The NBA Went Too Easy on Steve Ballmer and Too Hard on the Clippers
In order to promote competition, the National Basketball Association (NBA) has a salary cap. Its rules (which are adopted as part of collective bargaining between the team owners and the players' union), are very complicated but the key point for purposes of today's discussion is that there are caps on both individual salaries and total team salaries. There are also anti-circumvention rules. As basketball fans undoubtedly know, the Los Angeles Clippers were recently given a very severe penalty for violating those anti-circumvention rules by using third parties to funnel millions of dollars beyond the official salary to their star player Kawhi Leonard. In saying the penalty is severe, I am not referring to the financial penalty. Leonard was fined $700,000, and Clippers owner Steve Ballmer was fined $30 million. But Leonard's salary for last season was about $50 million, so his fine amounted to less than 1.5% of one year's salary. Ballmer, meanwhile, is a co-founder of Mi...