WEBVTT - Did the LA Clippers Take a Page from the Mob? 0:00:15.604 --> 0:00:28.644 Pushkin. Welcome back to Risky Business, a show about making 0:00:28.684 --> 0:00:31.284 better decisions. I'm Maria Kanakova and. 0:00:31.124 --> 0:00:35.764 I'm Nate Silver. On October twenty first, the NBA season 0:00:35.884 --> 0:00:38.484 will be back. One team will end the year with 0:00:38.644 --> 0:00:43.724 a dark cloud hanging over it, The Clippers. Have you 0:00:43.764 --> 0:00:45.124 heard of the company aspiration? 0:00:45.684 --> 0:00:49.284 I heard of it when preparing for this segment. So 0:00:49.324 --> 0:00:50.884 that's what we're going to start the show off with. 0:00:51.364 --> 0:00:54.004 And then we're going to talk about a very important question, 0:00:54.084 --> 0:00:58.924 which is does New York City need more millionaires. 0:00:58.484 --> 0:01:00.084 Millionaires or billionaires? 0:01:00.484 --> 0:01:03.604 Millionaires millionaires but billionaires too. I think does New York 0:01:03.604 --> 0:01:07.124 City need more very wealthy people? All right, Nate, let 0:01:07.204 --> 0:01:12.524 us start with your house, which is the NBA and 0:01:12.844 --> 0:01:17.084 the Clippers. So do you want to get us set 0:01:17.164 --> 0:01:19.964 up here since this is something that you know a 0:01:20.004 --> 0:01:22.204 lot more about, at least background wise. Yeah. 0:01:22.324 --> 0:01:26.444 Yeah, So the NBA has a salary cap. It's kind 0:01:26.484 --> 0:01:29.644 of an attempt to prevent owners, many of whom are 0:01:29.644 --> 0:01:32.564 extremely rich. In fact, one of whom is the principal here, 0:01:32.604 --> 0:01:36.444 Steve Ballmer, owner of the Clippers, Microsoft guy, one of 0:01:36.484 --> 0:01:40.124 the I think six to ten richest people in the world. 0:01:40.164 --> 0:01:43.084 But it's a way important to protect these guys who 0:01:43.084 --> 0:01:45.924 are very competitive and basically have infinite amounts of money 0:01:46.484 --> 0:01:52.564 from spending irrational amounts to have their toys be cooler 0:01:52.604 --> 0:01:55.244 when they're in the box and their team makes a 0:01:55.244 --> 0:01:57.244 deep run in the finals or wins a championship. So 0:01:57.244 --> 0:02:00.524 the league set the rules, and increasingly in the NBA, 0:02:00.844 --> 0:02:04.724 these rules are getting pretty strict and the idea of 0:02:04.764 --> 0:02:09.284 circumventing the rules is taken very seriously. Several weeks ago, 0:02:09.764 --> 0:02:14.284 the journalist Pablo Tory journalists kind of people might call 0:02:14.364 --> 0:02:15.924 him a talking head, but he did. He also has 0:02:15.924 --> 0:02:19.684 a show where he does at times very serious journalism, 0:02:20.004 --> 0:02:25.284 discover that this fraudulent carbon credit company, allegedly fraudulent carbon 0:02:25.324 --> 0:02:28.324 credit company called Aspiration, which had been a sponsor for 0:02:28.364 --> 0:02:28.844 the Clippers. 0:02:28.844 --> 0:02:31.164 It's a great name for a fraudulent company, by the way, 0:02:31.244 --> 0:02:32.324 Nate Aspiration. 0:02:33.004 --> 0:02:40.044 But basically it turns out that this fake tree planting company, Aspiration, 0:02:40.964 --> 0:02:44.844 was paying the Clippers Kawhi Leonard of probably their best 0:02:44.844 --> 0:02:48.004 player if Ka Zubach stands might disagree, but their most 0:02:48.324 --> 0:02:52.804 famous player, right multiple time NBA champion, was paying him 0:02:53.404 --> 0:02:59.164 seven million dollars a year to do literally nothing for them, right. 0:02:59.724 --> 0:03:02.324 The fact is that for anybody who scoured this right, 0:03:02.884 --> 0:03:06.404 you know, he could have tweeted something or done one 0:03:06.444 --> 0:03:09.604 little ad that got one hundred views on YouTube showed 0:03:09.644 --> 0:03:12.484 him like planting trees or something. He did not do 0:03:12.844 --> 0:03:16.644 any of that. Right. There's also been disclosures by other 0:03:16.684 --> 0:03:20.444 news outlets that Kawhi Lenary received twenty million dollars in 0:03:20.724 --> 0:03:23.724 equity in Aspiration, which is now worth precisely zero, to 0:03:23.764 --> 0:03:26.724 be fair, but a total package of like forty eight 0:03:26.884 --> 0:03:31.684 million dollars in cash inequity. And it also turns out 0:03:31.764 --> 0:03:35.084 that Seve Balmer, the owner of the Clippers, made a 0:03:35.164 --> 0:03:38.604 fifty million dollar investment in Aspiration, or the official sponsor 0:03:39.004 --> 0:03:42.444 of the Clippers, right, So that set of circumstances alone 0:03:43.204 --> 0:03:49.684 is pretty suspicious. Pablo Torri also had an anonymized source, 0:03:49.724 --> 0:03:52.524 somebody he went through the kind of vocal processing that 0:03:52.524 --> 0:03:56.364 gave him like a very millennial vocal fry. Right, say 0:03:56.484 --> 0:04:00.084 that this company's going bankrupt, right, and they actually hire 0:04:00.164 --> 0:04:03.524 legitimately famous people, and the famous people getting paid way 0:04:03.564 --> 0:04:06.364 too much to actually do something for the company. Robert 0:04:06.364 --> 0:04:10.604 Downey Junior was one, for example, gravelly voiced adr Kawhi 0:04:10.684 --> 0:04:15.284 was getting paid seven million dollars to totally ghosts this company. Right, 0:04:15.724 --> 0:04:19.724 And when people ask why is this bankrupt company paying 0:04:19.764 --> 0:04:21.964 this guy who has done nothing good offer us? Nobody 0:04:22.004 --> 0:04:24.684 even knows he's in a relationship with US seven million 0:04:24.724 --> 0:04:28.204 dollars a year, people would say things like it's CAPSIR 0:04:28.244 --> 0:04:32.404 convention loll in text messages. Right. So yeah, the theory. 0:04:33.124 --> 0:04:37.724 The theory is that Seve Balmer, I'll be vaguer. The 0:04:37.804 --> 0:04:42.604 claim is that the Clippers found a way through this 0:04:42.924 --> 0:04:47.564 company aspiration that their owner is also an equity investor 0:04:47.604 --> 0:04:50.524 in to pay Kawhi Leonner a bunch of extra money 0:04:50.564 --> 0:04:52.604 so he'd sign in LA with the Clippers and not 0:04:52.684 --> 0:04:55.324 the Lakers, or not stayed in Toronto or back to 0:04:55.364 --> 0:04:59.884 San Antonio or the Houston Rockets or whatever else. And 0:04:59.964 --> 0:05:02.924 if you're into NBA gossip, Maria, this story at what's 0:05:02.964 --> 0:05:05.324 normally a slow time for the league has been has been. 0:05:05.724 --> 0:05:09.404 The hot dish? Is that a real thing? I don't use. 0:05:09.604 --> 0:05:11.764 Hot dish is like a Minnesota thing. And I think 0:05:11.804 --> 0:05:13.524 it's a real term. I think I picked that up. 0:05:15.244 --> 0:05:15.884 The hot dish. 0:05:16.044 --> 0:05:18.564 It's okay, it's okay, we'll pretend well, we'll make. 0:05:18.444 --> 0:05:20.804 It a thing like Amy Kloba Sharp brings the Minnesota 0:05:20.844 --> 0:05:22.924 State Fair. I don't think that's. 0:05:25.684 --> 0:05:28.044 That's a very funny visual, you know, it's so funny. 0:05:28.164 --> 0:05:31.164 So when I started researching this, because you know, this 0:05:31.284 --> 0:05:33.804 is not in my wheelhouse, the first thing I thought 0:05:33.844 --> 0:05:39.004 about was mob stuff, and specifically on the Sopranos, where 0:05:39.044 --> 0:05:41.924 they had these contracts where they had no show jobs, 0:05:42.204 --> 0:05:44.244 right and you were guaranteed a certain number of no 0:05:44.324 --> 0:05:47.044 show jobs, where like that was just a way of 0:05:47.084 --> 0:05:50.164 getting kicked back, getting money around. And when I was 0:05:50.204 --> 0:05:53.164 reading this, I was like, wait, they're taking they're taking 0:05:53.204 --> 0:05:56.324 a page out of the mob playbook to try to 0:05:56.364 --> 0:05:59.844 circumvent caps and get money to the right person in 0:05:59.924 --> 0:06:04.564 a kind of kickbacky way without actually having a paper 0:06:04.604 --> 0:06:07.164 trail all aught. This time they did have a paper trail, 0:06:07.324 --> 0:06:09.404 but that's the first thing I thought about. I was like, wow, 0:06:09.524 --> 0:06:13.404 this is like a very mobby type of thing. And 0:06:13.444 --> 0:06:17.804 then it also reminded me, do you remember back this 0:06:18.084 --> 0:06:22.084 summer or maybe even earlier, and we mentioned it, I 0:06:22.084 --> 0:06:24.924 think briefly on the show there was a probe in 0:06:25.004 --> 0:06:27.884 Las Vegas, which you know, when you think mom and 0:06:27.964 --> 0:06:30.964 no show jobs, Vegas, Vegas is certainly a top of 0:06:30.964 --> 0:06:35.044 mind as well when the Aces were getting one hundred 0:06:35.044 --> 0:06:39.604 thousand dollars sponsorships from the Las Vegas Convention and Visitors Authority. 0:06:40.244 --> 0:06:42.044 I think we talked about that right to try to 0:06:42.204 --> 0:06:47.164 get around those salary caps. So it seems like this 0:06:47.244 --> 0:06:51.604 is a tactic that's been gaining steam, and so to me, 0:06:52.044 --> 0:06:56.764 it's just very interesting if we talk about it from 0:06:56.884 --> 0:07:00.604 kind of a risky business game theory angle, is this 0:07:00.804 --> 0:07:08.044 the natural devolution of evolution, devolution of salary caps and 0:07:08.124 --> 0:07:10.884 of trying to curve some sort of behavior where people 0:07:10.964 --> 0:07:13.684 end up going around it, right and trying to figure out, well, 0:07:13.684 --> 0:07:15.724 I still really want this player, or I really want 0:07:15.764 --> 0:07:17.844 this person to come, you know, to the Clippers. I 0:07:17.884 --> 0:07:19.884 really want this person on the Aces. Whatever it is, 0:07:19.924 --> 0:07:23.244 So let's figure out how we make it happen and 0:07:23.724 --> 0:07:27.084 try not to run a foul of the letter of 0:07:27.124 --> 0:07:30.604 the law while just totally disregarding the spirit of the law. 0:07:30.804 --> 0:07:33.604 Well, accept it clearly violates. I mean, you know, the 0:07:33.684 --> 0:07:37.964 NBA Constitution is not the US Constitution, but like the 0:07:38.084 --> 0:07:41.084 NBA Constitution says that, like. 0:07:42.084 --> 0:07:44.284 Yeah, I know nothing about this, so please tell me 0:07:44.324 --> 0:07:45.084 what is what it's there? 0:07:45.084 --> 0:07:48.124 Are quite a lot of provisions that pertain to the 0:07:48.124 --> 0:07:51.364 anticipation of this type of activity. Right, if you've watched 0:07:51.364 --> 0:07:54.724 the Problatory Show, he has thousands of pages of documents 0:07:54.724 --> 0:07:56.684 printed out, and it gave me flashback to when I 0:07:56.764 --> 0:08:00.524 was on debate team going to copy shit at Kinko's 0:08:01.084 --> 0:08:04.484 late at night. But like, you know, but. 0:08:04.404 --> 0:08:05.444 The good old Kinkos. 0:08:05.604 --> 0:08:11.324 The consution basically says that, like, we can rely on 0:08:11.404 --> 0:08:16.404 sufficiently compelling circumstantial evidence if there is, I think it 0:08:16.484 --> 0:08:18.924 might actually use the term circumstantial, because it's not a 0:08:19.004 --> 0:08:21.884 legal standard, right, And you know, if there is no 0:08:22.044 --> 0:08:25.164 rational explanation for what happened apart from the fact that 0:08:25.204 --> 0:08:28.204 it was cap circumvention, right, there's like no rational explanation 0:08:29.324 --> 0:08:33.324 that I've seen offered. Well, let me take that back slightly, right, 0:08:34.724 --> 0:08:37.684 you know, there's not really a rational reason for the 0:08:37.764 --> 0:08:41.364 value produced to aspiration to pay Kawi million twenty eight 0:08:41.364 --> 0:08:43.844 million dollars or four years and twenty million dollars in 0:08:43.844 --> 0:08:46.404 equity to do nothing. Right. I'm sure he's a smart guy. 0:08:46.724 --> 0:08:48.644 I don't think he was like providing good advice to 0:08:48.684 --> 0:08:50.804 the board or anything either. And if he was on 0:08:50.844 --> 0:08:53.124 the board, you know, not a very successful venture by 0:08:53.604 --> 0:08:58.604 by Kawhi right now, that however, goes to an arbitrator. Right, 0:08:58.644 --> 0:09:00.644 so the league is going to have its findings. They 0:09:00.724 --> 0:09:04.444 hired some three or four name white Shoe law firm. 0:09:05.124 --> 0:09:07.444 They will come back with a report, not anytime soon, 0:09:08.004 --> 0:09:10.884 by the way, probably in six months, if not longer. 0:09:11.004 --> 0:09:12.164 And then it goes to arbitration. 0:09:13.004 --> 0:09:15.604 And by the way, and what happens in the meantime 0:09:16.684 --> 0:09:21.844 while it's being deliberated and arbitrated? Are there any consequences? 0:09:21.844 --> 0:09:24.724 Are there any suspensions? Is there anything like that? Or 0:09:24.764 --> 0:09:26.884 does life just go on as usual while all of 0:09:26.884 --> 0:09:27.604 this is happening. 0:09:27.724 --> 0:09:29.724 Well, the Clippers are a team that is kind of 0:09:29.724 --> 0:09:32.284 at a crossroads, right. They were pretty good last year, 0:09:32.564 --> 0:09:35.004 lost in seven games to the Denver Nuggets, who were 0:09:35.044 --> 0:09:38.484 a better team. But like, but they're in the upper 0:09:38.524 --> 0:09:41.244 half of NBA teams. They're also older, spent a lot 0:09:41.244 --> 0:09:45.444 of money this year on veteran players, right, don't have 0:09:45.524 --> 0:09:48.044 that many draft picks going forward, but like, you know, 0:09:48.884 --> 0:09:52.364 one punishment. So Joe Smith was a Minnesota Timberwolves player 0:09:53.204 --> 0:09:55.684 back in the day that the team had a sweetheart 0:09:55.684 --> 0:09:58.644 deal with to say, hey, look, we can only afford 0:09:58.684 --> 0:10:00.044 to give you this much now, but we'll take care 0:10:00.084 --> 0:10:03.844 of you on the back end. Right, And this somehow 0:10:03.884 --> 0:10:06.164 came out I think in like where there was vankrupcy 0:10:06.244 --> 0:10:07.524 proceedings or so like. By the way, a lot of 0:10:07.524 --> 0:10:09.484 the stuff that comes out it comes out because so 0:10:09.484 --> 0:10:11.844 many fucks up in there's discovery and a lot of 0:10:11.884 --> 0:10:13.924 things were like you get in legal trouble all of sudden, 0:10:13.924 --> 0:10:15.564 the things said no one ever believed me be public 0:10:15.804 --> 0:10:20.924 become public. But the Timberwolves were fined five draft picks, 0:10:20.964 --> 0:10:23.724 people were suspended, ownership were suspended for like a year. Right. 0:10:24.084 --> 0:10:26.564 The Clippers barely even have five draft picks. But if 0:10:26.604 --> 0:10:29.044 I were them, I would fucking trade my draft picks 0:10:29.404 --> 0:10:34.724 before I still could you want to take my draft picks? Sorry, 0:10:35.004 --> 0:10:37.564 we don't have them anymore. We traded them for player talent. 0:10:40.404 --> 0:10:43.124 So so thinking ahead in this game, if you think 0:10:43.164 --> 0:10:46.764 you're gonna get fined and you're gonna be putalized, that 0:10:46.804 --> 0:10:48.044 would definitely be the thing to do. 0:10:52.284 --> 0:10:53.644 And we'll be back right after this. 0:11:01.884 --> 0:11:04.284 The funny thing is, you know, in the case of 0:11:04.404 --> 0:11:07.684 the Aces, like, there's a good case to be made 0:11:07.924 --> 0:11:10.524 that there was good reason for the Las Vegas convention 0:11:10.684 --> 0:11:14.004 and visitors authority to give them to give them money 0:11:14.084 --> 0:11:17.524 because they're bringing people to Vegas, right, and they're bringing visitors, 0:11:17.724 --> 0:11:22.084 and it's actually something that's mutually beneficial. And as you say, Nate, 0:11:22.244 --> 0:11:25.604 like the dude could have tweeted once or made one 0:11:25.684 --> 0:11:28.324 statement that went out to a few hundred people to 0:11:28.524 --> 0:11:32.044 at least pretend. I think even on the Sopranos, the 0:11:32.124 --> 0:11:35.804 No show guys sometimes came to work to just wave 0:11:35.924 --> 0:11:38.804 and say, hey, yes here I am just to make 0:11:38.964 --> 0:11:42.724 big a show of it, and here we had none 0:11:42.764 --> 0:11:45.844 of that. Right. I think rules exist for a reason 0:11:45.884 --> 0:11:49.804 and people should face the consequences if they if they 0:11:49.884 --> 0:11:53.924 try to do something underhanded. What do we think is 0:11:54.084 --> 0:11:58.724 the probability of the Clippers actually getting fined in a 0:11:58.804 --> 0:12:01.564 significant way, in a way that's not a risk slap, 0:12:01.644 --> 0:12:04.844 but something that is actually deter deter's future behavior like 0:12:04.924 --> 0:12:07.084 this on the part of the Clippers and other teams. 0:12:07.404 --> 0:12:12.124 Yeah, let me say I would give of an eighty 0:12:12.164 --> 0:12:15.364 to ninety percent probability that the Clippers, that's somebody with 0:12:15.444 --> 0:12:20.084 the Clippers, maybe not Steve Balmer. Maybe Seve Balmer didn't 0:12:20.124 --> 0:12:23.324 know that much. Right, My basim prior, is an eighty 0:12:23.444 --> 0:12:26.644 nine percent chance that like this was intended by somebody 0:12:26.644 --> 0:12:29.364 who works at Los Angeles Clippers working with someone or 0:12:29.444 --> 0:12:32.644 some things who are working for Aspiration to circument the 0:12:32.684 --> 0:12:37.244 salary cap. Right that might include snaries where Kawai himself 0:12:37.284 --> 0:12:39.684 doesn't know about it. You know, he was known, his 0:12:39.884 --> 0:12:42.844 representation was known to be asking around for all types 0:12:42.844 --> 0:12:45.684 of things that are against the league charter, that are 0:12:45.924 --> 0:12:49.284 way outside the lines, right, so you know they have 0:12:49.364 --> 0:12:51.724 been investigated for that before, you know. I think the 0:12:51.804 --> 0:12:54.524 true chance that, like you know, the other explanations would 0:12:54.524 --> 0:12:58.724 be like maybe somehow that if you give money to 0:13:00.604 --> 0:13:05.084 Kawhi that's kind of just transferred to somebody else, then 0:13:05.284 --> 0:13:07.484 you get money on your balance sheet, and having money 0:13:07.484 --> 0:13:09.764 in your balance sheet makes a financial statement look better 0:13:09.804 --> 0:13:12.644 if you're getting other investors. Right, So, ironically, because this 0:13:12.724 --> 0:13:17.564 company was allegedly so shady, I just want to use 0:13:17.604 --> 0:13:21.564 allegedly because they're so sketchy, we're drawing to a gut shot. 0:13:21.684 --> 0:13:27.084 I think right now, will the NBA want to pursue 0:13:27.844 --> 0:13:32.684 a death penalty five draft pick type of situation? Right? 0:13:32.764 --> 0:13:35.764 Like that's kind of more of a political question, you know. 0:13:35.764 --> 0:13:39.844 I think the league constitution gives the commissioner, Adam Silver, 0:13:39.964 --> 0:13:42.924 in a relation a fair amount of wiggle broom. 0:13:43.044 --> 0:13:43.164 Right. 0:13:43.284 --> 0:13:45.124 The other owners aren't happy about this, in part because, 0:13:45.164 --> 0:13:46.684 like the Clippers, already you spend as much money as 0:13:46.724 --> 0:13:48.324 end up in the league. They built one of the 0:13:48.364 --> 0:13:51.964 most expensive basketball areci Intuit dome ever built. And people 0:13:51.964 --> 0:13:54.364 are already concerned about this, right, and so like they 0:13:54.484 --> 0:13:57.884 might want punishment, but like, there are actually three things 0:13:58.004 --> 0:14:02.084 the league could do. Adam Silver could say, uh, we 0:14:02.524 --> 0:14:07.084 have found that we believe that, you know, salary cap 0:14:07.204 --> 0:14:09.284 tri convention was committed, and now we're going to go 0:14:09.284 --> 0:14:11.124 to arbitration for a bruling. 0:14:11.364 --> 0:14:11.524 Right. 0:14:12.204 --> 0:14:17.924 They could say this does not meet our threshold for punishment. 0:14:18.004 --> 0:14:20.644 It was bad, does not mean a definition of capture 0:14:20.684 --> 0:14:23.324 convention beyond an extent to which we can prove. We're 0:14:23.324 --> 0:14:26.884 going to take away second round draft pick and find 0:14:27.004 --> 0:14:29.964 Steve Balmer five million dollars, which to him is like 0:14:30.284 --> 0:14:32.164 a parking ticket kind of literally if you do the 0:14:32.204 --> 0:14:36.404 math right, yeah, and call it a day. Right. And 0:14:36.444 --> 0:14:38.444 then the third snary is like a plea bargain where 0:14:38.484 --> 0:14:39.964 they said we don't want to take to arbitration, we 0:14:39.964 --> 0:14:42.284 want us to last another two years. Right, So we 0:14:42.404 --> 0:14:46.484 think we could get three draft picks and avoiding Kawhai's 0:14:46.484 --> 0:14:51.684 contract and suspending Steve Balmer for a year, but instead sorry, Steve, 0:14:52.124 --> 0:14:56.164 six month suspension, two draft picks, maybe one of which 0:14:56.204 --> 0:14:58.884 you can get back for good behavior, the largest fines 0:14:58.884 --> 0:15:00.804 because you'll pay the money. That's good for both of us, 0:15:00.804 --> 0:15:02.724 because you don't care about the money, and the other 0:15:02.764 --> 0:15:05.804 owners we pacified. Right, Like if I to if I 0:15:06.044 --> 0:15:09.964 to guess right, I'd say that like twenty per chance 0:15:10.604 --> 0:15:15.564 slap on the wrists forty percent chance, plea bargain forty 0:15:15.604 --> 0:15:18.684 percent chance that the league wants to come down pretty 0:15:18.684 --> 0:15:21.484 hard and it goes to arbitration conditional on that eighty 0:15:21.484 --> 0:15:24.164 percent chance the arbitrators agree. So the odds of like 0:15:26.404 --> 0:15:29.244 the nuclear option happening, I think are lower than the 0:15:29.284 --> 0:15:32.244 odds of something happening, which in turn now lower than 0:15:32.564 --> 0:15:35.724 something actually happened having happened, because like you know, if 0:15:35.764 --> 0:15:39.084 it's borderline, then I think you're get to slap on 0:15:39.084 --> 0:15:39.764 the risk territory. 0:15:39.924 --> 0:15:45.124 Yeah, And I think that the the other part of 0:15:45.204 --> 0:15:50.524 this is what do they want, Like, if they're looking 0:15:50.604 --> 0:15:52.924 in the future, right, what do they want to see 0:15:53.044 --> 0:15:58.164 happen because all of those different scenarios reward. You know, 0:15:58.244 --> 0:16:01.324 we talk a lot on the show about how game 0:16:01.404 --> 0:16:05.084 theory is all about, you know, incentivizing different types of behaviors, right, 0:16:05.164 --> 0:16:08.604 and that happens both with rewards and with punishments. And 0:16:08.804 --> 0:16:13.404 so the three scenarios that you've laid out spell out 0:16:13.764 --> 0:16:19.604 very different kind of futures that the league might might 0:16:19.724 --> 0:16:22.924 see and might be signaling that they want to see. Right, 0:16:22.964 --> 0:16:24.724 Because if you get like a slap on the wrist, 0:16:24.804 --> 0:16:27.644 they're saying, we don't actually care that much about this 0:16:27.804 --> 0:16:29.844 kind of stuff. Keep on doing it. 0:16:30.524 --> 0:16:33.124 And this is why like you or I right, who 0:16:33.284 --> 0:16:39.364 play competitive games or follow competitive sports, right, we have 0:16:39.404 --> 0:16:43.844 a very efficient market. Right. If you do not enforce 0:16:43.964 --> 0:16:48.324 your rules, I guarantee you that there's not going to 0:16:48.364 --> 0:16:50.524 be some gentlemen's agreement not to highlight them that you 0:16:50.644 --> 0:16:53.564 will have. You know, you will have a bigger problem, right, 0:16:54.564 --> 0:16:57.764 It's just fucking it's guaranteed. That's how an equilibrium works 0:16:57.804 --> 0:17:00.044 in an efficient market in the NBA is a regional 0:17:00.044 --> 0:17:03.484 approximation of an efficient market run by players that are 0:17:03.604 --> 0:17:06.644 very smart and agents that are very smart, and owners 0:17:06.724 --> 0:17:08.284 that will talk about their intelligence in the moment, but 0:17:08.364 --> 0:17:12.364 certainly owners who are very, very competitive and accomplished and 0:17:12.764 --> 0:17:15.884 have the financial means of social connections to accomplish what 0:17:15.964 --> 0:17:19.244 they want the large majority of the time. And I 0:17:19.524 --> 0:17:22.324 think Adam Silver is smart enough to know that, right. 0:17:22.404 --> 0:17:25.084 I mean, like the other defense I've heard prominently by 0:17:26.004 --> 0:17:30.844 by Mark Cuban, former Dallas Mavericks owner, another smart, accomplished guy, 0:17:30.924 --> 0:17:34.084 has been a big defender of Balmer. His defense is 0:17:34.164 --> 0:17:38.404 Steve Balmer couldn't do something this stupid, to which I say, 0:17:38.404 --> 0:17:42.364 have you ever fucking met a billionaire before? Like the 0:17:42.444 --> 0:17:44.724 billionaire I haven't met Elon Musk, right, who was until 0:17:44.724 --> 0:17:46.324 recently advising the President of the United States. And I 0:17:46.364 --> 0:17:49.124 think I have a high opinion about some aspects of 0:17:49.204 --> 0:17:51.564 Elon Musk, but like, but you know, I also have 0:17:51.604 --> 0:17:53.404 the opinion that Elon Musk would be one example of 0:17:53.444 --> 0:17:57.724 how billionaires can can believe in wrong and things and 0:17:57.924 --> 0:18:00.924 be sloppy and be very arrogant, and like I think 0:18:01.044 --> 0:18:04.004 arguably also like you know, maybe it's like rational for 0:18:04.244 --> 0:18:07.444 him to say, Okay, we didn't expect this company to 0:18:07.804 --> 0:18:11.564 be fraudulent and to have all this discovery that uncover 0:18:11.724 --> 0:18:16.644 these under the table relationships, and Okay, we know what's 0:18:16.644 --> 0:18:18.204 the worst case. You're not going to take away the team. 0:18:18.404 --> 0:18:19.804 They're not gonna take away the team. So maybe you 0:18:19.884 --> 0:18:22.884 have a twenty percent chance of discovery times a fifty 0:18:22.884 --> 0:18:26.684 percent chance conditionally that you get punished for it, right, 0:18:26.804 --> 0:18:29.364 so like a ten percent chance you get suspended for 0:18:29.404 --> 0:18:31.564 a year. And yeah, there's some draft picks. The Clippers 0:18:31.564 --> 0:18:33.444 are pretty fucked anyway, right, you know, when you don't 0:18:33.484 --> 0:18:35.644 have many of good draft picks, removing the remaining few, 0:18:35.724 --> 0:18:37.204 I mean, he can just sell them and go buy 0:18:37.724 --> 0:18:41.524 a soccer team or WNBA team or whatever else. Right, 0:18:41.924 --> 0:18:45.444 So it might be quite rational even given the possibility, 0:18:45.484 --> 0:18:47.964 but not the certainty of this harsh punishment. I mean, 0:18:48.044 --> 0:18:51.364 isn't all the literature that like, it's the certainty of punishment, 0:18:51.444 --> 0:18:53.764 not the severity that actually deters crime. Maybe it's yeah, 0:18:53.884 --> 0:18:54.964 maybe it's actually wrong. 0:18:54.804 --> 0:18:58.364 And it's both, it's both, but the certainty is definitely 0:18:58.724 --> 0:19:01.804 quite important. And I think, I mean, the hilarious thing 0:19:01.884 --> 0:19:04.564 of the calculus that you've just laid out is it's 0:19:04.604 --> 0:19:07.884 one of these like ah shit, Like I didn't realize 0:19:07.924 --> 0:19:10.564 that microoked dealings would come out because the company that 0:19:10.604 --> 0:19:14.444 I'm using it has even bigger crooked dealings. Right, we 0:19:14.804 --> 0:19:17.764 didn't realize that that wasn't part of the calculus. We 0:19:17.844 --> 0:19:21.964 thought the company was more legit, which which is quite amusing, 0:19:22.204 --> 0:19:24.324 Right when you're doing something wrong and it turns out 0:19:24.404 --> 0:19:29.364 that you get punished because the entity that you're partnering 0:19:29.484 --> 0:19:31.964 with did something even more wrong. 0:19:32.004 --> 0:19:35.564 And there are other like Kawhi Leonard always gets hurt 0:19:36.124 --> 0:19:38.844 in the playoffs, right, Like if you removed his salary 0:19:38.884 --> 0:19:41.204 from their books, they might not mind that so much, 0:19:41.244 --> 0:19:43.244 you know what I mean. It's so there's all types 0:19:43.244 --> 0:19:45.604 of perversion centers. And like arguably, if you're not willing 0:19:45.644 --> 0:19:47.684 to like say, see Bomber, you have to sell the team. 0:19:48.124 --> 0:19:50.644 We're moving the team to Seattle, even though he just 0:19:50.644 --> 0:19:52.884 built this new arena, the Lakers can move in there instead. 0:19:53.164 --> 0:19:56.284 How pissed would he be then, right, you know, I 0:19:56.364 --> 0:19:59.284 mean that would create a real deterrent. 0:19:59.404 --> 0:20:04.644 But like yeah, yeah, no, no, people need real to terms. 0:20:04.964 --> 0:20:07.404 I think the NBA understands although Adam Silver is not 0:20:08.244 --> 0:20:11.924 the draconian ruler that former commissioner David Stern was, necessarily 0:20:13.444 --> 0:20:15.124 you know the other thing about billionaires, they could just 0:20:15.164 --> 0:20:22.644 be sloppy, right, they they they delegate to know that, Like, 0:20:23.324 --> 0:20:25.404 you know, this is partly why the League, spartly in 0:20:25.404 --> 0:20:27.524 the constitution says that, like we have to look at 0:20:27.564 --> 0:20:30.084 circumstantial evidence because, like you know, you don't do this 0:20:30.204 --> 0:20:32.884 in an email. You do this in a phone call, 0:20:33.244 --> 0:20:34.684 or better than a phone call, you do it in 0:20:34.724 --> 0:20:39.364 a meeting over coffee at some lemonade at the country club, 0:20:40.884 --> 0:20:43.644 and you have the conversations there, and then you hire 0:20:43.884 --> 0:20:46.804 like a middle man who might have a slightly more 0:20:46.844 --> 0:20:50.724 fingerprints on it, right, or you're kind of informed, you know, 0:20:50.804 --> 0:20:55.724 you tell somebody, hey, do you haven't you don't know 0:20:55.844 --> 0:21:01.524 anybody who could maybe help Kawhi get some sponsorships, right, 0:21:01.604 --> 0:21:03.484 maybe a little step further and say, you know what, 0:21:04.044 --> 0:21:10.204 anything within you know, within the higher end of market value, 0:21:10.404 --> 0:21:12.044 you know what I mean, Like if you instructed somebody 0:21:12.044 --> 0:21:14.524 to do that, they would kind of get the right impression. 0:21:14.564 --> 0:21:17.524 If you're a billionaire caterer, I imagine you're quite good 0:21:17.884 --> 0:21:21.764 like taking the implicit instructions from your billionaire So is 0:21:22.244 --> 0:21:24.524 not to create legal liability for them? 0:21:26.124 --> 0:21:28.484 Yeah, no, I mean I think this is the one 0:21:28.564 --> 0:21:31.204 thing that they did not take from the mob playbook. 0:21:31.204 --> 0:21:33.604 They got the no shows correct. But the one thing 0:21:33.684 --> 0:21:36.084 the mob always knew is that someone is always listening. 0:21:36.164 --> 0:21:38.884 Someone's always watching, right, watch it, watch it, and don't 0:21:38.924 --> 0:21:42.484 leave a paper trail, and never communicate things on you know, 0:21:42.684 --> 0:21:46.084 landlines or things that might be tapped, and try to 0:21:46.204 --> 0:21:49.844 hold meetings while walking outside, you know, et cetera, et cetera, 0:21:49.924 --> 0:21:53.004 et cetera. But I think that billionaires forget that and 0:21:53.124 --> 0:21:55.284 do get sloppy because they think they can afford to 0:21:55.324 --> 0:21:57.804 be And so you do need to have punishments that 0:21:58.044 --> 0:22:01.604 are larger, kind of a magnitude larger, in order to 0:22:01.764 --> 0:22:05.164 deter that kind of behavior. And it's very interesting to 0:22:05.244 --> 0:22:07.044 me to see, yeah, to see this playing out in 0:22:07.164 --> 0:22:10.484 a realm that I know very little about, and it 0:22:10.604 --> 0:22:12.964 turns out that it has all these parallels with realms 0:22:13.004 --> 0:22:16.124 I know a lot about, because billionaire behavior turns out 0:22:16.164 --> 0:22:20.164 to be pretty similar. Across the board. We're thinking, you 0:22:20.284 --> 0:22:22.564 going to get away with shit and skirt the rules, 0:22:22.644 --> 0:22:26.244 and you know what, usually you can. So on that note, Nate, 0:22:26.284 --> 0:22:28.204 do you want to take a break and talk about 0:22:28.244 --> 0:22:30.244 whether New York needs more of them? Do we need 0:22:30.284 --> 0:22:45.804 more millionaires? Do we need more billionaires? In the state. So, Nate, 0:22:46.004 --> 0:22:51.044 there has been a report that recently came out by 0:22:51.524 --> 0:22:57.684 the Citizens' Budget Commission that argues that New York needs 0:22:58.164 --> 0:23:03.004 more millionaires because it's been adding millionaires at a lower 0:23:03.404 --> 0:23:06.804 rate than that of other larger states. And what that 0:23:07.004 --> 0:23:10.764 means is that the state is not getting as much 0:23:11.164 --> 0:23:16.404