Nerlens Noel v. Rich Paul and Klutch

Senator Donut

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Nerlens Noel filed a lawsuit against his former agent Rich Paul and Klutch Sports Group.

Direct link to the lawsuit
News article

Obviously, the idea that Rich Paul has steered clients towards LeBron James (to whom he owes his career, stemming from a chance encounter at the Akron airport) is not a new accusation. It was recently a main subject of a long-form New Yorker article. However, Noel’s claim further asserts that Paul’s dedication to his star players causes him to provide negligent representation to his lesser-known players.

A big part of this story is that Noel turned down the Mavericks’ $70 million dollar contract offer in favor of the qualifying offer, which resulted in Noel signing for the league minimum a year later. Clearly Noel and Paul made the wrong choice, but the most damning allegation is that Paul essentially stopped doing his job on behalf of Noel and he had to do his own legwork to get offers from the Thunder and Knicks.

During the free agent season which began on July 1, 2018, and after Noel’s one-year contract with Dallas expired, neither Paul nor anyone at Klutch Sports presented any real proposals to Noel in terms of strategies or ideas on how Noel might secure a long-term contract or even a significant contract for the following season. Indeed, as the 2018 NBA free agent season began, no real offers or deals were presented to Noel on the first day of free agency.

Nonetheless, Russell Westbrook and Paul George, then of the Oklahoma City Thunder, recruited Noel to come join them and play for the Thunder. As a result, Noel ended up signing a two-year, $3.75 million, league minimum deal with Oklahoma City on July 6, 2018.
Noel learned from his former coach with the 76ers, Brett Brown, who was still with the 76ers, that the 76ers front office had been trying to contact Paul to discuss the possibility of signing Noel to a contract where he would return to the 76ers. However, Paul did not take and/or return any of the calls from the 76ers. Noel also learned that Paul was not returning or taking calls from other team representatives who were interested in signing Noel for their respective teams.
On the first day of the free agency period, and despite the prior representations of Mr. Newton, Noel did not hear from a single team. Noel spoke with Mr. Newton that night, and Mr. Newton advised Noel that the Oklahoma City deal was still in play and that they were just trying to move money around on the books to create cap space for the deal. However, Noel later learned that representatives from the Houston Rockets and the Los Angeles Clippers were trying to contact Paul, but that Paul was not taking or returning those calls.
 

djbayko

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Nerlens Noel filed a lawsuit against his former agent Rich Paul and Klutch Sports Group.

Direct link to the lawsuit
News article

Obviously, the idea that Rich Paul has steered clients towards LeBron James (to whom he owes his career, stemming from a chance encounter at the Akron airport) is not a new accusation. It was recently a main subject of a long-form New Yorker article. However, Noel’s claim further asserts that Paul’s dedication to his star players causes him to provide negligent representation to his lesser-known players.

A big part of this story is that Noel turned down the Mavericks’ $70 million dollar contract offer in favor of the qualifying offer, which resulted in Noel signing for the league minimum a year later. Clearly Noel and Paul made the wrong choice, but the most damning allegation is that Paul essentially stopped doing his job on behalf of Noel and he had to do his own legwork to get offers from the Thunder and Knicks.
So 2018 was the free agency period where Lebron James formally announced he would be joining the Lakers. Was Paul derelict in his duties for Noel because he was so busy helping the Kings assemble a team in Los Angeles that he didn't have time for him (pretty bad)? Or was he purposely holding Noel out so that the LA Lebrons could take him off the scrap heap into whatever cap space they had remaining (or at least they'd have him as an option)? And did his advice to turn down $70M have anything to do with that? Now there's your story. Probably impossible to prove.
 

ColonelMustard

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Most respectfully, @djbayko that is conspiracy talk. Klutch manages over $1B of contracts and is now entered into the NFL. Paul also claims that Lebron does not own a stake in Klutch. NBA restricts players from having ownership or a stake in other players, obviously. The league has investigated LeBron's relationship with Klutch (company) and found no behind-the-scenes involvement.

This is a fascinating story and through Paul's incredible rise, he probably has missing company processes and mismanaged clients. This sounds horrific for Noel and you feel for the guy. More so for the impact and productivity of his career. You can never have time back.

For Noel, something doesn't sit right. You got a $70M offer. You got pitched by Klutch that you can make max because of course. You decided to reject that offer and sign with Klutch. You did not play well enough to earn a Max.

And also for Noel, you got your head up your ass? Why aren't you game planning with your agent right after the season ends? If they aren't answering your calls, you show up to the office. Bro has seen 1 episode of Entourage. If you're not getting calls before the first day of your free agency, you are pretty fucked.

This lawsuit also points to Paul's rise being fame and endorsement-driven. Paul received quick contacts through Lebron'. That's why big-name clientele who are looking for multinational corporate endorsements make sense. They already have their own personal trainers, cooks, assistants. Less famous clients may need the structural support some agencies provide.
 
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nighthob

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I mean Noel isn’t the first guy that LeBron/Klutch screwed over. He’s just the first to sue. (And Klutch absolutely is LBJ’s agency no matter how well they keep things tidy on paper.)
 

GB5

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Players hate this, especially ones who used to be the big guy and are down playing for lower money, but it happens routinely at these big agency firms, where for instance Noel would call looking for Paul and get redirected to a junior agent or second or third in command, who Paul has put in charge of dealing with Noel, if Paul is consumed with Lebron. Stunned if that didnt happen here.
 

BigSoxFan

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I can’t stand Paul and his impact on the game but c’mon Nerlens. You’re a one-dimensional player who was offered $70M. Passing that up is on you no matter what you were told or not told. This is where the “max” status gets into players’ heads. Next time just give Jaylen a call and he’ll tell you what to do.
 

lexrageorge

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Maybe the $70M is on Noel, but Klutch still had a fudiciary duty to their client. And part of that duty is returning calls from other teams interested in your client. It's not Noel's responsibility to prod the agency to work on his behalf; that's what the agent's cut is for.
 

jose melendez

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Yeah, this kind of seems like a pretty straight forward failure to represent by Klutch--which doesn't surprise me at all.
 

amRadio

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Not a lawyer, but have worked as a fiduciary, this seems bad for Klutch. They could lose their ability to represent NBA players if the team sources that made Noel aware of the non-returned calls were willing to speak on the record. They'll settle this quickly and give Nerlens his bag to walk away from this.
 

OurF'ingCity

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Maybe the $70M is on Noel, but Klutch still had a fudiciary duty to their client. And part of that duty is returning calls from other teams interested in your client. It's not Noel's responsibility to prod the agency to work on his behalf; that's what the agent's cut is for.
Agreed - to the extent any of his allegations are true. But reading between the likes it wouldn’t shock me if they’re not, or at least not as bad as he’s making it out to be. The Brett Brown stuff, for example, could just be Brown trying to cheer up a guy he used to coach. “Hey Coach how come you didn’t try to sign me?” “Oh, uh…we did and we just never heard back!” My guess is the true story might be something like the Sixers inquired about Noel, and then Klutch didn’t get back to them for a few days by which time the Sixers had moved on. Still not great, but a much closer question as to whether that amounts to a breach of fiduciary duty.
 

nighthob

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I mean Noel’s story is a mirror image of Morris’s. The Knicks kept trying to get Klutch to return a phone call to work out a deal but Klutch never forwarded that information on to their client (eventually the Knicks resorted to talking to Morris directly) as they tried to steer him to San Antonio.
 

snowmanny

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If they aren’t returning calls or aren’t presenting to their clients offers made or they are steering clients to particular teams because it’s better for the agency (or for other clients) then they aren’t doing their job and deserve a lawsuit.
 

HomeRunBaker

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Agreed - to the extent any of his allegations are true. But reading between the likes it wouldn’t shock me if they’re not, or at least not as bad as he’s making it out to be. The Brett Brown stuff, for example, could just be Brown trying to cheer up a guy he used to coach. “Hey Coach how come you didn’t try to sign me?” “Oh, uh…we did and we just never heard back!” My guess is the true story might be something like the Sixers inquired about Noel, and then Klutch didn’t get back to them for a few days by which time the Sixers had moved on. Still not great, but a much closer question as to whether that amounts to a breach of fiduciary duty.
Agreed. What’s the old adage, there are three sides to every story……your side, my side, and the truth.

I expect a stern public statement coming from Paul and/or Klutch by tomorrow if not the end of the day today.
 

Joe D Reid

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Agreed. What’s the old adage, there are three sides to every story……your side, my side, and the truth.
There was a reference in the initial ESPN story that Noel filed the lawsuit after Paul filed a grievance claiming that Noel hadn't paid $100K in commission on his most recent contract. Which both goes to the idea that Paul likely has a different story and gives some insight into why Noel pulled the trigger--getting a bill from the guy who you think screwed you over could be the camel-backbreaker
 

DGreenwood

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Agreed - to the extent any of his allegations are true. But reading between the likes it wouldn’t shock me if they’re not, or at least not as bad as he’s making it out to be...My guess is the true story might be something like the Sixers inquired about Noel, and then Klutch didn’t get back to them for a few days by which time the Sixers had moved on. Still not great, but a much closer question as to whether that amounts to a breach of fiduciary duty.
I don't think that makes the question any closer. An agent who doesn't return a call about one of his free agent clients for a few days isn't doing his job and could be costing his client money. That would be a clear breach of fiduciary duty imo. Things happen too fast in NBA free agency for an agent to take a long weekend off. Calls should be returned within hours in that situation.
 

edoug

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I wonder if the GMs would want to testify if they did try to contact the agents. They hate to admit that they couldn't get their man but probably don't like agents.
 

lexrageorge

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I don't think that makes the question any closer. An agent who doesn't return a call about one of his free agent clients for a few days isn't doing his job and could be costing his client money. That would be a clear breach of fiduciary duty imo. Things happen too fast in NBA free agency for an agent to take a long weekend off. Calls should be returned within hours in that situation.
+1. There is no reason for an agent to not return a call immediately when it concerns his client looking for work. Agents are paid a shit ton of money to aggressively represent their clients in these matters. A few hours is understandable when things are busy; a few days is inexcusable.

I agree with the caveat that we so far are only hearing one side of the story, but the story itself does represent a pattern and is fuel for the "where there's smoke, there's fire" narrative around Klutch.
 

radsoxfan

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Turning down the $70M was a calculated gamble that didn't pay off. Can't sue for that.

Certainly never returning phone calls is a breech of duty (if true), but at the same time, no one thought 70M or anything close to that was actually available after his bad season in Dallas. I don't think anyone was too shocked by the deals he subsequently signed, so hard to imaging he left too much on the table after the initial decision.

In a broader sense, these big agencies (like Scott Boras) almost always are incentivized to push these guys to FA and max out their potential, even if they end up with a few losers like Noel. They have other players that make it big and in the end they come out ahead.

These mid range players should be much more careful turning down big, life changing money. A cautionary tale.
 

HomeRunBaker

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I wonder if the GMs would want to testify if they did try to contact the agents. They hate to admit that they couldn't get their man but probably don't like agents.
I’m guessing everyone will be in full blown “no comment” mode if questioned about this but inside there will certainly be both interest and emotions regarding the outcome.

CB7AFD8E-0DA6-4425-B363-22642A130CA7.jpeg
 

HowBoutDemSox

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Silver is going to want this to go away, quickly and quietly. He doesn't want any more limelight on how the sausage is made. He'll push all parties to settle this before discovery would get into things like when GMs make calls to agents (invariably before the free agent negotiating window actually starts).
 

edoug

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I’m guessing everyone will be in full blown “no comment” mode if questioned about this but inside there will certainly be both interest and emotions regarding the outcome.
I agree Yeah, it puts them in an odd position.
Silver is going to want this to go away, quickly and quietly. He doesn't want any more limelight on how the sausage is made. He'll push all parties to settle this before discovery would get into things like when GMs make calls to agents (invariably before the free agent negotiating window actually starts).
I'm not sure Silver is going to get his wish. Noel is going to want a huge check from somebody. But who is going to give it to him?
 

Kliq

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LeBron running an agency that purposely steers players to take bad deals so they are available to be added to his latest superteam efforts is a conspiracy theory I am ready to hear more about.

It would seem to me that the contract Noel has with Klutch has to come into play as far as what specifically are the duties that Klutch is proving to Noel. I think the stuff about not giving him the same attention as other clients, I think that comes with the territory with signing with a larger agency. The Brett Brown story is very interesting; if Paul was derelict in his duties and that can be proven as a clear defiance of his contract, that will be big. I don't think Noel would file a lawsuit using the Brown information without being pretty confident it was real and not just Brown blowing smoke to Noel.
 

nighthob

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It would seem to me that the contract Noel has with Klutch has to come into play as far as what specifically are the duties that Klutch is proving to Noel. I think the stuff about not giving him the same attention as other clients, I think that comes with the territory with signing with a larger agency. The Brett Brown story is very interesting; if Paul was derelict in his duties and that can be proven as a clear defiance of his contract, that will be big. I don't think Noel would file a lawsuit using the Brown information without being pretty confident it was real and not just Brown blowing smoke to Noel.
If Klutch’s defense is “Our not as large as other agencies agency isn’t competent enough to get back to teams looking to sign our clients” then good luck to them in court.
 

lexrageorge

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If Klutch’s defense is “Our not as large as other agencies agency isn’t competent enough to get back to teams looking to sign our clients” then good luck to them in court.
Yeah, I don't think there's anything in the contract that says Klutch has 2 weeks to get back to teams looking to employ their client.

I mean, it's one thing for an agency to misread a client's market value. Or provide bad advice to that client. But there will be zero defense for ignoring a team's phone calls expressing interest in the client. That is a fundamental duty of the agency just by virtue of being a fudiciary. I honestly don't get why people are making excuses for Klutch if the story about the lack of returned phone calls is correct. It's kind of like a cardiologist forgetting to take an EKG when a patient comes in with chest pains and shortness of breath.
 

nighthob

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I mean Marcus Morris told exactly the same story a couple of years ago, that Klutch kept him on the sidelines while the Lakers tried to decide on whether or not to sign him, and then when LA decided against it tried to steer him to San Antonio. All the while the Knicks were calling with a much better offer and Klutch refused to return those calls. It’s not like we’re discussing 9/11 trutherism here, the Knicks publicly stated that they had to resort to contacting Morris directly because his agents refused to speak to them.
 

lovegtm

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I mean Marcus Morris told exactly the same story a couple of years ago, that Klutch kept him on the sidelines while the Lakers tried to decide on whether or not to sign him, and then when LA decided against it tried to steer him to San Antonio. All the while the Knicks were calling with a much better offer and Klutch refused to return those calls. It’s not like we’re discussing 9/11 trutherism here, the Knicks publicly stated that they had to resort to contacting Morris directly because his agents refused to speak to them.
Yeah, for all the "no front offices will go on the record" we already have front offices on the record on this topic.

Klutch is either malevolent or grossly incompetent.
 

Jimbodandy

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Yeah, for all the "no front offices will go on the record" we already have front offices on the record on this topic.

Klutch is either malevolent or grossly incompetent.
I think that they focus their resources on their bigger, higher profile clients and that it's a feature, not a bug. Guys like Noel and Morris will occasionally be casualties to their big baller negotiating tactics, because teams don't sit around waiting on answers from guys like that. Frankly, I'm not sure that the bad press hurts the Klutch brand. Attract fewer middle class guys, sure, but probably attract future stars who now know that you'll prioritize stars like them.
 

Cesar Crespo

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I think that they focus their resources on their bigger, higher profile clients and that it's a feature, not a bug. Guys like Noel and Morris will occasionally be casualties to their big baller negotiating tactics, because teams don't sit around waiting on answers from guys like that. Frankly, I'm not sure that the bad press hurts the Klutch brand. Attract fewer middle class guys, sure, but probably attract future stars who now know that you'll prioritize stars like them.
It's possible it could attract future stars if those future stars are 100% confident in their ability to get the max.

This is a league wide problem too, though. The max was created so that the middle tier guys would get paid. Some are still getting $$ and years (Allen, Smart) but they are generally on the younger side and/or coming off their rookie contract. Then there are others who are just getting am overpay for a year or two (and probably make less overall money in the long run) so teams can roll over cap space and try to build a team of super friends.

The Max is probably here to stay because I don't see how getting rid of it would benefit non superstars, but the max is benefiting them less every year it seems like. It would be nice if it ever got to the point they would abolish the max. It would make the league more competitive and it would probably eliminate a lot of the "tampering."

That's a side rant though. I think this could hurt Klutch if other people come out and complain. It won't sink them, but it could cause them to change their priorities.

Serious question, could any top sports agency live off just high profile clients? I guess if you had an absurd amount of them. There are only ~50 max contracts in the NBA. It seems an agency would need some lesser profile clients. I know Nike signs endless people to shoe deals at cheapish money in case one of those players does break out. It's +EV in the long run. If I were entering the NBA draft, I wouldn't be looking at Klutch. If I was in the last year of my rookie deal and I was looking at a max contract, maybe I'd look to switch to Klutch and I'd probably get far favorable terms.

Anyway, I'm sure some of this is just sour grapes from Noel but he might have a legit gripe.
 

Swedgin

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Yeah, for all the "no front offices will go on the record" we already have front offices on the record on this topic.

Klutch is either malevolent or grossly incompetent.
There is also this thing called discovery in lawsuits. Given the allegations, Noel's attorneys should have no trouble getting phone/txt records, emails etc from both Klutch and certain teams during the relevant time frames.
 

Smokey Joe

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I think that they focus their resources on their bigger, higher profile clients and that it's a feature, not a bug. Guys like Noel and Morris will occasionally be casualties to their big baller negotiating tactics, because teams don't sit around waiting on answers from guys like that. Frankly, I'm not sure that the bad press hurts the Klutch brand. Attract fewer middle class guys, sure, but probably attract future stars who now know that you'll prioritize stars like them.
But that is not the way things work. The reputation that they get is not positive, (oh they sacrifice everything for their top clients.), it’s negative. (They screw their clients.). Sure they will get clients who are dumb enough to think “That won’t happen to me”, but the bulk of the young upcoming stars are going to go to agents who will prioritize them just as much as Klutch does their clients, but without the bad rap.
 

ColonelMustard

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So 2018 was the free agency period where Lebron James formally announced he would be joining the Lakers. Was Paul derelict in his duties for Noel because he was so busy helping the Kings assemble a team in Los Angeles that he didn't have time for him (pretty bad)? Or was he purposely holding Noel out so that the LA Lebrons could take him off the scrap heap into whatever cap space they had remaining (or at least they'd have him as an option)? And did his advice to turn down $70M have anything to do with that? Now there's your story. Probably impossible to prove.
Serious question, could any top sports agency live off just high profile clients? I guess if you had an absurd amount of them. There are only ~50 max contracts in the NBA. It seems an agency would need some lesser profile clients. I know Nike signs endless people to shoe deals at cheapish money in case one of those players does break out. It's +EV in the long run. If I were entering the NBA draft, I wouldn't be looking at Klutch. If I was in the last year of my rookie deal and I was looking at a max contract, maybe I'd look to switch to Klutch and I'd probably get far favorable terms.
Good points all around on max. I would think that Klutch also gets a cut of endorsement deals, investment opportunities that they help negotiate.
 

nighthob

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I think that they focus their resources on their bigger, higher profile clients and that it's a feature, not a bug. Guys like Noel and Morris will occasionally be casualties to their big baller negotiating tactics, because teams don't sit around waiting on answers from guys like that. Frankly, I'm not sure that the bad press hurts the Klutch brand. Attract fewer middle class guys, sure, but probably attract future stars who now know that you'll prioritize stars like them.
With all due respect one agent at Klutch can negotiate every single superstar contract in 15 minutes. I mean as in all of them, not per deal. “My client needs a max deal, he’s a superstar.” Literally the only negotiating agents have to do is for sub-max guys. So, again, if Klutch’s defense is “We’re not competent to be agents for any player that requires us to actually do our job” then good luck to them in court.
 

ManicCompression

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Paul's client list is also not really a who's who of the NBA: https://basketball.realgm.com/info/agent-client-list/Rich-Paul/258 (I believe this is an accurate list, so correct me if I'm wrong).

He has Lebron, Davis, Draymond, and Ben Simmons, but the rest of his clients are not even all-star level players. Edwards and Garland could pop, but a lot of these guys are just run of the mill, Nerlens Noel level players getting between $5 and $20 million a year (the Nurkic/Trent Jr. types).

I think you could argue that big time players don't want Lebron's agent because they'll never be his top priority. It seems like he mostly operates in this mid to lower tier, so I see this lawsuit as having a possible noticeable effect on his book of business if it goes anywhere.

Edit: In terms of examples, if you're Montrezl Harrell right now, how confident are you right now that you got the best possible contract last offseason? If you're Terence Ferguson or Jalen Lecque or even Dion Waiters, are you wondering if you'd be in the NBA right now if you had a different agent? Each scenario is different but I'd have doubts after hearing these Noel stories
 

sezwho

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Good points all around on max. I would think that Klutch also gets a cut of endorsement deals, investment opportunities that they help negotiate.
The max value and length also exist because owners don’t trust themselves so create guard rails. stepien rule is another example.

Fwiw, I’d abolish max as well just to watch what happens. Which owner would give the next lebron / KD / MJ 80-100m? Should/would they take the $ and play with nobodies? Fun!

Maxes are here to stay for both sides.
 

tbb345

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Kind of surprised reading some of the reactions on this thread (also wondering if some posters even read the entire article or just looked at the $70 mil thing).

It’s obviously on Noel for turning down the $70 mil but it’s pretty negligent/incompetent on Paul’s part if he’s not relaying actual offers from teams to clients.

This article definitely doesn’t stop the criticism/rumors that Klutch, and Paul specifically, are basically just LeBron’s bag men doing his bidding
 

benhogan

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The max value and length also exist because owners don’t trust themselves so create guard rails. stepien rule is another example.

Fwiw, I’d abolish max as well just to watch what happens. Which owner would give the next lebron / KD / MJ 80-100m? Should/would they take the $ and play with nobodies? Fun!

Maxes are here to stay for both sides.
would the CAP still exist?
 

Cesar Crespo

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would the CAP still exist?
Yeah. Otherwise the Lakers or Knicks can just buy everyone and there is little strategy involved.

A salary cap with max contracts makes little sense from a competitive standpoint. A salary cap with no max contracts makes a lot of sense.
 

lexrageorge

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The max is here to stay. Too many players and owners like it.

And @nighthob is correct that the courts will not care about how busy the fiduciary is when it comes to carrying out fiduciary duty, especially when that duty means taking 10 minutes (if that) to return a phone call. Nor is it typical behavior no matter how much we want to excuse Klutch for some reason.
 

HomeRunBaker

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The max is here to stay. Too many players and owners like it.

And @nighthob is correct that the courts will not care about how busy the fiduciary is when it comes to carrying out fiduciary duty, especially when that duty means taking 10 minutes (if that) to return a phone call. Nor is it typical behavior no matter how much we want to excuse Klutch for some reason.
Whoa! PLAYERS like it? Unless I’m misunderstanding how would players like to have their salaries capped? On a true open market there are 30-40 players who would be blowing away what their current max slot is capped at.
 

Cesar Crespo

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Whoa! PLAYERS like it? Unless I’m misunderstanding how would players like to have their salaries capped? On a true open market there are 30-40 players who would be blowing away what their current max slot is capped at.
All players except those 30-40.
 

nighthob

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Whoa! PLAYERS like it? Unless I’m misunderstanding how would players like to have their salaries capped? On a true open market there are 30-40 players who would be blowing away what their current max slot is capped at.
Right, take away the max cap and the other 400 players make a lot less.
 

Euclis20

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All players except those 30-40.
Exactly, and I think it's quite a bit less than 30-40 players. What borderline all-stars would be getting over the max? Here is who the Athletic had in their Tier 3b ranking, which on the overall list would be ranked 24-36 (so, a bit under 30-40):

Beal, Mitchell, Morant, Murray, KAT, Conley, SGA, Simmons, Draymond, Brown, Siakam, Westbrook, LaVine.

A nice mix of guys on their way up and on their way down, but were the max contract to be eliminated, I don't see that group of guys blowing way past the current max. It's basically perennial all-stars and all-nba (1st and 2nd team) guys that suffer under the max. It benefits the rest of the league.