The NBA announced on Tuesday that Sarver, who also owns the WNBA's Phoenix Mercury, has been suspended for one year and fined $10million following a 10-month independent investigation.
A scathing 43-page report found Sarver was known to make a number of inappropriate comments to women in the workplace – including discussing oral sex at a business meeting as recently as 2021 – as well as repeating the n-word on five occasions in situations where he claimed he was "recounting the statements of others".
Los Angeles Clippers owner Donald Sterling received a lifetime ban from the league in 2014 over alleged racist comments he made over the phone to an ex-girlfriend, whereas Sarver will be allowed to resume duties in 12 months' time.
NBA commissioner Adam Silver defended that decision on Wednesday, claiming the Sarver and Sterling cases cannot be compared, which led to criticism from high-profile stars James and Paul on social media.
In a series of Twitter posts, Los Angeles Lakers star James said: "Read through the Sarver stories a few times now. I gotta be honest…Our league definitely got this wrong. I don’t need to explain why.
"Y'all read the stories and decide for yourself. I said it before and I'm gonna say it again, there is no place in this league for that kind of behaviour. I love this league and I deeply respect our leadership. But this isn’t right.
"There is no place for misogyny, sexism, and racism in any work place. Don't matter if you own the team or play for the team. We hold our league up as an example of our values and this ain't it."
Twelve-time All-Star Paul, who has played for the Suns since 2020, also questioned the severity of the punishment.
"Like many others, I reviewed the report. I was and am horrified and disappointed by what I read," he wrote on Twitter. "This conduct especially towards women is unacceptable and must never be repeated.
"I am of the view that the sanctions fell short in truly addressing what we can all agree was atrocious behaviour. My heart goes out to all of the people that were affected."
The NBA will donate Sarver's $10m fine to organisations that are committed to addressing race and gender-based issues in and outside the workplace.
In a statement released after the report was published, Sarver said: "While I disagree with some of the particulars of the NBA's report, I would like to apologise for my words and actions that offended our employees.
"I take full responsibility for what I have done. I am sorry for causing this pain, and these errors in judgement are not consistent with my personal philosophy or my values."