This is part one of a two-part episode. The link to the second part will be in the description.
I’m not covering anything new today. In fact, the contents of this episode have been known for several years, but the problem is they haven’t been covered in-depth.
Today I’m going to be talking about the real or apparent conflict of interests that exist with the Klutch Sports Group agency. This directly impacts the fairness and credibility of the National Basketball Association. So everything I talk about today is public knowledge. I don’t have any insider knowledge. This is all just information I’ve gathered from various online resources. But I’ve put it together, and I’m going to present that to you now.
So let’s start with the basics. There is a sports agency that is primarily rooted in representing NBA players called Klutch Sports Group. Klutch represents players from other leagues, but the Origins are in the NBA, and they represent several NBA players.
The CEO of Klutch Sports is Rich Paul. Rich Paul is a very close friend of LeBron James. Rich Paul was selling sports jerseys out of the back of his car when he met LeBron, and LeBron’s influence has been essential to Rich Paul’s current standing and success.
LeBron James is currently a top 15 NBA player who is in the 21st season, in his 21st season in the NBA. So again, the problem is the real or apparent conflict of interest that exists because of LeBron’s ties to Klutch sports, namely that LeBron’s close friend Rich Paul is the CEO of Klutch Sports and Rich Paul is representing the best interests of players other than LeBron James. The implication here is that LeBron James could potentially exert influence through Rich Paul, and with that influence, impact player decisions and movements.
And let’s start off with the fact that this would likely constitute a technical violation of the NBA bylaws. Looking at Article 35, misconduct. It reads, any player who directly or indirectly entices, induces, persuades, or attempts to entice, induce, or persuade any player, coach, trainer, general manager, or any other player who is under contract to any other member of the association to enter into negotiations for or relating to his services, or negotiates or contracts for such services, shall, on being charged with tampering, be given an opportunity to answer such charges?
And the article continues, but I’ll stop it there. And there’s one more excerpt that I want to bring to light, and it’s from the NBA Collective bargaining Agreement, Section 36.3, Prohibition on players as agents for purposes of negotiating the terms of a uniform player contract or otherwise dealing with a team over any matter.
Players are prohibited from representing other current or prospective NBA players as an agent certified under the Players Association’s regulations governing player agents or holding an equity interest or position in a business entity that represents other current or prospective NBA players as an agent certified under the Players Associations Regulations governing player agents.
These two sections are highly relevant here, and at this juncture, there’s two important distinctions I want to address. I’m not making any point about LeBron’s comments on the possibility of playing with Anthony Davis.
And one thing I don’t have in my notes, let me pull it back. Around the time of 2017 2018, there was a major stir in the NBA. The major stir in the NBA was that Anthony Davis was forcing his way out of the New Orleans Pelicans and he might join the Lakers. Going back to my bullet point, I’m not making a point about LeBron’s comments on the possibility of playing with Anthony Davis and that potentially being tampering. We have to separate that. I’m not referring to the potential of any tampering allegations.
I’m also not suggesting that LeBron has a financial stake or an equity stake in Klutch Sports. But, what I am suggesting is that Klutch Sports operates under a conflict of interest, which allows for the potential for LeBron James to influence player movements and transactions.
And going back to the Collective bargaining Agreement section 36.3, it is very clear that the NBA does not want players to be acting as agents in any way, shape or form. And they also don’t want players to hold an equity interest or position in a business entity that represents other current or prospective NBA players.
So now that we have that set, what exactly is a conflict of interest? Let’s make sure we’re on the same page. A conflict of interest is a situation in which an individual or organization is involved in multiple interests, financial or otherwise, and serving one interest could involve working against another. Typically, this relates to situations in which the personal interest of an individual or organization might adversely affect a duty owed to make decisions for the benefit of a third party. And I took this excerpt from the Wikipedia page on conflict of interest.
So going back to Klutch Sports and Rich Paul and the obligation that Klutch Sports has, it’s to act in the best interest of the players that it represents, not LeBron James, but the very fact that LeBron James is close friends with Rich Paul, and LeBron James is who Rich Paul owes much of his success to. There is the potential for a conflict of interest.
And remember, a sports agency is supposed to be acting at the behest of each of its clients and not any particular direction that someone else may want that agency to go in.
So let’s illustrate this point, and in the YouTube description, I will link to a clip where we have, uh. The clip is from ESPN’s The Jump segment, where you have ESPN’s NBA analyst Amin Elhassan, unwittingly implicating LeBron James as the reason why the Celtics are off the Anthony Davis list of potential teams. Let’s take a few quotes from the clip.
He says, I know there’s a reason why Boston would not be on his list. If you remember, a few weeks ago, Danny Ainge had the comment where he compared LeBron James to Donald Trump. And as I said, you’re playing with fire there. You know, you are insulting LeBron James when you say that. Even if you didn’t mean it as insulting, you know he’s going to take it as an insult. You know, his influence on the agency and who they represent. This was Danny Ainge posse gate, right? Phil Jackson said posse, and that’s it. The Knicks were off the LeBron list. Now Danny Ainge said that stuff, and now Boston’s off the list. Off the list for Anthony Davis.
This references another time where I think LeBron was a free agent and possibly considering the Knicks. And then Phil Jackson made comments, and then LeBron wanted nothing to do with the Knicks, which is fine. But in this instance, what Amin Elhassan is suggesting is that LeBron’s influence, and he says it directly. He says, you know, his influence on the agency right there. This is the heart at what I’m getting at. And this is no secret, right. We can find any number of instances where this is talked about or talked around or hinted at. Here I have a clip where we have an ESPN analyst saying directly, you know, his influence on the agency and who they represent.
So at this point, it’s Anthony Davis. And he says, now Danny Ainge said that stuff, and now Boston’s off the list for Anthony Davis. And this is just Amin Elhassan, talking candidly, but for the purposes of this video, he’s making my exact point, which is that LeBron James should not have that influence on the agency, and he should not be directing where players go.
One side note I have here in my papers is that Anthony Davis was actually fined $50,000 by the NBA after Rich Paul, his agent at the time, and I think Rich Paul is still the agent, told ESPN’s Adrian Wojnarowski, that his client, quote, wants to be traded to a team that allows him a chance to win consistently and compete for a championship. Says the NBA’s collective bargaining agreement prohibits players or their agents from publicly requesting trades. So Paul, of Klutch Sports, told ESPN that he had informed the Pelicans that Davis won’t sign an extension and wants a trade. And this caused the NBA to fine Anthony Davis, which I thought was interesting. The NBA spokesman, Mike Bass, told ESPN, that the league had commenced an investigation earlier that morning. And the NBA statement announcing the fine cited comments made by Paul as an intentional effort to undermine the contractual relationship between Davis and the Pelicans.
It’s clear the NBA does not want contracts to be undermined. Of course, we know this happens sometimes, but here we have an instance of outright wrongdoing, and it caused Anthony Davis to be fine. But there were no repercussions for Rich Paul. And I don’t know if that’s because of complexity in the CBA, but it is Rich Paul that made the statement.
And now let’s go on to another topic, which is LeBron James having interest in Klutch Sports. Here we’re dealing with whether or not LeBron James has a financial stake, whether or not he has equity in Klutch Sports. And this is something the NBA reportedly investigated, whether or not James owns shares in the agency, something that’s prohibited by the rules of the NBA. And I can’t find a direct press release, so this doesn’t appear to be official. What I have to go off of is the quotes that were from Brian Windhorst, an NBA reporter, on his then the Basketball Analogy podcast.
And the quote is, LeBron doesn’t have any ownership in Klutch Sports. The NBA investigated it and said LeBron doesn’t have ownership. This is a very key point that I’m about to make. And that point is that here we have an almost addressing of this situation, but not really. It’s looking into LeBron’s ties with Klutch Sports, but it’s shifting the focus on whether or not. Or whether or not LeBron has a financial interest because that is explicitly outlawed in the. I think it’s the CBA, but it might be the NBA’s bylaws, but either way, that’s not permitted. The focus here is on whether he has a financial interest, but that’s not the concern of most. The concern of most is whether he exerts influence over how the agency acts on behalf of its clients.
So, curiously, the episode from which this quote is from is no longer available, and the podcast is now called the Hoop Collective. Windhorst provides a lot of candid thoughts. He’s covered LeBron for, I think, over a decade now. It might be decades, but Windhorst is very knowledgeable about LeBron and how he acts and the way he goes about things. And Windhorst called it, quote, unquote, laughable. To think that LeBron would be trying to get a cut of agent commissions, which, by the way, can be no more than 4% of a contract. And he went on to explain that Klutch Sports does not present James certain deals worth between 5 million to $10 million. So this was really something I came across casually. I didn’t even know that this explanation exists, but pay attention to what I just said. Went on. Brian Windhorst went on to explain that Klutch Sports does not present James certain deals worth between 5 million and $10 million. Why is LeBron James being presented deals? Is this true? This is something to pay attention to, right? This is getting, again, back to where we started. Is there a conflict of interest present? And this is worth following up on, to see.
But again, these people, Amin El Hassan, Brian Windhorst, they’re talking candidly. They’re not even working under the presumption that they’re saying anything that isn’t to be spoken out loud. This is just talking about what goes on. And it’s apparent from this comment that there’s something going on. Brian Windhorst, as the article goes on, went on to explain that Klutch Sports does not present James certain deals worth between 5 million and $10 million.
And then we have another quote, and this is from LeBron’s side. It’s from LeBron’s advisor. He’s been referred to as a PR advisor. He’s been referred to as a media advisor. This is Adam Mendelsohn. And Adam says LeBron does not and cannot have any ownership in Klutch. He refers to Klutch as us because Klutch is his family. It’s a dumb rumor, and while it doesn’t bother rich, I don’t think anyone paying attention is confused about why his detractors say it. Okay, so, again, this is getting back into, really, this point that nobody was making to begin with. It’s the focus, again, the focus is in on this financial interest. I don’t think anybody really thinks LeBron is that concerned with potentially getting a few more extra million dollars from Klutch Sports when he really, if you think about it, where his motives would be potentially is where he can gain power and influence and start to really exert control. One thing here that was casually mentioned.
Again, I’m just finding this, on different publicly available articles, and this one was actually from Bleacher Report, which Bleacher Report is very light. when you’re looking at potential wrongdoing, they’ve been very light in their coverage. But, it says, LeBron refers to Klutch as us. Does that sound like a situation where we have a distinct player and agency relationship that are completely isolated? He’s referring to Klutch as us. And that’s from LeBron’s media and or PR advisor.