Las Vegas Aces team owner Mark Davis has made no secret of his attempts to circumvent the WNBA’s collective bargaining agreement (CBA) rules and provide his players with the support, both financial and otherwise, that he believes they deserve. His latest attempt reportedly went too far and he is being investigated by the league office for salary cap evasion.
The Next reported Wednesday that the defending Aces are under investigation for “making under-the-table payment offers to both current players and free agents the team has been pursuing.” The Aces were already close to the $1.42 million mark with all five starters entering the free agency period. They traded Dearica Hamby to the Sparks – which in itself is another investigation – to open up the cap room and sign Candace Parker and Alysha Clark, each a two-time WNBA champion.
Questions quickly arose about how the Aces were able to sign Parker, a two-time MVP still playing at a high level, and Clark, a defensive specialist, within their already limited cap restrictions. Aces players have repeatedly signed over the years for lower deals than they might get anywhere else. Parker signed for $100,000, according to Her Hoop Stats, a $95K decrease from her Sky salary, and Clark for $110K, less than her $185K in 2022 with the Mystics.
The moves propelled the Aces to “super team” status throughout the league and were met by a second super team in the New York Liberty, which added former league teammates of the Aces’ additions. Former MVP Breanna Stewart and standout point guard Courtney Vandersloot both announced they were signing with the Liberty, but have yet to sign contracts. The team has approximately $426,000 in cap room with at least three spots to fill, via Her Hoop Stats.
Aces reportedly violated the CBA salary cap
Reported violations are a similar deal to pay-for-play. After a senior Aces front office member and a player’s agent concluded a phone call about whether to sign or re-sign with the team, the agent would receive a call “with an offer for a specified amount of money from a particular, pre-selected company,” The Next reported. The work involved, presumably for what was a call about an endorsement or partnership deal, was “negligible,” reported The Next.
There were no further details on the transgressions. Neither the Aces nor the WNBA responded to The Next’s comment.
The allegations could violate CBA Article XV which states that a team may not enter into an agreement with a sponsor, business partner or third party that agrees “to pay a fee for basketball services (even if such fee is ostensibly designated as for non-basketball-related services) to a player contracted to the team.”
The settlement may be “inferred” as such if the fee is “substantially in excess of the fair market value of any services to be rendered by the player” or “if the fee in the player’s contract between the player and the team is substantially less the fair market value of such Contract.”
The CBA also clarifies that all involved interpret the salary cap, compensation, and agency rules “so as to preserve the essential benefits achieved by both parties to this Agreement.” They must not enter into an agreement or any transaction “designed to serve the purpose of defeating or circumventing the intent of the parties as set forth by all provisions of this Agreement.”
Davis continues to bend the rules
Davis was open during the offseason about finding loopholes in the ACB to support players, invest in product, and grow the league properly. This is clearly one of those cases, although it’s unclear if he’s taken it one step too far on that one.
The general idea is that owners should not enter into agreements that go against the meaning of the CBA, which is based largely on fairness and competitive balance for the 12 franchises. But the specific verbiage in the clause referenced is “to a player under contract to the team,” and that may be a trick Davis’ lawyers have pulled in for him.
Other ways he got around the larger idea of ”competitive balance” were outside the player salary cap. There’s no cap on the coach’s salary, so he was able to bring in former player Becky Hammon from the NBA and pay her $1 million a year, a controversial number since that’s nearly the entire salary cap of the NBA. squad. They won the franchise’s first title in his first season at the helm.
The issue of charters is ever growing in the league. All-Star Kelsey Plum told Yahoo Sports in December that Davis would purchase center seats on the team’s commercial flights so players would not have to sit directly next to other travelers during the height of the Covid-19 pandemic.
“What he did is just anything you can do in the CBA. Only the coolest versions of the stuff that are allowed,” Plum told Yahoo Sports.
Then there are the facilities. The Aces are training in an 80,000-square-foot building in nearby Henderson, Nevada that Davis built with them in mind. It has two full-size courts, locker rooms, training facilities, hydrotherapy rooms and more.
This is not the norm in the WNBA. Sky, for example, are in the third media market but practice in a recreational park center a 45-minute drive from the stadium they share with DePaul. Casual gym goers can hop on and talk to a Sky player on a stationary bike, as described by Chicago writer Maggie Hendricks, whereas that won’t happen in a private facility in Las Vegas.
The WNBA is reaching a tipping point
The longest-running women’s league in the United States will close its 27th season in May after steady growth over the past five years. But it also comes amid a clash between those who want to invest and “Just win, baby,” in Davis’ words, versus those who aren’t or can’t put in the money needed to reap the rewards later.
Liberty team owner Joseph Tsai, whose wife Clara Wu co-governs the team, has also been adamant in supporting the league. He was at the center of the latest rich versus poor issue when he was caught paying for his crew to fly on charters. The WNBA fined him $500,000 in 2021.
“It was the best $500,000 [Liberty owner] Joe Tsai has ever spent,” a league source told The Next. The Next reported that some sources believe Davis’s salary cap avoidance is “several orders of magnitude more serious” than charters.
Charter flights were part of Stewart’s free agency decisions and she said she signed with Liberty in part because ownership was willing to push the conversation about it. Commissioner Cathy Engelbert said last week charter flights must be “feasible” and, at an estimated $25 million a year, currently aren’t. The WNBA insists on competitive fairness, although one option would be to allow charters to those who wish to pay for or use them when needed. Stewart said the next steps she would like to see would be intermediate steps from no charter to all charter.
League full of wealthy owners
The two starters are often characterized as the two richest in the WNBA, and therefore able to break some rules and create the super-teams they created. The Aces and Liberty are the runaway favorites for the 2023 WNBA title.
However, it is a mischaracterization. Tsai is worth an estimated $8.4 billion, according to Forbes, and is arguably the richest sole proprietor in the league. (Not all net values are available.) Mat Ishbia, whose Phoenix Mercury and Suns deal was approved Tuesday, is worth an estimated $5.5 billion.
Davis’ estimated net worth of $1.9 billion is less than Indiana Fever and Pacers owner Herb Simon ($3.4 billion) and rivals that of combined Mystics owners Ted Leonsis ($1.6 billion) and Sheila Johnson ($780 million). Marc Lore’s new Lynx property (about $4 billion) and Alex Rodriguez (largely valued at around $400 million) is also up there.
Nearly everyone dwarfs the money in Sparks’ ownership group that includes Mark Walter ($5.4 billion), Todd Boehly ($5.3 billion), and Magic Johnson (latest estimated at $620 million).
There is money to invest in these WNBA teams with current owners, but it often feels like it’s a matter of will more than resources. Next’s report indicated that teams are ready to join the fray.
Several agents have already begun pushing other teams to adopt such arrangements, three WNBA front office members said The next. If the league either allows it, or imposes a penalty weak enough to make it useless as a deterrent, teams are already preparing to comply.
“So we know what the rules of the game are, and it’s time to catch up,” said a front office member The next.
The CBA will run through 2027. The league raised $75 million in a capital raise last year, and Engelbert is looking at the upcoming media rights deal as an infusion of cash into the league.