Sources: WNBA is investigating Las Vegas Aces for circumventing the salary cap

The WNBA, through a spokesperson, told The Next on Wednesday afternoon: “The WNBA is currently conducting an investigation involving the Las Vegas Aces in connection with allegations raised in a recent social media post by Dearica Hamby.”

On Wednesday night, the Las Vegas Aces released a statement acknowledging that they “are aware of the formal investigation launched today by the WNBA regarding Dearica Hamby.” The team statement further promised to assist the league with all information requested.

According to those familiar with the allegations, the pattern alleged that the team followed typically involved a high-level member of the Aces instructing the agent of a potential signing — either a free agent, or an Aces player negotiating an extension — that at the conclusion of the phone call between team and agent, the agent would receive a call with an offer for a specific amount of money from a particular, pre-selected company. The work involved would be negligible, according to those familiar with the allegations.

Any attempt to do so would appear to circumvent the WNBA’s hard salary cap, in a way specifically spelled out in the current collective bargaining agreement. Article XV of the CBA specifically addresses circumvention, and defines one such violation of it in Section 1(b) as follows:

“It shall constitute a violation of Section 1(a) above for a Team (or Team Affiliate) to enter into an agreement or understanding with any sponsor or business partner or third party under which such sponsor, business partner or third party pays or agrees to pay compensation for basketball services (even if such compensation is ostensibly designated as being for non-basketball services) to a player under Contract to the Team. Such an agreement with a sponsor or business partner or third party may be inferred where: (i) such compensation from the sponsor or business partner or third party is substantially in excess of the fair market value of any services to be rendered by the player for such sponsor or business partner or third party; and (ii) the Compensation in the Player Contract between the player and the Team is substantially below the fair market value of such Contract.”

For teams and agents alike, the stakes inherent in how the league responds to these allegations, if proven, are as significant as the allegations themselves. The defending champions managed to add Candace Parker and Alysha Clark to their title-winning roster, each making significantly less in salary than they did in 2022 for the Chicago Sky and Washington Mystics, respectively.

“It’s obvious that whenever a team has success, there’s a certain amount of sour grapes involved,” one league source described the response across the league to Las Vegas’ actions during the recent free agency period. “This is extremely not that.”

What happens next will have ramifications for the league itself that are nearly incalculable. If the Aces are found to have done this, the league faces a difficult choice. The more pain inflicted, publicly, on Las Vegas and some of the signature stars of the league will bring negative publicity, while renewing focus on the league’s salaries. The league has often hesitated to make public even the punishments it has dealt out — for instance, the $500,000 fine of the New York Liberty for chartering flights last season was only acknowledged by the league once it was reported by a media member. 

Moreover, any penalty that punished the team with a voided contract would simultaneously punish the player involved.

Still, there are also some around the league who worry any publicity around a punishment itself would only benefit the Aces — as one league source put it, “That was the best $500,000 [Liberty owner] Joe Tsai ever spent”, though three separate league sources made clear they view this allegation as several orders of magnitude more serious than the Liberty deploying charter flights for their team last season.

Add Locked On Women’s Basketball to your daily routine

Here at The Next, in addition to the 24/7/365 written content our staff provides, we also host the daily Locked On Women’s Basketball podcast. Join us Monday through Saturday each week as we discuss all things WNBA, collegiate basketball, basketball history and much more. Listen wherever you find podcasts or watch on YouTube.

That the value of employing the best players and winning in the WNBA has now outstripped any financial penalty the league can impose on owners who break the rules is a competitive balance issue the league is going to have to reconcile as long as the salary cap remains at or near its current level, which it is legally set for, with small increases, through the end of the current CBA in 2027.

And what happens if the league, should it turn out that the Aces engaged in this practice, chooses not to punish Las Vegas in ways that would actually prove punitive for the franchise — namely, voided contracts, loss of roster spots and cap room, as suggested by multiple league sources to The Next?

Multiple agents have begun pushing other teams to adopt such arrangements already, three WNBA front office members told The Next. If the league either allows it, or imposes a penalty sufficiently weak to render it useless as a deterrent, teams are already preparing to adapt.

“Then we know what the rules of the game are, and it’s time to catch up,” one front office member told The Next.

(More league reaction to come, along with analysis of what it means, in today’s edition of The IX Newsletter.)