Inside the NBA investigation into Steve Ballmer's Clippers
On the eve of Clippers training camp, owner Steve Ballmer and the team are facing pressures over an NBA probe into allegations that the team circumvented the league salary cap when a sustainability firm paid star Kawhi Leonard $21 million.
Since purchasing the team a decade ago, Ballmer has been on a quest to bring the also-ran Clippers their first NBA title. The billionaire philanthropist has been alternately encouraged and frustrated with a team that has posted a winning record every season under his ownership, but has made early exits from the playoffs a habit. He also spearheaded the construction of the most technologically advanced and environmentally friendly arena in sports — the $2-billion Intuit Dome that opened a year ago to rave reviews.
Now, a top-rated law firm hired by the NBA is trying to determine whether the team violated league rules by funneling extra money to Leonard through a separate company in which the Clippers’ owner was an investor.
Over the last few weeks, Ballmer has been pressed for details about his $50-million investment and 2%-3% ownership stake in the firm Aspiration Partners, and whether the Clippers knew that the now-defunct company paid millions to Leonard through an endorsement deal. Aspiration provided what the company described as “socially-conscious and sustainable banking services and investment products.”
The Clippers have issued statements forcefully denying wrongdoing and saying they welcome the probe. Leonard and his representatives have not responded to requests for comment.
Read more:Adam Silver says NBA needs clear evidence Clippers made secret deal before lowering boom on Ballmer
“There’s nothing fun about being highlighted in this way,” Ballmer said at a recent forum hosted by the Sports Business Journal. “It’s a whole lot more fun to be highlighted for building a great arena. But this too shall pass.”
A Clippers spokesman said Thursday that they aren’t scheduling any interviews for Ballmer “at the moment,” but Ballmer told the SBJ forum he “feels quite confident … that we abided [by] the rules. So, I welcome the investigation that the NBA is doing.” He stressed his investment in Aspiration came well before it made its deal with Leonard, and that he was not involved in that deal.
The salary cap limits what teams can spend on player payroll to ensure parity and prevent the wealthiest teams from outspending smaller-market teams to acquire the best player. NBA Commissioner Adam Silver has called attempts to circumvent it a “cardinal sin.”
In this case, Leonard agreed to a $28-million contract for endorsement and marketing work for Aspiration, which went out of business in March. Players are allowed to have separate endorsement and other business deals. At issue in this case is whether the Clippers participated in arranging the side deal beyond simply introducing Aspiration executives to Leonard.
The most painful penalties the NBA could impose would be suspending Ballmer for a maximum of one year and docking the Clippers their first-round draft picks for up to five years. The team already is without a first-round pick in 2026 and 2028, having traded them away. Forfeiting the remaining picks through 2032 would make it harder for Ballmer to realize that championship dream.
The maximum fine the league can impose is $7.5 million, a pittance relative to Ballmer’s estimated net worth of $171 billion. Leonard’s performance has fallen short of expectations, so even the league voiding the last two years of his contract would have limited sting, and save the franchise the $100 million owed to the 34-year-old forward.
Proving that the Clippers violated the salary cap could be difficult, as NBA commissioner Adam Silver made clear at a meeting of team owners. Much is riding on the outcome of the investigation.
Ballmer, 69, has forged a strong relationship with Silver, who became commissioner the same year Ballmer bought the Clippers. The 2026 NBA All-Star Game is scheduled to take place at the Intuit Dome in February, and Ballmer chairs the league’s audit committee on the Board of Governors.
Ballmer’s philanthropy is well-established. He and his wife, Connie, have given away billions through their Ballmer Group to improve the economic mobility of children and families in disadvantaged communities. (The Ballmer Group is one of the foundations sponsoring the Los Angeles Times’ early childhood education initiative.)
Ballmer turned his attention to the Clippers in 2014, buying the team from disgraced owner Donald Sterling, who was forced to sell for making racist comments.
The price tag of $2 billion, nearly four times what anyone had previously paid for an NBA team, was considered ludicrous at the time. The value of the franchise has nearly tripled to an estimated $5.5 billion.
Read more:Clippers considered naming dome after bankrupt firm at center of Kawhi Leonard allegations
Bankruptcy documents show that Aspiration paid Leonard $21 million — and still owes him $7 million — after agreeing to a $28-million contract for endorsement and marketing work at the company. The Boston Sports Journal reported that Leonard was also promised a $20-million ownership stake in Aspiration.
There is no record of anything Leonard did on behalf of Aspiration. Several former employees told the Athletic that Leonard’s deal was a “no-show” arrangement in which Leonard wouldn’t have to do any endorsement work.
Former Aspiration chief operating officer and chief legal officer Mike Shuckerow told ESPN that he was one of three company executives who signed a statement that read, “The [Aspiration] team expressed concerns at the time regarding the high cost of the arrangement [with Leonard] and its lack of alignment with Aspiration’s brand and business strategy. While subsequent marketing efforts were undertaken, they were ultimately discontinued and should not be interpreted as support for the deal itself.”
However, former Aspiration CEO Andrei Cherny wrote on X that Leonard’s contract “contained three pages of extensive obligations that Leonard had to perform. And the contract clearly said that if Leonard did not meet those obligations, Aspiration could terminate the contract.”
Aspiration’s initial funding included a $50-million investment in December 2021 from Ballmer, which he has acknowledged. The Clippers also agreed to a 23-year, $300-million sponsorship deal with Aspiration, but turned down its $1-billion offer for naming rights to the new arena. Intuit, the creator of QuickBooks, TurboTax and other widely used applications, paid $550 million.
In December 2022, Clippers minority owner and vice chairman Dennis J. Wong — who was Ballmer’s roommate at Harvard in the 1970s — invested $1.99 million in the company nine days before Leonard received a $1.75-million quarterly payment from Aspiration, according to documents obtained by the Athletic. The Clippers declined to comment about Wong’s investment.
Read more:Steve Ballmer: NBA owner in search of a miracle
In March 2023, Ballmer invested another $10 million, according to the Athletic. The investment contributed to a last-ditch fundraising round by Aspiration at a time it was nearly out of cash.
The NBA investigation is now trying to establish whether the Clippers knowingly broke a league rule to slip more money to a player they were already paying the maximum allowed under the salary cap, which makes this situation different than what the league envisioned as motivation for a team to circumvent the salary cap.
Language in the NBA collective bargaining agreement describes skirting the cap as instances where a team pays a player a lower than market salary and makes up for it by paying him some other way in secret. That way the team would have more money under the cap to pay other players.
The Clippers situation differs because money Leonard made from Aspiration was in addition to the maximum salary he could be paid under salary cap rules and not a way to create cap space for teammates.
Ballmer acknowledged to ESPN that he introduced Leonard to Aspiration executives, but not until after the team had agreed to a contract extension with Leonard and the $330-million sponsorship deal with Aspiration.
“We were done with Kawhi, we were done with Aspiration,” Ballmer said. “The deals were all locked and loaded. Then, they did request to be introduced to Kawhi, and under the rules, we can introduce our sponsors to our athletes. We just can’t be involved.”
Read more:Questions over Kawhi Leonard payments put focus on NBA salary cap
Ballmer was adamant that he knew nothing of the details of the endorsement agreement, that in fact teams are required to stay out of negotiations between players and companies they endorse.
Michael McCann, a sports law expert and a visiting professor at Harvard, said the investigation will center on whether the investments into Aspiration by Ballmer were a quid pro quo for the firm to turn around and give Leonard millions.
Silver has indicated the investigation must demonstrate that the Clippers knew of or participated in Leonard’s deal.
Some experts believe Ballmer is entering the probe with a strong image and could maintain it depending on the outcome of the investigation. “The fact that he’s done a great job, that he’s captivated fans and sponsors, is likely to be in his favor as this goes forward,” said David Carter, a professor of sports business at USC and principal of the Sports Business Group.
Silver said the NBA will revisit its investment and endorsement rules as a result of the allegations involving the Clippers, Ballmer and Leonard
Around the league there is a belief that if the NBA does find wrongdoing, Silver will have to act.
“The only thing I hear consistently around the league is that they want the league to come down really hard to deter other teams from [circumventing the salary cap],” said an NBA executive who requested anonymity to speak freely. “Because if there is no big penalty, other teams are going to start doing that, and then competitive advantage is just going to be, the imbalance is going to be out of control.”
Leonard joined the Clippers in July 2019 on a three-year, $103-million contract after leading the Toronto Raptors to the NBA title. The 6-foot-7 forward from Moreno Valley signed a four-year, $176.3-million extension in 2021, when Aspiration made its sponsorship deal with the Clippers and Ballmer became a minority owner in the company.
After signing a three-year, $153-million extension a year ago, Leonard will have been paid or is under contract for $375 million in career salary.
The NBA looked into allegations that the Clippers paid Leonard or his representative and uncle, Dennis Robertson, a side deal when he first joined the team in 2019. No wrongdoing was found, although the Toronto Star recently reported that Robertson made demands of the Raptors during unsuccessful negotiations in 2019. The Raptors rejected the $10-million demand and Leonard signed with the Clippers, the newspaper said.
Neither Robertson nor Leonard’s agent responded to emails or texts asking for comment on the endorsement arrangement with Aspiration and the allegation reported in the Star regarding Robertson.
Times staff writer Broderick Turner contributed to this story.
This story originally appeared in Los Angeles Times.
