News Fix # 61: Dirty, dirty, laundry
I'm back with your weekly news fix, and I'm happy we're in this together. If you're new here, welcome! Get in touch anytime; I'd love to hear from you.
My sports fandom is casual at best. I'll watch a baseball, basketball, or football game now and then, preferably in a bar. The only sport I follow avidly is grand tour cycling, and I'm sufficiently clued into sports culture to understand this is weird and doesn’t count.
How then to explain my complete and total obsession with this Steve Ballmer salary cap circumvention investigation and story.
The facts are an addictive mix of big time money and power plus boneheaded rule-breaking a la The Great Muppet Caper. But what has me re-listening to hours upon hours of coverage are the questions this story keeps surfacing about journalism's shortsighted compromises and entrenched habits. In airing some basketball dirty laundry, we're very much exposing our own.
Contempt for the rules disguised as a sports scandal
If you haven't been following the Ballmer story, here are the relevant details:
Steve Ballmer is the former CEO of Microsoft and since 2014 has been the owner of the Los Angeles Clippers. Forbes ranks him as the ninth-richest person in the world.
A team salary cap in the NBA (which my husband reminds me is, in essence, an anti-player and pro-owner rule) should prevent Steve Ballmer from just spending his way to an NBA Championship, which the Clippers have never won.
Last September reporter Pablo Torre broke a story on his podcast, Pablo Torre Finds Out, that Ballmer had likely circumvented the salary cap back in 2019 to attract star Kawhi Leonard to the Clippers.
Torre started piecing the story together from bankruptcy records of a past Clippers sponsor and now defunct carbon credit start-up/fraud mill called Aspiration. The records listed Leonard as Aspirations largest creditor. From there, Torre found sources to confirm that Aspiration had a $28 million “endorsement” deal with Leonard that neither the Clippers nor Aspiration had announced publicly. Torre then confirmed payments from Aspiration to Leonard lined up with investments into the company by Ballmer. Based on that reporting, the NBA paid a well-known law firm to conduct an investigation into the Clippers.
Torre has continued to investigate. Over the past year he has uncovered records and sources describing a years long salary cap circumvention scheme by Ballmer and Leonard. The NBA's investigation, finally released a few weeks ago, backed him up, finding Ballmer and two other Clippers executives had arranged four “no-show” endorsement contracts worth $66 million with four different companies for Leonard. As punishment, the NBA issued the largest penalty in their history.
The watchdog that walked away
Perhaps hoping to outrun a string of bad news cycles, Ballmer denied any wrongdoing for a year. He still has not taken responsibility for the rule-breaking, though he recently said he will accept the punishment. Despite never asking for a retraction or a correction of Torre's stories, Ballmer went public with criticism from the beginning. He never called Torre a reporter or journalist, exclusively using words like “talking head,” “witch hunt,” and “podcaster.” He refused to answer his questions.
Ballmer's push to discredit Torre did seem to help keep the story from breaking through. For months, coverage was sparse. Fellow billionaire Marc Cuban went to bat for Ballmer. Few outlets tried to carry the story forward (The Athletic is a notable exception, but they have a formal partnership with Torre). There were no independent findings from the Los Angeles Times, for instance. ESPN, where Torre used to work as a fact-checker, went even further. They published inaccurate reporting trying to craft a narrative that Ballmer was innocent of rule breaking.
Dean Starkman's The Watchdog that Didn't Bark is one of my favorite books about news. It details the business press' failure to report on conditions that would create the financial crisis, despite knowing about them. The thesis is crystal clear; as pressure increases on the press, it values access more and investigative work less. I'll go further and say the incentives of access journalism are fundamentally misaligned with work in the public interest.
The desire to preserve access is a very loud dynamic in the lack of Ballmer reporting. It's both a sports and business story! These are two beats with resources, comparatively. Nevertheless, outlets seemed more interested in not offending a billionaire than in investigating rule breaking.
In Starkman's book, he points to instances of the alternative press investigating and then documenting the subprime lending of banks that would cause the financial crisis years later, but the reporting didn't break through. With Ballmer and Torre, there's a twist. It seems Ballmer, and even ESPN, want to cast Torre as the alternative press in order to then dismiss him. Torre is no outsider. He went to Harvard, just like Steve Ballmer, and has been successfully working in sports journalism his entire career. Torre has a successful independent company, but is no renegade. He's just doing the job of being both entertaining and a serious journalist, and taking serious financial and reputational risks. I think journalism awards create bad incentives, so I'm no fan. But I was happy to hear that Torre's reporting won a Pulitzer Prize this year. It was a necessary signal of institutional support and legitimacy.
A champion of the news
Perhaps the reason this story caught my attention in the first place last year was because I knew Steve Ballmer’s name. I did not know who he was, but that his philanthropy, the Ballmer Group, was making grants to Detroit area local news outlets a few years ago. A few representatives of Ballmer Group expressed preliminary interest in supporting Outlier, and asked to speak to me at a conference. They have not funded Outlier.
But Ballmer Group has given extensively to news. Earlier this year his wife, Connie Ballmer, gave NPR $80 million, its second-largest gift ever. Ballmer Group has donated to The Seattle Times, Chalkbeat, LA Local, the Detroit Free Press and others.
I don't believe these donations were intended to influence coverage. Through a spokesperson, NPR said they “published and aired several reports” about the salary cap circumvention. Several is a generous read. Using the search function on NPR's site brings up three stories about the Clippers or Ballmer from the last year. “When a donor is implicated in a story, NPR's newsroom makes independent decisions about whether and how to cover it, with disclosure and additional editorial safeguards where appropriate,” they added.
Ballmer's financial support of the news is interesting, instead, because it appears almost risk-free. The support might create an impression Ballmer is interested in accountability and the free flow of information. His rule breaking over the course of many years seems to indicate he was not worried about the free flow of information or accountability journalism being robust or brave enough to come for him. The Ballmer Group has never supported ProPublica, for example.
Accountability journalism appears to remain a particular brand of journalism, a niche brand the rest of the industry does not seem to want to fully embrace. If every journalism outlet was both capable of and willing to investigate power, and corporate wrongdoing in particular, we would all be better off and more deserving of public support. Even if it's just about sports.
Until next week, take care of yourself. I'll have an interview I'm excited to share with you all.