What happened when LVCVA’s Steve Hill met WNBA’s Las Vegas Aces investigator

The IX: Basketball Wednesday with Howard Megdal, June 19, 2024

Happy Juneteenth and happy Basketball Wednesday, presented by The BIG EAST Conference. “I appreciate you asking me the question,” Las Vegas Convention and Visitors Authority President and CEO Steve Hill said Wednesday evening near the end of a wide-ranging interview with The IX, discussing the ongoing investigation into the announced arrangement between the LVCVA and players on the Las Vegas Aces. “So I had the opportunity to explain it.”

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Hill was referring to his quote in a widely-distributed video inside the Aces’ locker room where he told the team’s players: “The offer is really simple. We want you to just play, keep repping Las Vegas. And if you get a three-peat, that will be icing on the cake.”

Just over a month later, and a day after spending “a couple of hours” meeting with Kobre & Kim, LLP, the outside law firm hired by the WNBA to lead the investigation into whether any violation of the league’s collective bargaining agreement occurred, Hill wanted to set the record straight about what he’d meant by this phrase.

“The rep Vegas part is where the deliverables are, right?,” Hill said. “I’ll tell you what we met by ‘just play’. And that was not off the cuff for me. The message there is, we want these ladies to have the opportunity to be able to make a choice for themselves that is not driven by I gotta go to Europe to play in the offseason. We want them to stay in town. We want them to rep Vegas year round. And many of them don’t have that option. And so we wanted to lift that burden and give them the option for staying in town. Just play stay in town, rep Vegas.”

Such a goal is admirable. It is, in fact, in direct line with the league marketing agreements spearheaded by Cathy Engelbert herself. What it may also be is a violation of the CBA — that an individual team has facilitated this set of marketing agreements, with a total value well in excess of what an individual team is allowed to offer players, let alone what the entire league pays out each offseason. Everyone in and around the WNBA wants the players to be paid more. But an individual team facilitating it for its players alone strikes at the core of competitive balance issues.

Hill repeatedly stressed that the Aces not only didn’t facilitate this deal, they didn’t even know about it. However, there are a number of different facts at our disposal that throw both of those notions into serious doubt, including Hill’s own account.

To review: the LVCVA’s announcement on May 17 that it intended to pay each Las Vegas Aces player $100,000 apiece spurred a WNBA investigation on May 18. At issue is the question of whether the Aces violated the CBA in any way during this process.

We now know, by Hill’s own account, that when Becky Hammon said, “The Aces have nothing to do with it” on May 18, that is not correct, according to Hill. The Aces, on May 3, informed Hill that in order to complete the $1.2 million deal with the players, the LVCVA would need to come to an agreement with the Aces on a deal first, for $250,000, for use of assets including the team’s logo.

Hill said he did not remember who from the Aces told him this, but stressed that it was not owner Mark Davis. In fact, Hill said, he only spoke to Davis one time during this period, a “three-minute conversation” with Davis on May 15 in which Hill told Davis about the arrangement and said it was clear to him Davis hadn’t heard anything about it. I asked Hill if he was surprised, 12 days after an employee of the Aces had asserted the team and the LVCVA needed to come to a six-figure arrangement, that the owner of the team still didn’t know about it. Hill said he wasn’t surprised.

“Because a $250,000 sponsorship to the Aces, and to Mark, really doesn’t matter.” He described his relationship with Davis as cordial, but not social. There is a certain incredulity in Hill over the fuss about this deal as well, not surprising when the LVCVA’s annual budget is $457 million, per Hill.

A public records request for any communications between the Aces and the LVCVA is pending, with the LVCVA telling The IX on June 18 that they cannot comply with this request until at least July 9. Hill told me, “I think you’re going to be sorely disappointed, Howard… Just saying, we’re very used to public records requests, right? So we know we don’t communicate that way very much.”

Absent those communications, Kobre & Kim will be left with Hill’s account and anything the Aces agree to share. And as multiple league sources tell The IX, the fact, per Hill, that the Aces were not only aware of this arrangement weeks before it was announced but instructed the LVCVA that it could not make such a deal without also paying the Aces appears to run afoul of this provision of the CBA, Article XV, Section 1 (a): (Editor’s note: Emphasis added from The IX)

“It is the intention of the parties that the provisions agreed to herein, including, without limitation, those relating to the Salary Cap, the Exceptions to the Salary Cap, the Rookie Scale, and free agency, be interpreted so as to preserve the essential benefits achieved by both parties to this Agreement. Neither the Players Association or the WNBA, nor any Team (or Team Affiliate) or player (or person or entity acting with authority on behalf of such player), shall enter into any agreement (including, without limitation, any Player Contract, Team Marketing and Promotional Agreement, or any amendment or extension thereof), or undertake any action or transaction (including, without limitation, the assignment or termination of a Player Contract), which is, or which includes any term that is, designed to serve the purpose of defeating or circumventing the intention of the parties as reflected by all of the provisions of this Agreement.”

By defining this agreement so closely to the league and team marketing agreements — designed by Engelbert and the league to compensate players and keep them rested and promoting the WNBA — means the deal itself vastly exceeds the effective $150,000 ($100,000 for team marketing agreements, $50,000 for time off bonuses) each WNBA team is permitted to spend annually on team marketing agreements themselves, according to one WNBA team executive. If Kobre & Kim determines that this is what the arrangement between the LVCVA and the players is, that’s going to be a problem for the Aces.

Hill reiterated that the deal with the Aces for use of the team’s logo and name was standard, noting that the LVCVA has made similar deals with the Oakland Raiders of the NFL (also owned by Davis), the Las Vegas Golden Knights of the NHL and even soccer club AFC Bournemouth of the English Premier League. He noted that the Bournemouth deal was substantially more — $750,000 — while the deal with the Raiders was “between $500 and $600,000 range”, adding that the Raiders deal was “a couple of years ago.”

This, too, is potentially problematic. The league may view the Aces receiving below market value for their logo rights while knowing the facilitating of this deal allows their players to receive considerably more money than the Aces could otherwise pay them as equivalent to the Aces providing something of added value to the LVCVA as part of closing that deal.

Each of these fact patterns, individually, is not a problem. The combination may be, which is what the investigation is tasked with determining and reporting to Engelbert, to decide whether this pair of agreements constituted the Aces entering “into an agreement or understanding with any sponsor or business partner or third party under which such sponsor, business partner or third party pays or agrees to pay compensation for basketball services (even if such compensation is ostensibly designated as being for non-basketball services) to a player under Contract to the Team,” as Article XV Section 1 (b) of the CBA reads in part.

What Kobre & Kim decides, and what punishment, if any, Engelbert metes out as a result, will come down to intent. And that is where things get complicated. Hill told The IX that he’d told Kobre & Kim that he was willing to provide them with “anything that is subject to public records requests.” To understand what Hill believes that scope to be, he explained it a few minutes earlier in our same conversation:

“The way our public records request works, right: You get the latest draft. Whatever the agreement is. You don’t get the back and forth up to it. So you’re going to put it in a public records request, for that contract, you’ll end up with a contract, but you won’t end up with all of the back and forth leading up to it.” He described the LVCVA as “a relatively open book.”

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To the extent the LVCVA is drawing the line at disclosing correspondence to Kobre & Kim that precipitated its agreements with either the Aces, R&R Partners (the advertising firm Hill credited for coming up with the idea and a longtime collaborator with the LVCVA) or players and agents – i.e. the “back and forth” referred to by Hill – on the ground that the same does not constitute a “public record,” Hill might not be right on the law.

According to an attorney consulted by The IX who has litigated such matters, a public entity’s communications, including those shared with private parties, can be considered “public records” subject to disclosure. Under Nevada’s Public Records Act, “[t]he use of private entities in the provision of public services must not deprive members of the public access to inspect, copy or receive a copy of books and records relating to the provision of those services.”

For instance, in the case of Comstock Residents Assn. v Lyon County Bd. of Commissioners, 134 Nev 142, 145 [2018], the Nevada Supreme Court held that emails and text messages exchanged by governmental entities, including on private devices, can be considered public records subject to disclosure.

“In this case, the LVCVA is a public entity dedicated to providing marketing organization services. So, if there are communications in furtherance of that purpose exchanged by the LVCVA, they are subject to disclosure as public records absent some other applicable privilege or exemption from disclosure,” the attorney said.

A court preceding precipitated by the WNBA, or even Kobre & Kim, to compel the LVCVA to release those documents would likely turn on such precedent. Setting aside the law, any reluctance on LVCVA’s behalf to disclose underlying correspondence that might verify its story would, of course, seem self-defeating.

Of course, there are recourses available to Kobre & Kim beyond trying to compel the LVCVA to turn over relevant emails. The investigation may simply chalk up any LVCVA recalcitrance on turning over documents as evidence of wrongdoing. Similarly, the WNBA cannot compel the Las Vegas Aces to turn over communications under any legal provision of the state of Nevada, but it can take how much or little the Aces cooperate in any investigation into account when deciding on a punishment, should the league conclude wrongdoing occurred.

In the meantime, the Aces play their 13th game of the season Wednesday night — approximately a third of the way into the first season this deal was supposed to cover. Hill was insistent that this agreement would go forward, whatever final form it takes, but he said as of the last time he checked a few days ago, only “four, maybe five” players had signed contracts. So the arrangement involving the paying of players still remains incomplete.

Regardless, the LVCVA has done quite well. Hill’s original video has been viewed over two million times on Twitter alone.

“This concept with the Aces is, frankly, different enough, and the spotlight that has been on it because it is different, has already paid for the sponsorship,” Hill said.

I jokingly asked if he meant that the investigation itself had added value to the arrangement. Hill laughed.

“I don’t know if I’d say that,” Hill said. “But yeah, we’ve gone back to just compare what the announcement of the Super Bowl was — in terms of impressions and social media interest… We put, ultimately, 40-some million dollars into the Super Bowl. And I don’t think the announcement with the Aces players is going to be as big as our announcement of the Super Bowl, but it’s not going to be you know, 20 or 30 or 40 times different.”

Stathead Stat of the Week

A’ja Wilson has 540 points through the first 20 games of the season. That’s the most points any WNBA player has scored in the first 20 games of any season.

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Written by Howard Megdal

Howard is the founder of The Next and editor-in-chief.