Steve Ballmer and the Los Angeles Clippers are facing scrutiny after a report alleged the team funneled $28 million to star player Kawhi Leonard through an endorsement deal designed to circumvent NBA salary cap rules.
A new investigation from former ESPN reporter Pablo Torre focuses on a $28 million endorsement deal in 2022 between Leonard, one of the NBA’s biggest stars, and Aspiration, a sustainability company that filed for bankruptcy earlier this year.
Torre, who interviewed former Aspiration employees, reported that the deal helped the Clippers evade the NBA’s salary cap.
The arrangement between Leonard and Aspiration was allegedly a “no-show job” contract, Torre reported.
One month after the Clippers signed Leonard to a $176.3 million extension in August 2021, Ballmer personally invested $50 million into Aspiration, according to Torre. That same September, Aspiration also announced a $300 million sponsorship deal with the team.
The NBA said it is investigating the matter.
In a statement to GeekWire, the Clippers and Steve Ballmer denied the allegations. Here’s the statement in full:
“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.
After a long campaign of market manipulation, which defrauded not only Steve but numerous other investors and sports teams, Aspiration filed for bankruptcy. Its co-founder, Joseph Sanberg, recently pleaded guilty to a $243 million fraud. 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.
There is nothing unusual or untoward about team sponsors doing endorsement deals with players on the same team. Neither Steve nor the Clippers organization had any oversight of Kawhi’s independent endorsement agreement with Aspiration. To say otherwise is flat-out wrong.
The Clippers take NBA compliance extremely seriously, fully respect the league’s rules, and welcome its investigation related to Aspiration. The Clippers will also continue to cooperate with law enforcement in its investigation into Aspiration’s blatantly fraudulent activity.”
Aspiration, which offered banking and other services for sustainability-related initiatives, filed for Chapter 11 bankruptcy in March. The company’s co-founder, Joseph Sanberg, was charged last month and agreed to plead guilty to defrauding investors and lenders.
Potential penalties for skirting NBA salary cap rules can involve fines, loss of future draft picks, or even voiding contracts, as seen in the league’s 2000 punishment of the Minnesota Timberwolves.
The NBA previously investigated complaints involving Leonard and improper benefits.
Ballmer, who led Microsoft as CEO from 2000 to 2014, bought the Clippers in 2014 for $2 billion, which was a record at the time. The team is now worth $5.4 billion, the eighth-most valuable NBA franchise, according to CNBC. Ballmer’s net worth is more than $174 billion, according to Bloomberg.
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