One problem with scams is they are very profitable. And if a scam isn’t stopped early on, it can become a force in the marketplace. Behind me is a graph, and we have the start of a scam. And then, as the scam is perpetrated, it experiences a high rate of growth. And this is because scams are profitable. And as the scam continues on, it is met with resistance. Now, these initial bands of resistance are on the lighter side. So think of bad reviews, negative comments on social media and customer complaints, etc. But as the scam affects more and m more people, the bands of resistance grow larger and larger until we get to this very large band of resistance that may include negative mainstream media coverage, class action lawsuits, and potential scrutiny from regulatory agencies. But if the scam can move past this large band of resistance, it can move into the seemingly legitimate side of this graph. And that’s what a scam ultimately wants to do. If it grows to really make money, the scam has to become seemingly legitimate. So that’s where the scam wants to be.

But now, let’s define what exactly a scam is. Per Merriam Webster’s dictionary, a scam is a fraudulent or deceptive act or operation. And, of course, there are many different types of scams. Some I have listed on the whiteboard include pyramid schemes, ponzi schemes, products or services with false claims, products or services with deceptive claims, investment scams, companies with unethical business practices. And sometimes scams may include multilevel marketing schemes. And note that multilevel marketing schemes are technically legal. But we know a number of scams have arisen from MLMs, also with unethical business practices. One, example is if we have a product with a money back guarantee, customer is unsatisfied, they seek out the money back guarantee, and they are not given their money back. That would be a scam. and then note that the difference between a pyramid scheme and an MLM is that with a pyramid scheme, the focus is on recruitment. With an MLM, the focus is on selling a product or service. Also, I want to differentiate scams from ripoffs. So ripoffs are really bad values, and the line between a ripoff and a scam can be blurred. But I want to give you an example of a rip off. So, a ripoff could be, a guru’s real estate seminar that costs $12,000 to attend. And then you attend the seminar, and all it really is is general information and hype, and then they are selling you on the next more expensive seminar, that would be more considered a rip off than a scam. But again, the lines can be blurred. But I, wanted to make that distinction.

Okay, so now let’s talk about some commonalities amongst scams. And it’s going to depend on the type of scam. But some of the commonalities include, that the scam is something new. So it’s something new, it’s something different. It may be some new type of technology, it may be some different way to do an existing thing or existing service, et cetera. But the key here is we have something new. It’s often labeled as incredible, unbelievable, unreal, innovative, any number of superlatives. What we also see is the word opportunity used. And so opportunity is going to come about with investment schemes. It’s going to come about with participation schemes. You will be given the opportunity to do something. So the word opportunity is weaponized because opportunity is thought of as a good thing. But here we have an opportunity to be a part of a scam, to invest into a scam, to buy into a scam, etc. What, is common amongst all scams is that they are unstable. And this is because there is no foundation of value. So they are a scam. There is no value here. So it will always lead to instability.

another common trait is that the close of the scam will always be hurried. So when I say close, the push to sell you, the push for you to make an investment, the push for you to commit to sign a contract, et cetera, it will always be faster paced. It will always be rushed. There will be a Hurry. And this is because the perpetrators of the scam want you to make a fast decision, an emotional decision, where you go with all of the momentum that they are surrounding you with. So that will be very important. And that is common amongst almost all of the scams. All right, so, moving on.

some more common characteristics here. And this is more in the perpetration of the scam or more of the feel of the exam. And one of the ways that a scam will come across as inorganic or inauthentic or disingenuous, this is because they cannot be genuine about what they are selling. Because if they were, then you would know it’s a scam. You will also experience a diverted focus. And, when I say diverted focus, the perpetrators of a scam know that there are certain things that their audience, their prospects have in mind. Namely, they want to know what it is that they are buying into. So, because it is a scam. They will not tell you outright that it is a scam. They will not address the fundamentals. What they will do is they will tell you what it does. And so this may come in another form, but the key here is that scam perpetrators always want to transition away from the actual fundamentals and to something else that is adjacent, related, but doesn’t actually get to the merits of their investment, product, or service, etc. They will also address the bad reviews. And what they will do is they will dismiss the bad reviews. They will say that the person leaving the review didn’t understand, didn’t give them a chance. It was a competitor, it was a hater, they were jealous, et cetera. So they won’t get upset about the bad reviews. They will try to downplay them and dismiss them. That’s what will happen here. And then you will also see, commonly, a focus in on positivity. Why the focus in on positivity? Because scams are not positive. So they will do something like, say, this is a negative free zone, or we are only focused on positive people. We only want to focus on the optimistic side, et cetera. That is because they can lose the discussion that their product, service, investment, et cetera, is a scam. That way they can leave that talk elsewhere, because that is negative talk. That’s because a scam is negative. People lose money, they lose time, they damage relationships. These are all negative things. And that’s why you see a focus on the positive, because we’ve got to keep everything positive, because if you found out what it is we are actually doing, it would be quite negative. So there is always a focus on the positive. And of course, many people actually embrace this because they want to have a positive life. They want to have positive things in their life. They like an optimistic point of view, et cetera. So many people go along with this, but it’s to their detriment, because in this case, they are misaligned with reality, and they do not understand the fundamentals of the scam.

Okay, so scams always want to come across as credible. They seek out credibility desperately because this is what they do not have. So what are some of the ways that scams seek out credibility? Well, it can come through endorsements. So celebrity and athlete endorsements, entertainer endorsements. They also seek to have ties with authorities. So it could be doctors, attorneys, or some other kind of professionals or experts. they may seek out associations. So association with associations or institutions. They want ties to all of these entities that already have established credibility and notoriety. Because they need that credibility to really put a seal of approval on their scams. You will also see the scams take up, philanthropy and social causes. And this is because they want a feel good appearance. They want a feel good aura about their product, service, brand, company. And by engaging in philanthropy, it will have a better feel to what they are doing. And it’s more likely that people will go along with their cause, and people will think, well, if you’re donating $1 million to this charity, you have to be doing something right, but it’s really just a cost of doing business. Let’s say the scam is making $350,000,000 a year. They don’t mind donating a few million dollars to make their scam appear seemingly legitimate. There may also be awards. So the scam could be giving out the awards. They may be receiving the awards. The awards may be made up. It may be given by a council that was completely created by the scam itself. And again, that goes back to the inorganic part that I mentioned previously. Also, marketing is a big part of scams. It’s so important for them to market and market the right way, because they need people to believe that they are the real deal, that they are legitimate even when they are not. And so there are any number of ways that they confuse the issue with marketing. But one really deceptive and tricky one is when they start to partner or engage with media outlets, especially trusted media outlets. And there is an agreement where the media outlet will cover the scam. Let’s say it’s the product, and they will seemingly address it, both the positive, the pros and the cons of the product. But ultimately, it will be wrapped up favorably for the scam so that the scam can continue on. Of course, the media is influenced, and they are compromised because they are receiving compensation by the product to promote it. So that’s essentially what happens. Other times, this will be an open, sponsored editorial, etc. But the key here is that there is marketing in place. They want to have advertisements. They want to be a household name as much as possible, recognized and known as much as possible, because the more they are known, the more people think this is too big to actually be a scam. Also, you will see affiliates, and referral partners become a part of the scam. And that’s really crucial here, because you have all of these different people that are seemingly promoting the product. but again, it will be inorganic, just as the reviews and testimonials will be. If you examine the reviews and testimonials they will almost always come from people who are participating in the scam or who are being compensated directly or indirectly by the scam. So, for example, if we just look to, let’s say, a doctor endorsement, did the doctor receive compensation for endorsing the product? The answer is going to be almost always yes. And this is, again, because these are all campaigns, these are marketing campaigns to make the product, service, investment, business, company, et cetera, appear to be legitimate.

So as we continue on, ultimately, we keep building upon this fraud foundation, right? So we have all of these different things on top of the foundation to make it look nice. Think about a home. When you’re building a home, you can have a really nice looking home. But if the foundation is cracked, it will always have problems. So what they are doing is they are making the appearance of the home look very nice with all of these different things. And we’re borrowing credibility from all of these people. Why would this very famous celebrity endorse our product if it was a scam, et cetera? So they build upon this foundation. But where the scam can start to turn a corner is where they keep generating profits. And if they get past this large resistance band, if they start taking this money and they start rebuilding and repairing their foundation, they can start to turn a corner. And so here we will see the messaging change. Because originally we had these incredible claims, and they were lies and it was a fraud, but we had these incredible, fantastic claims. But then, over time, as the scam seeks to become more and more legitimate, you will notice the messaging change to be smoother and to engage more in puffery. And so puffery is where we’re not making specific claims that we can be tied down to, but it’s really like we’re the best in the universe, or our product is amazing. And other superlatives that have no ties to actual, tangible, evidence of fact. And it’s more just like a, superlative. It’s more just like an amazing claim, but it’s not anything that is rooted into something where we can actually break it down, such as an ingredient list, et cetera. So that’s what will happen, is, over time, the messaging will change, and it will smooth into less fantastic claims so that the scam can become more and more legitimate and move into the seemingly legitimate side of the graph.

And then also, we may see a replacement on some of the scam fundamentals. And so, more and more, the scam will seek to rebuild, or repair their foundation by taking their profits and reinvesting them into this initial scam product or scam investment or scam service, et cetera. And so they are hoping that they can turn the corner and go into seeming legitimacy. And the reason I keep saying seeming is because the foundation usually doesn’t completely repair. And this is very difficult to pull off, because when you have a foundation, it usually stays that way. But because a scheme is so profitable, they may be able to take this profit and use it to repair part of the foundation. And if they can do that again, they can keep moving into this seeming legitimacy. So ultimately, what this comes down to is that scams can become profitable or are profitable. And if they continue to grow, and if they can move past their initial resistance bands, they can move into seeming legitimacy. Once they do that, they have these profits that they can capture. And if they want to continue on, they can take their momentum, they can take their growth. They can take all of the equity that they’ve built from their brand, their notoriety, all of these ties, and they can start to work on all of the problems that they were originally founded upon.

The Russell Wilson trade has turned out horribly for the Denver Broncos, but was it a horrible trade at the time it was made? Let’s look at the information available to the Broncos when the trade occurred, but let’s first start out with the trade itself. On March 8, 2022, ESPN reported that the Denver Broncos traded quarterback Drew Lock, tied in Noah Fant, defensive lineman Shelby Harris along with their 2022 1st round pick, 2023 1st round pick. 2022 2nd round pick, 2023 2nd round pick and 2022 5th round pick to the Seattle Seahawks for Russell Wilson and the Seahawks 2022 4th round pick. Of note is that Russell Wilson had a no trade clause. Reportedly, there were multiple teams interested in acquiring Wilson, but this trade clause effectively limited his market. Now, Wilson still had two years, $51 million left on his existing contract. On September 1, 2022, Wilson signed a five-year extension with the Broncos for $245,000,000, 165,000,000 of which were guaranteed, and this was the third most guaranteed money in NFL history.

Now, for the upcoming season, Russell was 33 years of age. He was entering his 11th NFL season, and notably in November, he turned 34. Now, in the seasons previous, the Broncos were five and eleven in 2020, and then in 2021, their record was seven and ten. So they were a poor team, presumably hoping that the addition of Wilson would turn them into a contender. So when this trade was made, what was Russell Wilson, the player? What were we looking at? So, in 2020, he had statistically his best NFL season. He played in all 16 games. He totaled 4212 passing yards. He had 40 tds, 13 interceptions, a completion percentage of 68.8. He had 513 rushing yards, 83 carries, 6.2 yards per carry, and then two rushing touchdowns. So things looked really good in 2020. But what was concerning was that in 2021, his numbers dropped. He only played in 14 games. His yards went down by over 1000 to 3113 yards. He only had 25 passing tds. His interceptions went down, so that was good. But his completion percentage also went down to 64.8%. His rushing yards plummeted to 183. His carries also nearly halfed to 43, and his yards per carries went down to 4.3. And he maintained two rushing touchdowns. So that’s very concerning, especially given Russell Wilson’s age at the time this is happening. So he was 32 headed into this 2021 season, and then he turned 33. Now, he did have, statistically his best season in 2020 in his career. But like I said, in 2021, we saw those numbers fall off a cliff.

What is of note is that in Russell Wilson’s career, he is ranked currently number three in rushing yards. He will be passed by Lamar Jackson shortly, but he’s currently ranked number three in all-time passing yards. And he’s also ranked number two in all-time rushing attempts. Again, he will be passed by Lamar Jackson. But this is important because Russell Wilson is a running quarterback. And what is of note is that from the years of 27 to 29 rushing declines amongst quarterbacks that are, running quarterbacks, and then from 25 to 33, these are the top production years of quarterbacks. So when are the Broncos acquiring Wilson? Right as he is turning 34 in November. So they’re getting him at the exact worst time that you would not want to get a quarterback. And then there are some quarterbacks that we know of, of course, that produce, elite seasons after the age of 34. But when you look at these quarterbacks, they are all non-runners. And by any metric, Russell Wilson, throughout the course of his career, has been a running quarterback. That is what has helped boost his success. We have seen that he has experienced success passing the ball, but he has definitely been a running quarterback throughout the majority of his career and especially in his most successful years.

So one other point I wanted to make is, again, that 2022, he did have his best statistical season. And here I have his fantasy points, which were 359. And I use this not to say that fantasy points are necessarily indicative of success, but they do help give us a numbers-based, baseline. And then in 2021, we saw his fantasy points go down to 242. So that’s a significant dip. And it’s especially concerning given his age. At the time, his numbers were falling off a cliff. And then, so the Broncos not only take him at this time, but they pay, really an ultra-premium, not only in trading for him, but then they leverage the trade even more by adding a five-year extension. And this is what I find particularly inexplicable, is when he already had two years left on his contract. Why are you extending a quarterback that is turning 34 in November of the trade? So he still has two years, and then the extension kicks in. And so to pay him this third most guaranteed money in NFL history is really hard to justify. And so that’s what I have here. So when you take the draft picks and then you add in the salary, you’re paying an ultra-premium on an uncertain return on value. And so what I’m getting at here is it’s really hard for the value to be returned to the Broncos. The only way is if Russell Wilson continued to just have 2020 seasons over and over and over again. And not only this, we had only seen Russell Wilson in the Pete Carroll system. We had never seen him in, any other system. So it was going to be hard to tell whether he could replicate that success. And that’s something I would have wanted to see before I extended him on this massive five-year extension. So the trade itself is already questionable, but then when you stack in the guaranteed money and the lengthy extension, it was completely unnecessary and never really made any sense. And when you look at the stats, right, Russell Wilson being a running quarterback, Russell Wilson entering his 11th season for his very first season in which he would have played for the Broncos, Russell Wilson already being 33. There were just so many factors that made this a very difficult trade for the Broncos to have any upside to it, for the Broncos to see any of the value returned. So at the time the trade was made, the Broncos a horrible decision.

Had I watched this video at any point before I was 27, it would have completely altered the course of my life. Today, we are talking about preventative insurance by way of consultant. So, let’s define what insurance is. Insurance is something that protects against possible damaging effects of something, and that is, per Cambridge dictionary, of course, that is a general definition. When most of us hear the word insurance, we think of home, auto, and health insurance. But conventional means of insurance are reactionary. They take effect after the bad thing has happened. So, with home insurance, this is after damage has occurred to our home. With auto insurance, this is after a wreck has taken place. With health insurance, this is after we are sick or after we are hurt. And so, with this reactionary insurance, we can’t undo the bad thing that has happened. we also incur the transactional cost of trying to resolve the matter. There may also be legal proceedings. Of course, our time is used throughout the entire process, and we are likely to be insufficiently compensated for our loss.

But the reason why I introduce first, reactionary insurance. The traditional way we think of insurance is to contrast it with preventative insurance and not just limit ourselves to thinking about the traditional categories of home, auto, and health, but to open up insurance to our entire life’s activities and our entire life experience. So, when I talk about preventative insurance, I’m asking you, what about general life activities? And what I’m telling you is, this can apply to anything of significant consequence. So, on the board with me, I have some examples. Whether or not to go to college, deciding which college to go to, entering into a business partnership, the relationships we’re involved with, the line of work we choose, buying a car, entering into business deals, buying a home, the various activities that we’re involved in, anything of significant consequence. We want to prevent bad things from happening. And if bad things do happen, we want to limit the degree to which they happen. And to do so, we can hire a consultant.

And so when I say consultant, this isn’t a coach, this isn’t a mentor, this isn’t a counselor. This is just a consultant. There’s no subscription. There’s no ongoing interaction beyond what you want. It is just, you are renting 1 hour of time from somebody that can help you with your specific situation. Now, with the advancement in artificial intelligence, AI very well may be able to help you with your specific situation. But what’s important to note is that AI’s answers are largely only as good as the prompt you enter. Also, you are going to get sanitized information, just like there is a very large gap between the information, you read in an article you find on Google and the information that you hear when talking to someone on the street. there is going to be a very big gap with AI’s information and that which you would get from talking to a consultant. I also have on here book. This can refer to books, YouTube videos, articles, et cetera. Of course, those can be very helpful, but they take time to extract that information and that knowledge. And also, it’s not particular to our circumstance.

So when we hire a consultant, we have someone who can talk to us directly and apply their information and knowledge directly to our specific circumstance. So what would you want to look for in a consultant? Well, experience in this situation is paramount, and it doesn’t need to be lofty experience. And when I say lofty experience, what I’m really referring to is we don’t need to see credentials. You don’t have to be a c level executive. You don’t have to be anything out of the ordinary. It can just be an employee who makes $20 an hour who can make all of the difference. It’s not the credentials, it’s not necessarily anything else other than that person has information that can help you. and then I also have expertise. So you want to make sure that in whatever you need help with, that person in some way has expertise that you can leverage. And I also have someone on the outside with nothing to gain. It may be a friend or family member, but usually not. It really depends on the situation. If it is a friend or family member, just make sure that they can help you. In certain, circumstances, they will actually work against you. Even though their intentions may be to help, because they have bias, their bias can lead to bad answers.

and so how can a consultant help you? Well, they can tell you what you don’t know. We know there is always something that we don’t know, and a consultant can immediately shore up that gap. A consultant can also be objective and non-attached. So when you have someone who is just an independent third party and doesn’t know you, they really don’t have any bias, and they don’t have any reason to tell you something that you want to hear. So that’s going to be really helpful in getting the real information that you need. And I have on here. A premium is worth it. So even if you have to pay someone $500, if it can save you years of disappointment or years of lingering effects, or hundreds of thousands of dollars, or just a few thousand dollars, it can immediately pay off. and it can also not only protect you against the downside, but you do stand to possibly gain. So you may actually experience a benefit above just protecting you against a bad thing from happening. You also have someone in your corner. So even if you have this detached third party who is completely independent, you’ve never met them before, they’re going to want to see you succeed because you have hired them. Just because you have this transactional relationship, they want their experience to pay off for you. when I’m saying that, I’m thinking of the example of, I had, my friend help me with, buying a car because he had had experience in buying multiple cars and negotiated really good deals. And I brought in. So he wasn’t detached, but he also, in this circumstance, his relationship to me had no bearing. He was in my corner and he wanted me to succeed.

So there are so many benefits to hiring a consultant. One is they are relatively low cost. Another is they can provide you assurance, so confidence in knowing that you are making the right decision, or at least, a decision that is more informed. they also provide a layer of insulation against a bad thing happening. there is what is called layer one and layer two thinking. With. I think it’s layer one, we are reactionary, and with layer two, we are waiting, and we are more logical because we are not reacting emotionally. And with the consultant, you have insulation. Not only do you have a third party, but you have expanded time so that you can better think about what your decision will be or make a better decision. it’s transactional in nature. So this doesn’t need to be an ongoing thing. It is just a one-time transaction. you can easily hire someone to be a consultant and have their ten years of experience distilled down into 1 hour specific to your situation. I can’t overstate how valuable that is. You will save time. As I mentioned before, there can be an asymmetry because you know your downside. Let’s say you pay someone $400 an hour. That is all you can lose, but your upside is all you stand to gain. So you’re not only protecting your downside, you have possible upside. It just depends on what you’re consulting on. But the point is that there is an asymmetry also. It’s at, ah, your option. You don’t have to follow their advice. You don’t have to think that they are right, but you do have a second opinion that is extremely valuable. You can even hire a second consultant so that, you can now even have a more informed decision that can provide you with an additional layer of insurance. It will also help you make an educated decision. And just one detail can make all of the difference. Let’s say you talk to someone for 60 minutes, and for 59 minutes, they only tell you what you already know. But in that last minute, they have that one detail that makes all of the difference. And this one detail can totally cover this cost of the hourly consultation. And again, this is specific to your situation, which is so, so valuable.

So last I have, there’s a home inspection. That’s an example. I have to say that this is one way in which I would use a consultant. And I’m thinking of my dad. My dad has literally built a home and knowing that even if I would get a home inspector, but I would still have my dad as a consultant to look over the work. And that is what I have next is consulting on the consultant. So maybe you already have an, advisor, maybe you have a mentor or a coach. You can have someone look at how they are advising you and tell you whether they are correct or whether they are directing you in the right way. Also, you can get someone with industry knowledge. And so when I’m saying this, I’m thinking of, when my aunt bought windows to have installed in her house, and then they brought the wrong windows and they couldn’t install them. And this was a tremendous expense and it had gone wrong. But had she talked to, reading reviews would have helped. But also, even if she had just talked to an employee of a competitor, just talking to that one person, she could have gained inside industry knowledge. So you have to remember, there is a lot of value just sitting right in front of you. that you may not realize. You could also get help with what car to buy. Let’s say you’re buying a car and you don’t know which car is the best one for your situation. Just think of how many YouTube channels have people that are breaking down these very detailed reviews of all of these different cars. These people could easily help you, find the exact right car for you. and then someone can also just point out red flags. Let’s say you’re dealing with someone and you want to vet them. And so you talk to a consultant and you tell them, here’s what I’m dealing with. Here’s how this person has acted. Here are the decisions they’ve made. Here’s what they’ve told me. Do you detect any red flags here? This can help with all types of relationship.

Going back to one thing I said, here, look for people who have experience, it doesn’t have to be in the way that you think. Just look at, imagine a Reddit forum. If you have a subreddit and you look at someone who is active in that subreddit, and they are dispensing a lot of good information, and you can tell they are knowledgeable, you could message that person or ask for consulting from that person, and that could make all of the difference. So again, it’s not always the people that are, holding themselves out as experts or consultants. Sometimes it’s just the person who has the information that you need. So of course, it’s always going to depend on your circumstance, what you are looking for, consulting for. But the point is that with a consultant, there is so much to gain, both in terms of limiting your downside and then possible exposure to upside. And the last thing I’ll leave you with is this. Just think about a time in your life where you made a bad decision and that went wrong, and then it had lingering effects or significant effects, and it was a bad experience. It may have been preventable. There are some times where you can think back and you can think, if I did have someone who I consulted with just for 1 hour, it could have prevented this whole thing. And that’s really the point here.

When I was a kid, my family used to frequent a very popular Tex-mex restaurant that was known for its fajitas. They were so good, I can still remember them to this day. But as we continued to visit the restaurant, I noticed that the fajitas weren’t quite as good as they used to be. And as the years rolled on, the fajitas continued to get worse and worse. And this decline in quality is actually quite common amongst many products and services. I refer to this as watering down the orange juice.

So let me illustrate what’s happening, starting with this first glass of orange juice I have drawn, and it’s from 2010. An orange juice stand opens up, and the owner has 100% pure orange juice. And everybody loves it. It gets five-star reviews. People will drive 30 minutes just to get this orange juice. It is that good. But then in 2013, the owner decides, well, let me dilute this orange juice by 5% by adding water. And so we get now 95% orange juice and 5% water. And so it’s still really good. Not too many people notice, and all is still, well, maybe a few people have complaints, but generally, everything’s going okay.

But then in 2015, the owner thinks, well, maybe if I just dilute the orange juice another 5%, I can increase profits by that much more and still have good orange juice. And to a large degree, it still works, because the orange juice is still fairly good. It’s not as good as it used to be, but many people don’t notice. And the few people that do, they’ll still get the orange juice because it’s still decent. But this trend continues on into 2024 and nine years later, after the 90% orange juice, we are now down to 70% orange juice. And this latest orange juice no longer resembles the excellent orange juice that we started off with. And so this decline in quality, this degradation in quality, happens all of the time.

And so what are some of the ways it happens? Well, we get worse. Ingredients in our food, the materials that are used to make products are worse. The talent and skill that goes into services lowers. Same with the experience. Whereas before we get more experienced people, now we get less. Let’s say the craftsmanship of a product. Before it was handmade, now it is fabricated. The availability of a service goes down the lifespan of a product. It’s no longer as durable. It doesn’t last as long. This happens so often.

And what makes it especially difficult for consumers is it is hard to know exactly when quality drops. And so what I have on the whiteboard, the first bullet point is we have a dilution of quality of a product or service over time, and it’s nearly imperceptible at first. Some people may notice, but a lot of people don’t. And so again, we go back to the illustration I have on the whiteboard. When the orange juice originally dropped from 100% to 95%, it was still really good. And so many people weren’t aware that the quality had even gone down.

And this is related to, but distinct from shrinkflation. So with shrinkflation, we have a decrease in size. And let’s just say we have a cereal box. And the cereal box goes from 64 oz down to, let’s say, 58. Well, in this case, that’s going to be printed on the box. And people are also going to notice, they’ll likely notice the tangible size of the box. So my point here is that this is more noticeable. Maybe some people overlook it, but it is more noticeable, whereas with product quality, it is very difficult to perceive.

And so there are a number of psychological phenomena in effect that cause people to keep coming back to this product that is now of much worse quality. And let’s start off with the premises effect. And basically here we remember most. Our memory attaches itself to what happened in the beginning. So we have these fond memories and those stick with us. And so they even override sometimes the fact that we know it’s not as good, and maybe sometimes it’s even that. We keep trying, hoping to relive that initial experience.

We also have cognitive dissonance. And this is where we are at a discomfort because we have two conflicting beliefs, or we have a belief and our actions are not matching that belief. So even though we might think, okay, this isn’t as good, let’s say what’s at an 85% orange juice concentration, it’s not as good. But we still keep coming back because we think, well, we can excuse it or we can rationalize it. Maybe it’s just not as good this day. Maybe the people that were working on the orange juice, or they hired new employees. And so we keep coming back even though we know it’s not as good, and we believe we’re at, 85%, or we believe the quality is lower, we have these conflicting beliefs, or our actions don’t match our beliefs because we keep going back and buying the orange juice.

Another psychological phenomenon is confirmation bias. And so this is where we seek out information that confirms that what we want to believe is true. So in the case of this orange juice, maybe we want to continue to believe that it really is this amazing experience that we had back in 2010. And so we keep coming back to it, hoping that it’s going to be this good. And so, with confirmation bias, we are seeking out information to confirm that. Maybe we look for reviews and we select and we focus in on the positive reviews. Maybe we disregard other information that is available to us. But the point is that we are having a hard time getting away from this product.

There is also what is referred to as change blindness. And so this is where we don’t perceive the changes. And so this could be because the change is so gradual that we just don’t notice. It could also be that we’re not paying attention. So in the case of orange juice, who’s sitting there and monitoring the quality of orange juice on a regular basis, let’s say a monthly basis, we have this newsletter that comes out and tells us, well, we’ve tested the quality of the orange juice again, and it’s still at 100% or it’s still at 90%. Even if such a newsletter existed, we probably wouldn’t be reading it. So we just have our attention elsewhere so we don’t notice the changes that are occurring.

And when we get back to some of these initial psychological phenomena that I talked about, the cognitive dissonance and the confirmation bias, this is also contributed to by brand loyalty and brand reputation. So if we’re initially tied to a brand, we believe in it. And let’s say we go back to this orange juice. We love this orange juice, we love the orange juice stand. We have fond memories of it, we are loyal to it. We have bought since the very beginning. We are more likely to stick with that orange juice stand. And that gets to my next point is there’s emotional attachment.

The reason I’m covering this is because it is something that looms so large over society, and yet it’s something that goes relatively unnoticed, at least until we get until this point where our new product, our current product, the current iteration or version of our product, no longer resembles this initial start. And this happens so often, but it’s so sneaky because we are not aware of these quality changes. Sometimes we are, but many times we aren’t.

So, I just wanted to make this video because it’s so important that this watering down the orange juice, that’s happening all across all different products and services, it’s so important to be aware of it, but so few people realize what’s happened until we get to this point where we’re at the 70% orange juice when we started out at 100.

The NBA is experiencing many problems, but let’s focus on just one: load management. Load management is where players are unnecessarily playing reduced minutes or are outright sitting out games. I want to relate what’s happening in the NBA with an economic concept called the tragedy of the commons. With the tragedy of the commons, we have an open or communal resource that is used by a group. But the individuals within that group start to seek to maximize their own self-interest, and in doing so, they exploit the resource. As a result, the group as a whole loses because the resource is depleted, damaged, etc. On the whiteboard with me, I have a drawing of a pond that is surrounded by five landowners. What may happen is we have landowner five starts to draw more water. Landowner four notices this additional withdrawal, and then they start to draw more water until eventually, we get to the point where all landowners are taking as much water as they possibly can until the pond is depleted.

Another version of this is playing out in the NBA. The reason it’s playing out is because players, coaches, team owners, team management has all realized that it’s not in their best interest to maximize effort and wins. Many teams realize, hey, we don’t need to play our star players. We can rest them and maximize our chances at having a good playoff run. This is because the championship has become not just the gold standard but it’s the only standard. If you’re a winning team, you will commonly hear players say that you either win the NBA championship or the season was a failure. That is a really bad precedent to establish, and it has been established. On the other end, for the losing teams, they really want to maximize their chances of winning the lottery or at least winning a high pick. When we have losing teams, they seek to maximize how much they lose so they can increase their percentage odds of getting a higher pick. As a result, because the focus is on only a championship or only a high draft pick, we see players playing fewer minutes and fewer games played. This is because the optimal path isn’t necessarily to win as many games as possible. And the optimal path for the losing teams, maybe not even to win any games at all, maybe to lose as many as possible.

Now, the problem here is that while strategically, this may make sense for each individual team, player, coach, et cetera, it doesn’t work for the business of the NBA. The NBA is in the business of entertainment. What is happening is when fans patronize the NBA, they watch the games, they go to the games. When they start to realize that this product is being diluted, then they start to lose interest. The NBA makes money off of the interest. A lot of players disregard, or a lot of players don’t even know, is that this money that the NBA generates is not there just because the NBA is the NBA. This money is there because the NBA is entertaining to fans. So if the fan dollars, I have here a drawing of a basketball court, we have the fan dollars going in and the NBA revenue going out, and the players receive a share of that revenue. But if the fans start to lose interest and the fan dollars start to go down, ultimately what will happen is the players’ money will go down because there will be less money to disperse amongst the players.

So what is happening right now is the current players and the current teams, what they are doing is they are drawing from the commons. And I have here a rectangle pool of money. And this money recycles. When the NBA is up for new deals, it gets money from these new media deals, and it infuses the pool. But the media deals will be worth less if the NBA continues on this current path, because the fan interest will be less. And why does this happen again? Because teams have realized that the optimal basketball strategy is actually not the optimal strategy for the NBA as a business. And because of this, we have players that are playing fewer minutes and actually sitting out games. And so as a result, or what is happening is we have a misalignment between the fan interest and the team actions. So what needs to happen is these interests need to be better aligned. Because right now, who is being hurt is the NBA as a whole. And then we have the future players, and then we have the NBA brand, and then we have the NBA teams. Because this pool of money is going to decrease if this current trend continues. It has to. It has to. Because when the product is worse, then the fans coming in will pay less. And they will not only pay less, but they will start to lose interest. And that is where the NBA makes money.

So what needs to happen is the NBA needs to incentivize players to play. We now know, it is very clear that the love of basketball is no longer good enough for basketball players to play games. And, we also know that providing every last luxury is not enough. It doesn’t matter how nice the flights are, it doesn’t matter what the meals are, it doesn’t matter what the accommodations are. It’s not been enough. And the NBA players receive the first class of everything, and yet it’s still not enough for them to play more minutes and play games. And so what needs to happen is we need to see a reduction in the amount of guaranteed money in contracts. And what should happen is there should be a much lower percentage base. So that much money you are guaranteed, and then that money increases the more games that are played, the more minutes that are played, et cetera. So if this happens, then we will see a better alignment of interests, and suddenly players will be able to play in back to backs or they’ll be able to play over 35 minutes a game. But as it stands, we can see the trend. I’m not saying this is the case for all NBA teams or all NBA players. Some players genuinely want to play, but even within their own organizations, there may be discord. And so there may be an organization where we have the coach and the GM and upper management, they’re tanking, but the players want to play. The star players want to play, but the coach and GM and the management, they are thinking strategically, and they are thinking, how do we get talent as quickly as possible so that we can be better later?

So we really just have. Ultimately, what this all comes down to is we have a misalignment of interests. And what needs to happen for the NBA to go back to making more money thriving, is that the NBA needs to align these interests. And we’ve seen that the players do not respond to any number of things. And so really all it amounts to is, are gimmicks that, they’re not going to work and they’re never going to fundamentally resolve this misalignment. So what we need to do is we need to take away the guaranteed money. And by doing so, the players and the coaches and the teams are all going to start to come back in line with what the NBA needs.

At UFC 298, Ilia Topuria knocked out Alexander Volkanovski along with my value bet. And I will include a link to the first video in the description. For now, let’s analyze the bet with the benefit of hindsight, starting with the fact that Volk was a slight minus 130 favorite. Ilia was a slight plus 110 underdog. I thought Volk should have been favored by more, and I put him at a -350 which would give him an implied win probability of 77%, not factoring in the house juice.

So what was my reasoning? Why did I think Volk should be favored by so much more? Well, it was basically that Volk is proven. Volk has beat all of the top 145 contenders. He had also nearly beat Islam Mahkachev, who is the dominant 155 champion. And that victory came just about one year and one week ago at, ah, UFC 284. So, with that history, with that background, I didn’t think there was anything that Ilia Topuria was going to bring that Volk hadn’t seen before. And so whereas Volk was proven, we knew his history. Ilia was not really.

There were only two significant matches that Ilia had, and they were against Josh Emmett, who was ranked number five. And this was the fight right before this Volk fight. And then Bryce Mitchell, who was ranked number nine. Now, two things I thought that could have factored into these lowered odds were the head kick that Volk took. So it was a vicious head kick from Islam. it knocked out Volk. And this head kick occurred just 119 days before this fight. So I thought, given the proximity, given the brutal nature, of the head kick, I thought that may have been what was factoring into Volk being only a -130 favorite.

And then, of course, as we know, we only get to win or we get to lose. So there’s a binary outcome. we don’t get to see this fight play out over and over again. It can only happen one time. And as it happened, Ilia Topuria knocked out Volk. And some of the commenters on my first video were saying that this would happen. They were saying, okay, someone brought up the point that, fighters that are 35 and over in title fights are one in 21 in the 170 pound division and under. Someone said that Ilia should have actually had better win probability. And then someone also said, it’s how he looked, not who he fought. And when he fought Josh Emmett and Bryce Mitchell, he did look really, really good.

But again, these two fighters weren’t, they weren’t of the same caliber of fighters that Volk was fighting. So what happened at UFC 298? I thought Ilia was just the better fighter. I thought Ilia was in control of the fight. I thought Volk was constantly off balance, and really importantly, and this is when I knew that Ilia was going to be a much, much tougher fight than, I was expecting, is Alex was constantly in danger, and when you’re constantly in danger, it’s really only a matter of time before you meet that danger. And so Ilia was putting himself in position to knock Volk out, and Volk was, avoiding a lot of damage, but he was really in a bad position many, many times.

And so the odds were against him here also. And this is in part because Ilia was the aggressor, and Volk was on the defensive. Now, Volk was landing some nice leg kicks, and he may have even outpointed Ilia in the first round. But Ilia, to me, he looked in control of the fight, and he looked like the more aggressive fighter. to me, he just had to look. And Volk was, like I said, defensive, off balance. And really what I thought was problematic was he was constantly in danger.

So getting back to my analysis, what happened here was Ilia was the better fighter. And I just didn’t think that would happen. I didn’t think that Ilia was going to come in and be better than all of these other guys that Volk had fought. Now, I’m not saying he’s better than Islam, but I didn’t think he was going to show Volk something that Islam had not. And then, so when we look at some of the rationale why, Volk shouldn’t have been favored by as much, or why he was only favored by, as a -130 favorite. we get to the age part, and so with age at 35, of course, we have this bad record, and we know that as age goes up, physical abilities are going to go down. and that’s going to be a strong correlation, right? Because with age, we get to this certain point, and then we plateau, and then we start going down.

And then someone said that especially with these lighter weight divisions, as you start going down, that speed really starts to matter. And it just takes a fraction of a second to make all of the difference. But the beauty of this fight is it didn’t come down to fractions of, a second. I didn’t see anything where Volk was really at a physical disadvantage. I just thought Ilia was better. I thought his game plan was better. someone said his boxing was tighter, he looked more in control, he looked like he knew where to attack. I just thought he was the better fighter.

So I don’t think this was an age thing, and I don’t think it was. It didn’t look like it was a head kick thing. Some people are saying volt came back too soon. when you’re older, you really don’t have the, luxury of waiting around to heal. But maybe he could have come back a month later. But he did wait about four months and he looked fine. he talked fine. Maybe it did factor in. But again, I didn’t see that he looked like a good fighter, he looked capable, he looked like he knew what was going on. maybe there were some effects. It’s always hard to tell, it’s hard to extract all of these different things.

But when the fight played out, we saw that Ilia was just the better fighter. And I think that’s something where, to me, when I was running down my reasoning for Volk, that’s what it was going to take. It was either going to take, a punch, which Ilia does have, like a ten of ten power. Volk possesses nowhere near the power that Ilia does. So maybe there would be something where Ilia just catches him. And Volk did say he got caught, but he also got caught, but he was also in constantly in a bad position. So when I look back at my analysis and my thinking, I really don’t see I’m okay with what happened. I’m okay with my decision, because, I didn’t think Ilia was going to be the better fighter, because all we had to go by were really this Bryce Mitchell fight and the Josh Emmett fight. He did look good, but he didn’t have the same record as Volk. We hadn’t seen him up against the same caliber of competition.

And I think this is the overriding factor here. I think Ilia being so good is what led to the odds being so close. I think this is why the oddsmakers had him at a near even favorite, is because the oddsmakers knew that Ilia was the real deal. That’s my suspicion. because I think that Ilia came in with a lot of hype. I think he came in with two nice victories, but it was nowhere near, what Alex had accomplished. And when you start stacking in, the head kick, you start, stacking in how soon it was, how recent it was, you start to figure in the age factor, the 35 and over, all of these things combined probably, led to Volk being only a slight favorite. And then when you stack in the insider information, that being people who had watched Ilia and Kamaru Usman said this, he said Ilia is the real deal or something, thereabouts. He said something, close to that. That’s paraphrasing there, but he said that Ilia is really, really good.

And I think ultimately that’s why, he was, ah, a near even matchup with Volk. and so that’s how it played out. I really don’t have, looking back, I like taking the guys that are proven over the guys that are maybes. It’s more like, we know what this guy has done, we know what this guy could do. But I’m not going to base a bet, on what is possible, on his confidence, on what people are saying, because people say all sorts of things. I’m going to look at what you’ve done versus what you could do. and as it turns out, Ilia was just the better fighter and I did not think that would be the case.

There are a lot of numbers on the big board behind me, but what it all comes down to is, I think there’s an inefficiency. I think Alexander Volkanovski should be favored by more to win in his upcoming matchup against Ilia Toria. Because of that, there is really good value for gamblers who are betting on the UFC 298 Main Event.

Let’s get into the numbers and my reasoning starting with UFC 298. Alex is the slight favorite at a minus 130, Ilia is a slight underdog at a plus 110. Minus 130 gives Alex an implied win probability of 56.25%, which I think is far too low.

So, let’s look at Alex’s most recent matchups, starting with UFC 294. He was a plus 210 underdog against the minus 260 favorite, Islam Makach. The reason why UFC 294 is significant is because Alex got knocked out badly by a head kick, by a leg kick to the head. This happened on October 21st, and this upcoming matchup will occur on February 17th. So that will be 119 days from the time he was knocked out. This may be what is weighing heavily in odds makers putting Alex at a slight favorite, but let’s continue on to UFC 290.

And this is where Alex was a minus 370 heavy favorite against the plus 290 heavy underdog, Yair Rodriguez. What is interesting about this is, I think Yair presented Alex with the most dangerous matchup outside of Islam Makev, and yet Alex was the extreme favorite here. I think Alex’s current odds should be more in line with this minus 370, and I’ll get to why in a second. But just keep in mind that Yair is very dangerous and he was still an overwhelming underdog at UFC 290.

At UFC 284, we saw the initial matchup with Islam Makf, and Alex was a big underdog at a plus 310. At UFC 276, we saw Alex and Max Holloway. I think this was their trilogy fight, and Alex was at a minus 190 for this one. At UFC 273, Alex was a minus 700 favorite against the Korean Zombie. Then, at UFC 266, Alex was a minus 155 favorite against Brian Ortega.

So, what I want to focus in here though, is UFC 290. He was a minus 370 favorite. Why isn’t he more favored in this upcoming matchup with Ilia Toria? Let’s look at Ilia Toria’s recent significant matchups. We had Bryce Mitchell where he was the number 14th. Ilia was ranked number 14 against number nine, Bryce Mitchell, and he won in convincing fashion against Bryce Mitchell, although Mitchell had his moments.

Then Ilia Toria came in ranked number nine against number five, Josh Imtt, and Ilia dominated Josh Imtt over five rounds, getting the decision. What’s interesting is, in these matchups, Ilia was the already the slight favorite against Bryce Mitchell, even though, of course, Bryce was ranked number nine and Ilia was number 14. So, he was already given oddsmakers were already favoring him. And then, what really stands out is, Toria was a minus 320 favorite against Josh Imtt, even though Imtt was ranked number five at the time. Ilia was only number nine at the time, and then Imtt was the plus 265 underdog.

So, odds makers have given Toria a lot of respect, and they’re continuing to do so against Alexander Volkanovski. But just given these past matchups, what do we have here to provide any sort of basis that these two should be evenly matched or very Ilia should be the very slight underdog? I don’t see any evidence of that, really. There isn’t much to go on with Ilia besides the hype and his confidence. So, I think that may be what’s swinging things is emotions.

And besides that, we do know there might be something with this knockout. There might be something to that because, with odds makers, this is the sharpest money in the world. You’ve always got to assume that they know something that you don’t. But given the outsider’s perspective, I think Alex should be a much more significant favorite. In fact, I went ahead and put at a minus 350, which gives him a 77.78% implied win probability.

So, this is not to say that Alex will for sure win, of course, we don’t know that. But I think he should be, I think 77% of the time, thereabouts, he would be the winner in this matchup. And then so when we go and we look at the money here, if we bet $100 at Alex being a minus 130, we get a $76.98 profit. If we consider him at a 350, which is what I think he should be, then you would win a $28.57 profit.

So, really here, if we were to just take the $100 just as an example for this one time, you’re really getting a free $48.35 if you assume right, if you assume I’m correct here and that Alex wins. So, if Alex wins, this is looking really good. It comes out that way because Alex, to me, should be at a minus 350 favorite. And so, if he wins, if you consider that, then you’re basically getting $483 for free because the odds makers have him at such a slight favorite rather than a heavy favorite.

And then, when we look at the expected value, so if we were to consider this and we were to run it over and over again, this, and we’re correct in our assigning significance in the win probability and we’re factoring in the time that Alex loses, the average winnings here would be $15.38 per $100 bet. And so, over time, this really is a winning type of bet.

And I have given the interviews, given everything leading up to UFC 298, I don’t see any reason not to more significantly more heavily favor Alexander Volkanovski. And right now, at a minus 130, if I was betting, I’m not, I’m in Texas, but if I was betting, I would put heavy money on Alex just because I think this represents one of those real opportunities that occasionally comes up in sports betting where the odds makers are really, really off. And so, at a minus 130, that, to me, should be at a minus 350 right. And you can assign whatever odds you want to, but if we just play it conservative, I put it at minus 350 because, what has Ilia done? What has Ilia done? He’s beaten Josh EMT and he’s beaten Bryce Mitchell. Okay, what has Alexander Volkanovski done? Well, other than against Islam, who is in a weight class higher, he’s destroyed everybody, every contender at 145.

So, Alexander Volkanovski’s work speaks for itself. Brian Ortega, Korean Zombie, Max Holloway three times, Yair Rodriguez. This is everybody. These are all of the contenders at 145, and he’s defeated them all. And then against Islam, he fought Islam really close. And in this first matchup, he was definitely an extreme underdog. But then in the next matchup, he took it on 11 days’ notice. So, if the head kick is weighing in more heavily than the public knows, I can see that.

But, I don’t know that Alexander Volkanovski talks as if everything is fine. I think this is going to be a win many, many times in this matchup. And so, for this reason, I think there’s an inefficiency, and I think Alex should be favored by more.

This is part two of a two-part episode. The link to the first part will be in the description.

Now let’s look at the Anthony Davis timeline. Anthony Davis signs with LeBron James’s. Oh, actually, I’m just going to read the title of this article. And this is from Bleacher Report. The title of the article, Pelicans Anthony Davis signs with LeBron James Klutch Sports Agency. It says, LeBron James’s Klutch sports agency giving LeBron possession of Klutch sports. And so this was on September 23, 2018.

And then a few months later, on December 18, we have LeBron James making the comment that it would be amazing to play with Anthony Davis. He said that would be amazing. And then he said it would be incredible. And then a few days later, on December 22, we have a ridiculous back and forth. And I have, a link to the clip, and I will include this in the YouTube description. But in this back and forth, LeBron James tries to downplay making those comments, which, by the way, Brian Winhorst, who I mentioned, is a journalist who has covered LeBron extensively. Brian Winhorst said that LeBron went out of his way to make sure that those comments became public and were known. And I believe Winhorse said that he told, David, McNamee, I think that’s his name, that he told David to make sure to get that quote. So the point is, Winhorse said that LeBron knew exactly what he was doing with those comments.

But then we have this smug LeBron clip from a few days later, on December 22, where he’s asked about this by reporters. And then he tells the reporter, there’s a group of reporters around him. He tells the reporter to ask him if he would like to play with Kevin Durant. And then he answers, absolutely. And then he says, ask me if I’d like to play with Jimmy Butler. And then he says, say it right now. And he says, ask me about Kyrie, Giannis, Joel Embiid, Ben Simmons, Luca, and then he says, ask me. Then he says, come on, guys, this is not rocket science. This is not rocket science. These are great players. Absolutely. I would love to play with a lot of great players. That’s just who I am. People get caught up in bunches when they wish they could control what you say, and they can’t control me at all. And I play by the rules.

Here we have LeBron completely downplaying the fact that he has gone out of his way to say that playing with Anthony Davis would be amazing. And keep in mind the scenario here. We’re not talking about tampering, but we’re talking about, this is just a few months after Anthony Davis signs with Klutch sports, and there are already rumors about him. And then on June 15, less than a year after Anthony Davis signs with Klutch sports, he has traded to the Lakers. So we have the benefit of knowing what has happened in hindsight, right? We can go back and look and see how this played out. It played out exactly how people were expecting it to play out.

So again, the question is, is there a conflict of interest? And whose fault is it? If a conflict of interest exists and LeBron’s actions are, let’s say, they’re in violation of the NBA bylaws or the collective bargaining agreement, or against at least the spirit of those two documents, then we have to look at Adam Silver and the NBA. What are they doing to ensure that there is fairness and to ensure that the league is maintaining credibility and doing all that it can to make sure that there’s an even playing field.

And so I have one more page here, and it starts off, I want to start off with a CBS interview where the interviewer is talking to Rich Paul. And then they bring up the Anthony Davis situation, and it says, the center had a large contract, but he was tired of losing, so he fired his agent and he hired Rich Paul. And then Paul flouted NBA rules by publicly demanding a trade. And this got Davis a $50,000 fine, which I mentioned. The interview goes on to say the drama landed Paul on the cover of Sports Illustrated, which called him the most polarizing figure in the NBA.

Basically, this scenario is being posed to Rich Paul. And Rich Paul says, when it was someone that didn’t look like me, it was genius. It was why you get a power agent. But when it was me, I’m destroying the league. I mean, those things are absurd. Actually, they’re not absurd. And so what you have here is another attempt to shift what the facts are. The outrage is not because of Rich Paul being black. In fact, the NBA is more pro-diversity and inclusion than really any other entity I can think of. Off the top of my head, I don’t think the NBA was against there being a black sports agent and making moves. There’s criticism being drawn because people are looking at the situation and recognizing it for what it is, he says. I mean, those things are absurd. How is it absurd? I’m destroying the league? Well, I don’t think it’s necessarily you that’s destroying the league. I think other people would say LeBron is directly contributing to that. Rich Paul, of course, is a part of the story, but we know who Rich Paul’s friend is.

And then there’s a really interesting article from Chris Broussard, and it’s from several years ago. I think it’s over a decade ago now, but there’s a few interesting quotes from the article, and one is from Rich Paul. And it talks about this time where LeBron met Rich Paul. And Rich Paul is quoted as saying, if I don’t have that jersey on, we don’t have a conversation. Rich Paul was wearing a Warren Moon Houston Oilers throwback, and LeBron connects with him over that jersey. And one other excerpt from the article says that shortly after James was drafted, he called Paul one afternoon and asked for his Social Security number. And it says, Paul had no idea what James was up to. But about a week later, he received a check from King James, Inc. It was his first two weeks’ pay. There was no plan, certainly no business plan in place then, but James was confident they’d figure it out along the way. And LeBron is quoted as saying, I just felt like Rich was someone I wanted to grow with. He’d always kept it real with me, and I wanted him to be down with my team.

Keywords: my team. Does that sound like someone who is ready to seed over power to this new power sports agency? And does that sound like someone who is working on equal footing with someone else? Does that sound like someone who is going to stay separate from this new sports agent agency? One GM who has dealt with Paul said that there’s no specific training to be an agent. Most of the smart ones are more marketing guys than anything else. Is Rich sophisticated enough? Well, he’s sophisticated enough that he has. LeBron. Continuing to present-day Klutch Sports represents literally dozens of NBA players. And these may be in the past or they may be current clients, but the client list includes some notable names, including Lonzo Ball, Keldon Johnson, Draymond Green, De’Aaron Fox, Darius Garland, Tyrese Maxey, Dejounte Murray, Fred VanVleet, and Trae Young.

And one other note is that one client was Nerlens Noel, and he filed a lawsuit in November 2021 where he accused Rich Paul of doing, quote, unquote, little to no work in securing market value contracts, endorsement deals, and other financial considerations for Nerlens. And it says that Nerlens’s professional relationship began with Paul in the summer of 2017 when he was a restricted free agent. The Mavericks had made Noel a $70 million offer, which. And that offer was when he was represented by a previous agent, which was Happy Walters. But then Noel said he was recruited by Paul that summer. And then Paul told Noel that if he terminated his relationship with Happy Walters and signed with him instead, Paul would get him that Max deal. And as a part of this, Paul advised Noel that he ceased negotiations with the Mavericks, sign a single-year qualifying offer, and seek a max deal on the free-agent market the following season.

And so that is taken from the lawsuit. But this leads to another question. Is Rich Paul even capable of being an NBA agent? I don’t even know. Is he still, an active NBA agent, or is it that other agents now brought in under Klutch Sports are taking care of those agent duties? But that’s really the side point. The main point here is that a real or apparent conflict of interest exists. For all of the reasons I’ve covered, this is not a secret. It’s just not covered. We don’t see a lot of coverage on this. And when the coverage is there, it is very light. It doesn’t go in depth into these specifics that are very, very important. But here we have Klutch Sports. They are still looming large in the NBA. And I think there are a number of people, teams, sports agents, general managers, players, who are waiting for any type of response from Adam Silver. As I mentioned, the NBA reportedly investigated this, but the only finding was that LeBron didn’t have a financial interest. Of course, he wouldn’t.

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.

With increasing frequency, I have seen LinkedIn news headlines and Google trend suggestions with layoffs for major corporations. And these layoffs entail a significant percentage of the workforce being effectively fired. And these companies will tell you that this is a business decision. They may be anticipating a further decline in the economy.

They may have less profits. They may have consecutive down quarters, whatever the reason is. They will try to justify it as a business decision. Of course, we could also ask what about the compensation for the executives who are at the home during this down period. Regardless, the surrounding community can also make a business decision.

And that business decision can be not to purchase. from the companies that are engaging in these layoffs in mass. And by doing so we can affect the business decision of the corporations to make these layoffs. Companies need to retain the employees. We not, we all know that companies. Have profited significantly from upturns in the economy when the economy was good.

They’ve captured tremendous value. Now they only want to hold on to that value and they don’t want to make their employees a part of their long term strategy. Well, there can be consequences for this and for so many companies that supposedly care about social responsibility, this would be the ultimate test.

This would be the test to see if they truly do care about what they will often deem as family or their community. This is the test, not token donations. This is the test, will you retain your workforce? And for those companies that choose to make layoffs, The, the community, everyone needs to start having a negative stigma associated with that company.

So, hashtag layoffs, hashtag company, hashtag do not support. These companies need to retain their workforce. They can’t cut people simply because profits are down or they’ve had consecutive down quarters. If they really want to feel. A down quarter than the consumers can let them know exactly what they think about these layoffs and support these workers support these people that surround us and are in the community because when there when there are one round of when there’s one round of layoffs, when there’s another round of layoffs, when other corporations start following suit, Everyone is impacted beyond the workers.

But of course we need to support the workers. Companies need to keep these people employed and we need to stop seeing layoffs.