NBA Hires Law Firm To Investigate Kawhi Leonard Endorsement Deal
The NBA hired New York-based law firm Wachtell, Lipton, Rosen & Katz to investigate allegations that Kawhi Leonard’s endorsement deal with a tree-planting company called Aspiration was made to circumvent the Los Angeles Clippers salary cap, sources told The Athletic.
Steve Ballmer said he introduced Aspiration to Leonard, though had no knowledge of any endorsement deal. Ballmer then added that he was “conned” by the company.
In addition to the law firm, the NBA will also have its own investigators to consult on the investigation.
Wachtell Lipton is the same law firm that NBA used to investigate misconduct from Donald Sterling and Robert Sarver. Ownership of both the Clippers and Suns would change hands, with owners voting to remove Sterling and Sarver selling the Suns after getting suspended for one year.
Ballmer is the richest owner in the league with a personal worth of $153 billion.
NBA hires law firm to handle investigation into Kawhi Leonard, Clippers endorsement deal
As expected, the NBA has hired an outside law firm to investigate whether the Los Angeles Clippers circumvented the salary cap with a “no-show” endorsement deal for Kawhi Leonard by one of the team’s sponsors.
The NBA has hired the law firm of Wachtell, Lipton, Rosen & Katz, reports Joe Vardon, Sam Amick and Mike Vorkunov of The Athletic. This is the same law firm that investigated the Donald Sterling situation with the Clippers (which ultimately led to the sale to current owner Steve Ballmer) and investigated reports of a misogynistic workplace under former Phoenix Suns owner Robert Sarver, who was ultimately suspended by the league for a year and sold the team.
This case, if proven to the satisfaction of the other owners (who will vote on any potential punishment), would not lead to as severe an outcome as the sale of the team (circumventing the salary cap is serious for the NBA, but not on the level of racism and misogyny). However, the list of penalties prescribed in the NBA CBA includes fines up to $7.5 million, the forfeiture of draft picks, and potentially the voiding of the player’s contract.
This case resolves around an endorsement deal with a Clippers sponsor unearthed by the Pablo Torre Finds Out podcast. The timeline breaks down like this: In September 2021, Ballmer made a $50 million investment in Aspiration, a “green bank” company claiming it was planting trees to gain carbon emissions credits it could pass on to its clients. Later that month, Leonard signed a four-year, $176 million max contract extension with the Clippers. At the Clippers’ media day at the end of that same month, Ballmer announced a $300 million partnership and sponsorship with Aspiration that was in part an effort to make the then-under-construction Intuit Dome “green.” Not long after, Leonard signed a four-year, $28 million endorsement deal with Aspiration. None of that is out of the ordinary (star players signing separate endorsement contracts with team sponsors, with a clause the sponsorship ends if they are traded/leave the team, are relatively common).
Two things make this story take a turn. The big one is that Leonard did nothing for Aspiration, the endorsement was what several Aspiration employees told Torre was a “no-show” job. Leonard never made any public appearances for the company, did not appear in its marketing, nor did he post anything on social media about Aspiration. He got $28 million for doing nothing (Leonards LLC formed for this endorsement is one of the creditors in Aspiration’s bankruptcy, as are the Clippers). The other twist is that Aspiration turned out to be a fraudulent company, one that is under federal investigation, filed for bankruptcy, and its CEO pled guilty to defrauding investors of $248 million.
Steve Ballmer and the Clippers have vehemently denied the allegations and said they did nothing wrong. Ballmer said in an interview with ESPN that he was “duped” by Aspiration and its CEO, as were many other wealthy investors and celebrities. The Clippers said this in a statement:
“Neither the Clippers nor Steve Ballmer circumvented the salary cap. The notion that Steve invested in Aspiration in order to funnel money to Kawhi Leonard is absurd. Steve invested because Aspiration’s co-founders presented themselves as committed to doing right by their customers while protecting the environment… Neither Steve nor the Clippers had knowledge of any improper activity by Aspiration or its co-founder until after the government initiated its investigation. Aspiration was a team sponsor for the 2021-2022 and 2022-2023 seasons before defaulting on its contract.”
Now it comes down to the Wachtell, Lipton, Rosen & Katz investigation and what they find — with the investigation being run by a law firm and reporting to a lawyer himself in NBA Commissioner Adam Silver, the bar for direct, hard evidence will be high. However, there is a flood of circumstantial evidence, and the Clippers or Leonard explaining away a no-show contract will be difficult.
Ultimately, it is the other owners who will decide the punishment for the Clippers and Ballmer, and they want to see this report. The other owners will not want slap on the wrist punishment (like the Knicks got with for tampering with Jalen Brunson) that will signal it is okay to circumvent the cap, but how hard they want to come down on one of their own in a case where he claims plausible deniablity is another question (those owners can think “there but for the grace of God go I”). A lot will come down to what this investigation finds.
Clippers considered naming dome after bankrupt firm at center of Kawhi Leonard allegations
The Los Angeles Clippers take on the Denver Nuggets in an NBA playoff game in April at the Intuit Dome in Inglewood. (Allen J. Schaben / Los Angeles Times)
More details are emerging about a company that allegedly paid Los Angeles Clippers star Kawhi Leonard millions to circumvent the NBA’s salary cap, including that the team came close in 2021 to granting naming rights for its Inglewood arena to Aspiration Partners.
Clippers owner Steve Ballmer nearly granted naming rights to the company, but ended up choosing financial services firm Intuit to grace the $2-billion venue, a source familiar with the matter said. Intuit, which has a $186-billion net worth and developed TurboTax, Credit Karma and QuickBooks, ended up paying a reported $500 million over 23 years for the naming rights.
Four years later, Aspiration, a sustainability firm that also generated and sold carbon credits, is out of business. Co-founder Joseph Sanberg has agreed to plead guilty to defrauding multiple investors and lenders. Listed among creditors in Aspiration’s bankruptcy documents is Leonard, raising questions about whether his $28-million endorsement deal with the company skirted NBA salary cap rules.
One of the investors Sanberg defrauded was Ballmer, listed by Fortune magazine as the sixth-richest person in the world, with a net worth of $157 billion. The Clippers owner invested $50 million in Aspiration, which in turn entered into a $330-million sponsorship agreement with the team.
This week, the Athletic reported allegations that Aspiration agreed to pay Leonard $28 million for a job with no responsibilities, in an effort to circumvent the NBA salary cap. Ballmer was interviewed Thursday night by ESPN’s Ramona Shelburne and denied involvement in Leonard’s deal with Aspiration, but the NBA has launched an investigation.
Ballmer said he was “conned” by the company and that the Clippers did not circumvent NBA salary cap rules, which the team was accused of doing in a podcast report by Pablo Torre of the Athletic.
A plane flies over the Intuit Dome in Inglewood. (Wally Skalij / Los Angeles Times)
Ballmer told Shelburne that Aspiration offered more than Intuit for dome naming rights, and a Clippers spokesman confirmed that account. However, Ballmer insisted that the Clippers did not violate NBA rules against skirting the salary cap, and the team had agreed to a contract extension with Leonard and the sponsorship deal with Aspiration before the player and the company met.
“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.”
The Clippers signed Leonard to a four-year, $176-million contract in August 2021 even though he was recovering from a partially torn ACL in his right knee that kept him sidelined the entire 2021-22 season. Ballmer said the sponsorship deal with Aspiration was completed in September 2021 and that the Clippers introduced Leonard to Aspiration two months later.
“As part of our cooperation with the Department of Justice and Securities and Exchange Commission, we produced texts and emails,” Ballmer said. “It was part of the document production in their investigation. We even found the email that made the first introduction [between Aspiration and Leonard]. It was early in November.
“Where could any of this circumvention happened? It couldn’t have, it didn’t. The introduction got made and they were off to the races on their own. We weren’t involved.”
The Boston Sports Journal reported that Leonard did not appear in promotional material as other endorsers did because Aspiration executives “saw no brand synergy with Leonard and chose not to use his services. They instead preferred to partner with climate-focused influencers.”
Ballmer couldn’t explain why Leonard did no marketing or endorsement work for Aspiration, telling Shelburne that he never spoke with the player about his deal with the company.
“I don’t know why they did what they did and I don’t know how different it is, I really don’t,” he said. “And, frankly, any speculation would be crazy. These were guys who committed fraud. Look, they conned me. I made an investment in these guys thinking it was on the up-and-up and they conned me. At this stage, I have no ability to predict why they did anything they did.”
The salary cap is a dollar amount that limits what teams can spend on player payroll. The purpose of the cap is to ensure parity, preventing the wealthiest teams from outspending smaller markets to acquire the best players.
Circumventing the cap by paying a player outside of his contract is strictly prohibited. Teams that exceed the cap must pay luxury tax penalties that grow increasingly severe. Revenues from the tax penalties are then distributed in part to smaller-market teams and in part to teams that do not exceed the salary cap.
The NBA said it will investigate the allegations laid out by Torre. Ballmer said he welcomes the probe. If allegations were made against a team other than the Clippers, “I’d want the league to investigate, to take it seriously,” he said.
“We know the rules, and if anything is not clear, we remind ourselves what the rules are. And we make it absolutely clear we will abide by those rules.”
The cap was implemented before the 1984-85 season at a mere $3.6 million. Ten years later, it was $15.9 million, and 10 years after that it had risen to $43.9 million. By the 2014-15 season it was $63.1 million.
The biggest spike came before the 2016-2017 season when it jumped to $94 million because of an influx of revenue from a new nine-year, $24-billion media rights deal with ESPN and TNT.
Salary cap rules negotiated between the NBA and the players’ union are spelled out in the Collective Bargaining Agreement. Proven incidents of teams circumventing the cap are few, with a violation by the Minnesota Timberwolves in 2000 serving as the most egregious.
The Timberwolves made a secret agreement with free agent and former No. 1 overall draft pick Joe Smith, signing him to a succession of below-market one-year deals in order to enable the team to go over the cap with a huge contract ahead of the 2001-02 season.
The NBA voided his contract, fined the Timberwolves $3.5 million, and stripped them of five first-round draft picks — two of which were later returned. Also, owner Glen Taylor and general manager Kevin McHale were suspended.
Then-NBA commissioner David Stern told the Minnesota Star Tribune at the time: “What was done here was a fraud of major proportions. There were no fewer than five undisclosed contracts tightly tucked away, in the hope that they would never see the light of day. … The magnitude of this offense was shocking.”
According to Article 13 of the CBA, if the Clippers were found to have circumvented the cap, it would be a first offense punishable by a $4.5-million fine, the loss of one first-round draft pick, and voiding of Leonard’s contract. However, the Clippers don’t have a first-round pick until 2027.
Bulls reportedly have four-year, $88 million offer on table for Josh Giddey, still well below what he seeks
Chicago’s stumbling point is simple: Just more than a year ago, the Bulls gave an unproven Patrick Williams a five-year, $90 million contract ($18 million a season), based on his potential (the front office really believes in him). So what is a proven scorer and shot creator like Josh Giddey worth to them?
About $22 million a year, ESPN’s Bobby Marks reports. He said Chicago has an offer of four years, $88 million is on the table for Giddey — not that much more than Williams and well below the closer to $30 million a season Giddey is reportedly looking to make. That $88 million number is up slightly but largely in line with previous reporting of the Bulls offering around $20 million a season for the 6’8″ point guard.
Giddey has yet to accept the Bulls’ offer, with an Oct. 1 deadline looming in the distance for him to pick up the one-year, $11.1 million qualifying offer, play out this season in Chicago, and become a free agent next summer (the path Brooklyn’s Cam Thomas has already taken).
Giddey believes he should be paid in the Derrick White and Tyler Herro range of around $30 million a season. His case is based on how he played after the All-Star break last season, when he averaged 21.2 points, 10.7 rebounds and 9.3 assists a game for a Bulls team that went 17-10 in that stretch. The Bulls may not be as convinced by that stretch of play, and in the bigger picture, they are trying to clean up their books and gain flexibility. While Giddey knows how to run their offense, he is not a great defender and needs to show his hot shooting from 3-point range after the All-Star break last season (45.7%) was not a fluke (he is a career 33% shooter from deep).
The other question Giddey and his representatives need to ask themselves: Will the money he wants be available next summer? While there are expected to be up to 10 NBA teams with considerable cap space, are they going to want to spend a lot of that on Giddey? His perception in league circles is that of a good player but not a contending team franchise cornerstone, more of an 82-game player than a 16-game player. If Giddey were to take the qualifying offer, he would have a season to prove his doubters wrong with his play.
Most likely, both Giddey and the Bulls will compromise as we get closer to training camp. Neither side wants to go the qualifying offer route, but the Bulls have all the leverage in these talks while Giddey just has the one card to play. The closer we get to Oct. 1 without a deal, the more realistic that option becomes.
Lauri Markkanen Could Become NBA’s Most Interesting Trade Candidate
Lauri Markkanen was a constant in trade rumors during the 2024 offseason before signing a five-year, $238 million renegotiate-and-extend contract with the Utah Jazz. After a disappointing 2024-25 season where his PER dropped from 21.2 to 15.6, Markkanen was conspicuously absent from trade rumors. If Markkanen has a bounce back season following his impressive performances in EuroBasket, Zach Lowe contends the Jazz could
“If that dude rebuilds his trade value, because he’s got a big contract over a lot of years, he is the most interesting trade candidate in the NBA,” said Lowe on his podcast. “In three, four months, if this continues and if Utah loses as much as I would expect them to lose.”
ESPN’s Brian Windhorst reported in March that the Jazz promised Markkanen “a timely turn toward competing” when signing the extension in August 2024. The Jazz have further stripped down their roster this offseason in a competitive Western Conference.
Markkanen is signed through the 2028-29 season and is 28 years old.
Olivier-Maxence Prosper, Grizzlies Agree To Two-Way Contract
Olivier-Maxence Prosper and the Memphis Grizzlies have agreed to a Two-Way contract. Prosper was recently waived-and-stretch by the Dallas Mavericks due to a roster crunch.
Prosper was a first round pick by the Mavericks in 2023. In 52 games last season, Prosper averaged 3.9 points and 2.4 rebounds in 11.2 minutes.
