Anyone who knows me in real life knows that I’m a huge baseball fan (next year is our year, fellow Nationals fans). I follow the NFL because the rest of my family does (this is our year, Ravens flock). I don’t follow any basketball teams at all except when rooting for the underdog during March Madness.
But then the NBA announced a massive sanction on the LA Clippers and its billionaire owner Steve Ballmer after releasing the internal investigation report by Wachtell Lipton.
That piqued my interest.
I read the report and it’s very, very good. It’s worth breaking down why.
What Happened
If you missed the story, the NBA sanctioned the Clippers (forfeited 5 first round draft picks and a $30m fine), and also Ballmer and the President of Basketball Operations Gillian Zucker (one-year-long suspension) for violating the league’s “circumvention rules.” Those rules aim to prevent teams from getting around the salary cap by facilitating deals between players and team sponsors or anyone else.
A podcast called Pablo Torre Finds Out first broke the story a year ago and won a Pulitzer Prize for it. The NBA hired New York law firm Wachtell Lipton to conduct the investigation. This week, the NBA released Wachtell’s report at the same time it announce the severe sanctions. The report found multiple intentional violations of the circumvention rules following a year long investigation.
Breaking Down the Wachtell Report
Strong executive summary. The executive summary has always been a key part of investigation reports but in our short attention span culture, I’d argue they are even more important. Bonus points if the results can be summarized in a social media post, I guess. Most readers won’t venture past the executive summary, so it’s crucial to have a tight summary that provides the overview of the investigation and its conclusions. I’ve always found crafting an executive summary to be harder than it should be—it’s a challenge to rise out of the weeds and give an overview with very little nuance. We’re lawyers; we love the nuance. Wachtell’s summary is short and sweet; it gives the genesis of the investigation, a short summary of findings, and then conclusions.
Short report. Wachtell conducted 73 interviews of 60 witnesses and reviewed 200,000 pages of documents. Then it summarized the investigation in 36 pages. That length makes the report readable, which is the point of releasing a public report on such a high-profile matter. The league presumably wanted to be sure the public and other stakeholders understood that it conducted a serious investigation into what happened but was not interested in airing every detail.
Sharp writing (dare I say, almost boring?). The writing in Wachtell’s report is strong but not overwrought. There are few adjectives, so when the report uses them, they stand out. It’s not the most exciting report to read but staying away from invective and characterizations of people (rather than their conduct) gives it credibility. It would have been very easy, I’m sure, to throw in some juicy details from text messages or other sources, but Wachtell wisely avoided them. It’s a good model to follow. Just the facts, ma’am, and all that.
Identifying limitations on the investigation and the report. Wachtell was given a long leash to conduct the investigation, but the report identifies some limits on what it could ultimately do. A private law firm cannot, for example, force third parties to cooperate although the NBA’s rules required the players and team executives to do so. The report also makes clear that it only covers the allegations it could substantiate as true, noting that the report “is not an exhaustive recounting of all the evidence investigators collected in support of the findings. Nor does it reflect work by Wachtell Lipton to investigate public allegations or theories of misconduct by the Clippers or Mr. Leonard that were not ultimately substantiated by the investigative record.”
I’m sure the public would love to know all the dirt but presumably the NBA made a decision to release a report limited to what allegations had been substantiated. A downside to this method is that if there are media stories that the Clippers engaged in other wrongdoing, and Wachtell concluded that there was not reliable evidence of that wrongdoing, the Clippers may prefer that these non-findings be included too.
Credibility determinations. Clients hire law firms to conduct these investigations because they trust the lawyers’ judgment, especially judgment in evaluating the credibility of witnesses. Witness credibility is a slippery thing since it’s not objectively defined and it’s subject to the interviewer’s unconscious biases. I’m always curious how other firms describe their evaluation of witness credibility. This report does a nice job: “In making factual findings, investigators assessed witness credibility in all the customary ways—by evaluating, among other things, demeanor, potential bias, personal motivations, and consistency with other evidence.”
Even better, though, the report mostly relies on whether witness’ recollections match documentary evidence, which is far more persuasive than a single investigator’s gut feeling about whether someone is telling the truth. For example, it describes what two witnesses said and then the documentary evidence and concludes, “[b]ased on the foregoing evidence, investigators find these statements to be inaccurate (at best) with respect to Mr. Ballmer and clearly false with respect to Ms. Zucker.” It’s an effective way to explain why the investigators discounted their recollections and a defense against (see below) inevitable efforts to undermine the report’s conclusions.
One place the report was remarkably restrained was how it described a key witness, Joseph Sanberg, the former CEO of one of the companies here. Earlier this year, Mr. Sanberg was convicted of a large fraud scheme, and it would have been easy to discount what he said completely or detour to describe this fraudulent scheme. Instead, the report makes clear that the firm interviewed him but took what he said with a massive grain of salt. Although the report doesn’t say it outright, it appears that Wachtell only credited his statements when other documents confirmed them.
It relies on patterns to reach conclusions. The report doesn’t hang its conclusions on one suspicious deal. It lays out, for example, how three endorsement agreements, signed within weeks of each other, shared a set of oddly specific characteristics — implausible speed, timing (during Covid), companies with no history of similar deals, and minimal performance obligations relative to the money paid to the player. Patterns make the conclusions more credible. The approach of “show don’t tell” is clear: the report helps the reader see the pattern before it draws the final conclusion.
Clear on responsibility. The report names the three individuals it holds most responsible for the rule-breaking — the team’s owner, its president of business operations, and its president of basketball operations — and does so without diffusing that responsibility across “the organization” as a whole. This is not always easy to do as it can make a client uncomfortable to blame the head of an organization. This investigation is a little different than most corporate internal investigations where the client is the organization itself, so blaming the leaders a bit awkward. The NBA is instead the governing body so it has a bit more freedom to place blame on individual team leaders. (That said, the Clippers’ statement quote below shows the sharp disagreement with the assignment of blame.)
Candid about the process to a certain degree. The report acknowledges that Clippers outside counsel were . . . . challenging (TLDR: The Clippers’ lawyers were a pain in the rear end; Wachtell knows it would do the same thing in their shoes). As the report recounts, the investigation “was challenged by, among other things, the approach of the Clippers and their outside counsel, who at times delayed in responding to requests for information and operated in an adversarial or obfuscatory manner that slowed investigators’ ability to gather the facts. From the perspective of due process, however, the Clippers were zealously represented throughout this investigation by outside counsel seeking to protect the team’s interests and were provided every opportunity to supply any information or arguments to investigators.”
The description of the Clippers’ counsel was prescient. The statement by the Clippers after the release of the report didn’t hold back, saying, “[w]e vehemently reject the NBA’s findings, which are the result of a heavily biased investigation seeking to justify a predetermined narrative rather than facts and evidence. . . For the past year, we cooperated fully and in good faith and we will now fight just as hard to demonstrate our innocence. We intend to vigorously challenge these findings and penalties through every avenue available to us and look forward to an ethical and impartial arbitration process.”
A few other notes
- The findings are presented mostly in a chronological fashion. This is the time-tested way to write a report and usually makes it the most understandable to a reader new to the facts.
- This report does not have a source listed for each fact, but that is typical for a public-facing summary. There’s almost certainly a longer, privileged version prepared for the NBA that does exactly that — both so the league can decide whether the investigation should continue into any unresolved threads, and so the firm has a clear record that every conclusion in the public report is tied to actual evidence, not inference.
- I suspect there was a strong desire by the NBA to have the report issued within a year, so it was released on September 2, 2026—almost a year to the day of the Pablo Torre Finds Out episode. For example, there’s a section about a questionable contract but the report notes, “[t]his confidential information came to investigators late in the investigation, and additional steps are ongoing to corroborate it.”
What next?
As far as I can tell (though I’m no expert in NBA internal rules), there’s no way for the Clippers to appeal the ruling within the NBA. This may be the end of the road, despite the team’s statement that it would “vigorously challenge these findings and penalties through every avenue available.”
Then again, maybe Steve Ballmer knows John Roberts and the highest court in the land can fix this one?