The state and stakes of the WNBA’s Las Vegas Aces investigation — Alanna Smith talks Minnesota Lynx, Australia

The IX: Basketball Wednesday with Howard Megdal, June 12, 2024

Happy Basketball Wednesday, presented by The BIG EAST Conference. The WNBA has hired an outside law firm to conduct its investigation into any role the Las Vegas Aces played in the publicly announced arrangement between the Las Vegas Convention and Visitors Authority and players on the Aces to pay each player $100,000 per year in 2024 and 2025, multiple league sources have confirmed to The IX. As I previously reported, the league opened this investigation back in May. But in the following weeks, much has already changed, including the nature of the proposed arrangement itself.

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The decision to add legal firepower to this investigation is a sign to many around the WNBA that the league is taking this new inquiry more seriously than the previous investigations into the Aces, which stemmed from allegations that Las Vegas paid players under the table and allegations of workplace discrimination against the team.

Those two investigations ultimately led to a pair of sanctions from the league. For “violating league and team Respect in the Workplace policies”, Aces head coach Becky Hammon was suspended for two games. For “violating league rules regarding impermissible benefits”, the Aces had their 2025 first round draft pick rescinded.

The general consensus around the league was that the Aces had, essentially, gotten away with it. One team executive simply described this as: “Now we know the price we’ll need to pay to cheat.” And there was a universal consensus that it was a price worth paying, given the team Las Vegas had assembled en route to winning its second straight WNBA title.

But both the nature of the current arrangement and the shifting parts of the arrangement itself under investigation change everything from the stakes of the current inquiry into the future of the league to how much control the Aces have over the league getting a full accounting of this deal.

Let’s start with how the payments are to work, a part of the agreement absolutely in flux, even now. Back on May 17, LVCVA CEO Steve Hill made an announcement to the players inside the Las Vegas Aces’ locker room that the LVCVA would pay each player $100,000 to “just play. That’s it.”

All parties were quick to note that this entire enterprise came as a complete surprise to the Aces organization itself, though as one WNBA front office executive noted, “it’s hard to believe the Aces just let the LVCVA into the locker room with cameras, no questions asked”.

But $100,000 to each player isn’t so simple, either, as all parties involved have quickly learned. For instance: teams don’t simply operate with a single, 12-person roster all season. So how does this work for someone like Tiffany Hayes, signed after the season began? Or Dyaisha Fair, cut after playing in one game with the Aces?

That arrangement was unclear to the players and even their agents. Contrary to the claims by Hill — who said on May 17 that players had “signed contracts”, then backtracked on May 20, saying that player agents had received letters of intent, “which each agent has agreed to” — multiple WNBA agents tell The IX that they still hadn’t received anything in writing from the LVCVA weeks after the announcement took place.

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The LVCVA has not responded to multiple inquiries from The IX about the full nature of their arrangement, what paperwork exists at this point and how partial-season performances will be compensated by the LVCVA. But multiple league sources told The IX there have been three scenarios floated by the LVCVA so far — the original, full payment to all, a payment structure of $2500 per game played (the concept being $2,500 X 40 = $100,000) and finally, prorated around days on the roster.

Clearly, it all gets complicated, fast, while making much of the initially claimed arrangement somewhere between demonstrably false and extremely hazy. If the LVCVA had no contact about this arrangement whatsoever with the franchise — because any collusion on it would violate the WNBA collective bargaining agreement — and no agreement was made with the agents, exactly how did the LVCVA come to present this $1.2 million per year for the next two years (with many of the players under contract in 2024 not signed for 2025) in the Las Vegas locker room on May 17?

“The idea that the LVCVA would just decide to spend some serious money, unilaterally, doesn’t pass the laugh test,” one WNBA team executive told The IX. Multiple WNBA league sources noted the close working relationship between LVCVA CEO Steve Hill and Aces owner Mark Davis on everything from the building of Allegiant Stadium to hosting Super Bowl LVIII.

The ultimate results of this investigation may turn on whether, if there were any collaborations or promises made between the Aces and the LVCVA, it took place in writing. In the prior investigations of the Aces, the team declined to cooperate, numerous league sources told The IX, and that left the league with limited options.

But the LVCVA is a public entity, meaning that it is subject to public disclosure laws, and Nevada has one — Nevada Revised Statutes Chapter 239. The IX has filed a number of public records requests pursuant to communications between the LVCVA and various stakeholders involved in this agreement, and will continue to pursue the release of these records.

More to the point, the nature of this entity means that across the league, other teams will not accept as a limitation of any investigation that the outside counsel was unable to obtain these records, either.

For their part, the Aces have worked to conflate the idea that WNBA players should be paid more — something everyone interviewed for this story, no matter their feelings on the current investigation, agrees should happen and will under the new CBA — with doing so under any circumstances. Davis telegraphed his intention to do so by any means necessary early on as owner, both in his public and private statements, according to multiple people with knowledge of his words and actions after assuming ownership of the Aces.

And that’s the really important part, as so many around the league see it. The players are expected to opt out of the current collective bargaining agreement after the 2024 season, which would trigger an end to the current CBA following the 2025 season. There will be more money flowing in — both from expansion fees and a new media rights deal, though as the Washington Post’s Ben Strauss astutely points out, a lack of definition by the NBA over what those rights will be valued at will allow the WNBA to make that new revenue more opaque, and as I have previously written, that could have significant consequences for how much Terri Jackson and the WNBPA can negotiate for in those upcoming talks.

So more money is coming, to the general delight of everyone across the league. With that comes greater financial rewards for winning, and a bigger problem, too.

“If the league makes it clear the Aces can skirt the rules again, isn’t that going to embolden them to keep on doing it?”, one WNBA executive said.

That danger is precisely why, back in 2000, the NBA came down so hard on the Minnesota Timberwolves for their secret, side agreement with Joe Smith — the loss of five draft picks, a $3.5 million fine (worth more than $6.3 million in today’s dollars) and a one-year suspension for Wolves owner Glen Taylor.

Then-NBA Commissioner David Stern said, of the investigation’s findings: “This was a fraud of major proportions. There were no fewer than five undisclosed contracts tucked away, hoping they’d never see the light of day. This is fraud that ripped to the heart of the (collective bargaining) compact. The magnitude of this stuff is shocking.”

At issue in this investigation, of course, is a potential violation with 12 separate players. Notably, the NBA didn’t find out about Smith directly from the team, but rather from an unrelated legal proceeding involving Smith’s then-agent, Eric Fleisher, giving the league its first documented proof of cap circumvention. The involvement of a public entity may have given the WNBA a similar opening.

It is vital not to prejudge this set of facts. But the level of negligence on the part of the league not to investigate this is hard to overstate, and the potential effects of allowing it to go on, if it violates the CBA, is catastrophic according to multiple other WNBA executives.

“The impact of this, if it does involve any knowledge or cooperation from the team and is allowed to go on, is potentially existential for the way the league does business,” one WNBA team executive said. “And Cathy, with her business background, not sports, I’m not sure she understands that.”

One thing the league does understand is that their ability to access information concerning this arrangement is different, and that’s something the LVCVA may understand as well. The IX has learned that the LVCVA has engaged R&R Partners, a frequent collaborator with the LVCVA dating back to the 1990s, to facilitate this deal. Whether the LVCVA attempts to hide behind R&R Partners to avoid public scrutiny for any legal framework remains to be seen, but something prompted this change from the original plan, which the LVCVA said in a May 19 press release was “brokered directly with each player’s agents”.

We now know that part isn’t and wasn’t true. What else turns out to be true will be up to the outside firm the WNBA hired to find out — a process those around the league who spoke to The IX characterized as likely to take several more months.

Depending on what the firm discovers, Cathy Engelbert will have some big decisions to make.

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Written by Howard Megdal

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