Cuban's rule is significant and disturbing. Even though Cuban himself was not accused of misconduct, it is axiomatic that an organization's chief executive is ultimately responsible for the workplace culture and for the conduct of the people who he hires, particularly when those people have authority over other employees. It is difficult to picture a similarly situated chief executive in any other field keeping his job with no consequences--but Cuban is a popular, charismatic figure, and his politics are generally in line with the NBA's politics. Also, Cuban is quite savvy regarding media manipulation and he would not shirk from a fight in a court of law and/or in the court of public opinion; trying to force Cuban to sell his team could have a negative effect on the NBA, including but not limited to Cuban possibly airing dirty laundry about the league or other teams. The bottom line is that when you are both popular and powerful, the risks of getting rid of you outweigh the risks of keeping you around. Sure, over the years the NBA has fined Cuban from time to time when he shoots his mouth off, and he accepts that as a cost of doing business, but he is not an old, dementia-ridden slumlord with no allies of consequence.

The documented misconduct under Sarver's rule is mainly conduct by Sarver himself. It is interesting that the report makes a point of stating that no evidence was found that Sarver's misbehavior was animated by racist or misogynist motives; he is depicted as a billionaire businessman with a sophomoric sense of humor and a personality that thrives on bullying people/pushing boundaries. Any other chief executive who conducted himself that poorly for that long after that many people counseled him to behave differently would not keep his position, but on the NBA's caring about profits scale Sarver falls somewhere between Sterling and Cuban, but closer to Cuban. Sarver says the right things publicly and he supports the right causes, but his tenure in Phoenix has been tumultuous at times and it is no secret that his behavior toward subordinates has not always been proper. The NBA does not want to just cast aside an owner of a winning team who publicly supports their social justice initiatives, but the NBA also understands that because Sarver--unlike Cuban--was directly involved in misconduct it is not good business to just completely let him off the hook. So, $10 million--which for a billionaire is equivalent to $500 for a person who makes $50,000 a year--plus one year away from the business sounds about right to the NBA. 

The interesting thing to monitor now is that the announcement of Sarver's discipline has been met with disapproval from several media outlets, including commentators on Sirius XM NBA Radio. The NBA has rabbit ears for detecting which way the winds of popular opinion are blowing, and if Sarver is less popular than the NBA suspected then I would not be surprised if Adam Silver hastily convenes the NBA owners and figures out a way to announce that the owners reached a consensus that Sarver must be dealt with more harshly.

What is the point of comparing the disparate ways that the NBA dealt with three owners who brought disrepute to themselves and the league? The point is that process matters. If a company (or the government or anyone with power) can use any means necessary to obtain a desired result, then all of our freedoms are in jeopardy; it does not matter if the desired result in a particular instance is just--the corruption of process is a slippery and dangerous slope.

The NBA should have a defined process in place regarding owners who preside over a toxic workplace, and that process should be consistently applied. Instead, the punishment seems to be based not on severity of conduct but rather on potential negative reactions/publicity that could affect profits. If you research and read the details of confirmed misconduct, it could be strongly argued that what happened within the Mavericks organization under Cuban was worse than what happened in the Clippers organization under Sterling or in the Suns organization under Sarver--and Cuban's denials that he knew about the rampant misconduct are implausible, at best: one of his employees who later pleaded guilty to misdemeanor family violence assault and interference with emergency request fled the scene of the crime and was arrested at the Mavericks' offices!

I want to make it clear that I don't have any sympathy for Sterling, Cuban, or Sarver. It would not bother me if all three were banned from the NBA. My point is not about the punishment directed toward any one owner, but rather that the process does not appear to be grounded in objective evaluation of evidence and consistent administration of justice. The NBA is a private employer that has broad discretion in these matters, but the implications of inconsistent punishment of serious workplace offenses should concern everyone.

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posted by David Friedman @ 7:46 PM



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