645 Fifth Avenue, New York, New Manhattan, 19th floor of the Olympic Tower.
This is the heart of the NBA headquarters. David Stern, holding a white porcelain teacup, stood before the large, soundproof corner window, overlooking the yellow taxis shrouded in a thin mist on the street below. The red hotline on his desk, directly connecting to the boards of directors of all thirty teams, had been running almost non-stop all morning.
Vice President and Chief Operating Officer Russ Granik walked in, carrying a thick, dark blue folder, his expression revealing the pressure and exhaustion from working overtime for several consecutive days.
" David, the fourth call from Chicago just ended." Granik placed the documents on the mahogany table, pulled out a leather chair, and sat down. " Jerry Reinsdorf has pulled out all the trappings of a tax lawyer. He's invoking Article XIII, Section 2 of the 1999 Collective Bargaining Agreement regarding 'anti-circumvention,' formally requesting the league's legal department to initiate judicial audits of the Boston Celtics and Converse. Jerry's exact words were: 'If a team owner can pay lifetime salaries to a rival's star player through a private company, then the NBA's current salary cap system becomes meaningless.'"
David Stern turned around, took a sip of his black tea, and his face remained expressionless.
"Besides Reinsdorf, who else is on the management committee's mailing list?" Stern asked.
" Mark Cuban sent a long letter directly from Dallas to all board members, with language bordering on personal attacks; Herb Simon from Indiana submitted a joint memorandum of inquiry on behalf of six small-market investors; and in Los Angeles, Mitch Kupchak also tried to gauge the league's sentiment through the deputy general counsel."
Granik opened the documents and systematically outlined the core of each team's protest. "The legal counsel for each team has hit the nail on the head, directly addressing the weakest point in the current collective bargaining agreement: the shoe sponsorship contracts signed between players and commercial brands are completely exempt from being included in the team's salary cap under the current terms."
At this point, Granik rubbed his temples and shifted the conversation to the historical origins of the system.
"Strictly speaking, it's not new for club owners to provide subsidies to key players off the field; it's a kind of shady tradition that continued from the 1970s and 80s. In an era when contract texts weren't standardized, teams would stuff all sorts of outrageous additional conditions into agreements to snatch superstars: long-term retirement pension insurance, low-interest or even interest-free commercial real estate mortgage loans, arranging executive positions with nominal salaries for players' families, lifetime free luxury airline tickets for the whole family, and even directly gifting long-term lease rights to luxury cars from their own car dealerships."
"By the 1980s and 90s, with the establishment of the salary cap system and the popularization of standard player contracts, those crude additional clauses were completely eliminated on the surface. However, the subsidies in private did not disappear; they simply evolved into a reverse transfer of players by team owners through their affiliated businesses."
Granik gave a wry smile, "To appease Shaq O'Neal, the Richard DeVos family of the Orlando Magic used Amway's vast distribution channels and commercial properties to shower Shaq with various local profit-sharing agreements. Chris Paul Allen of Portland, leveraging Seattle's tech venture capital network, opened up low-threshold angel round internal co-investment opportunities to the Trail Blazers' Trail Blazers players. Jerry Buss, in Los Angeles, constantly shuttled between major film studios, connecting his All-Stars with Hollywood sponsors. As long as no fool actually puts these transfers of benefits in writing, the league's legal department usually won't bother with it."
This is a gray area that puts the alliance office in an extremely awkward position.
Chapter 13 of the collective bargaining agreement explicitly prohibits any form of dual contract or illegal subsidies. However, as the league commissioner, David Stern is ultimately the highest-ranking professional manager jointly appointed by all team owners and receives a salary from the owners.
Privately, owners use their businesses to offer preferential treatment to their star players. This serves to solidify player loyalty and quell any resentment towards salary cap restrictions. As long as the accounts are clean and there's no direct legal grounds for objection, Stern has always been happy to turn a blind eye. After all, the league has no legal authority to forcibly audit a private company's commercial endorsement contracts; doing so would only offend all the owners.
"But Lin Qi's actions this time completely shattered the facade of civility that everyone was maintaining."
Granik sighed and pointed out the core problem, " Converse was wholly acquired by him, and all assets and shares are under Lin Qi's personal name, without even a layer of corporate firewall. Last year, when they drafted Dwyane Wade, Converse immediately offered him a high-priced endorsement deal. This Kevin Garnett's old contract just expired, Converse immediately took over. Now, he has gone even further, crossing the boundaries of franchise rights, offering a lifetime contract to Kobe Brian, the absolute ace of their Eastern Conference rivals, the Chicago Bulls, and launching a massive advertising campaign during prime time at the NFL Monday Night Football Championship."
Granik looked at Stern: "Giving high-value endorsements to your own players, people can pretend to turn a blind eye. But giving huge checks to the core players of rival teams, even making the Chicago Bulls ' star player's commercial lifeline completely dependent on the Boston Celtics ' owner, has already made other investors feel real panic. Reinsdorf and Cuban are sticking to their guns because they believe Lin Qi is engaging in cross-team personal dependence and off-court infiltration."
After listening to this accusation, David Stern sat back in his high-backed leather chair, his tone calm but with a hint of coldness.
"Reinsdorf was shouting all the way on the phone, but how did the Chicago Bulls handle it when the Eagle County incident first broke out in July?"
Stern flipped through the briefing on the table, his eyes sharp. "Back then, the Chicago management, fearing trouble, kept their public relations doors tightly shut, allowing major sponsors to line up and tear up their contracts in the media. Nike's legal department, in order to cater to Wall Street's ethical scrutiny, issued a freezing order that directly pushed Kobe into a corner. If the Colorado judge had been allowed to hold the trial under the barrage of media attention across the United States, next month broadcasters across the country would have faced a massive cancellation of advertising slots, and the league's commercial reputation, built at a cost of hundreds of millions of dollars, would have suffered a major blow."
Stern placed his teacup on the table. " Lin Qi's intervention to freeze the lawsuit allowed Kobe to focus on returning to the court, which not only stabilized the Chicago Bulls ' market but also benefited the national broadcast viewership. The Chicago Bulls' management remained silent when the Eagle County incident occurred, but now that someone else has resolved their star player's troubles, Reinsdorf's attempt to cause trouble is unreasonable and has no justification whatsoever."
Granik nodded silently.
As the top decision-maker of the professional league, Stern's core focus has always been on broadcast ratings, global sponsorships, and commercial expansion.
Moreover, given the current situation, Stern simply cannot afford to take drastic action against Lin Qi.
In an effort to recruit Michael Jordan back into the Los Angeles Lakers, Jerry Buss secretly promised Los Angeles Lakers equity as a reward. However, after winning the championship, Jerry Buss reneged on the promise.
If this scandal is exposed, not only will the Los Angeles Lakers face huge fines and the stripping of their draft picks, but the credibility of the entire league will also suffer a major blow.
To appease Jordan, we'll need Lin Qi.
If the Lakers were to press Lin Qi again over a shoe contract, it would not only be unreasonable but could also escalate the conflict and reignite the previously calmed Lakers equity recruitment scandal.
In addition, there is the globalization strategy from across the ocean.
The Boston Celtics, who expanded into the Europe market and achieved four consecutive championships in the NBA, have an unparalleled appeal throughout the Europe continent.
Stern desperately needs to leverage the Celtics ' Europe exhibition tour to expand the NBA's overseas broadcasting rights revenue.
"But David," Granik rationally reminded him, "The management committee's protests are huge. Lin Qi has made too much of a fuss this time; if the league doesn't take a stand, the team owners will think the collective bargaining agreement has completely lost its binding force. In any case, a clear boundary must be drawn for him procedurally."
"Boundaries must be drawn, of course, but the right to interpret the system must be in our hands."