Kawhi Leonard, Clippers used endorsement deal to ‘circumvent’ NBA salary cap: Report

Kawhi Leonard allegedly received a lucrative, no-work contract from a now-bankrupt environmental company with direct ties to his team, the LA Clippers, and franchise owner Steve Ballmer so that he could be paid more money without it counting against the NBA’s salary rules, according to accusations made by former employees of the firm to a podcast.

In the latest episode of the “Pablo Torre Finds Out” podcast, which was released Wednesday morning, seven anonymous former employees for San Francisco-based Aspiration, an environmental start-up company partly funded by a $50 million investment from Clippers owner Steve Ballmer, said the four-year, $28 million endorsement deal Leonard received in 2022 was for a “no-show job” intended to “circumvent the (NBA) salary cap.”

“We went through a litany of really, really top-tier name contracts, and then (someone would say), ‘Oh, by the way, we also have a marketing deal with Kawhi Leonard, like a $28 million organic marketing sponsorship deal with Kawhi,’” a person described as a former financial official for Aspiration said on the Torre podcast. “And (they’d say) that if I had any questions about it, essentially don’t (ask), because it was to ‘circumvent the salary cap. LOL.’ There was lots of LOL when things were shared.”

The NBA is “aware of this morning’s media report regarding the LA Clippers and are commencing an investigation,” league spokesman Mike Bass told The Athletic on Wednesday afternoon.

Messages left for Leonard’s business partners were not immediately returned.

The Clippers’ communications team sent the following statement to The Athletic: “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.”

This is the second time in Leonard’s six seasons with the Clippers that accusations have surfaced suggesting he and his business representatives sought improper payments.

According to a 2019 report by The Athletic, the NBA conducted a formal investigation of complaints that Leonard’s uncle and chief business partner, Dennis Robertson, had asked for improper benefits from multiple teams when Leonard was a free agent that summer. Sources at the time said Robertson asked team officials for part ownership of the team, a private plane that would be available at all times, a house and a guaranteed amount of off-court endorsement money that they could expect if Leonard played for their team. League sources with knowledge of that investigation said no evidence was found indicating that the Clippers — who ultimately landed Leonard on a three-year, $103 million contract in the summer of 2019 — had granted any of the lavish requests, but Silver said if further evidence surfaced, the league would reopen its investigation.

Teams and players found by the league to have illegally circumvented the salary cap are subject to fines, loss of draft picks, and even suspensions, as well as the voiding of player contracts. In 2000, the NBA punished the Minnesota Timberwolves and Joe Smith for circumventing the salary cap through a series of one-year deals with the promise of a longer, much richer contract afterwards. Then-commissioner David Stern fined the team $3.5 million, took away five future first-round picks, and suspended then-team owner Glen Taylor and then-chief basketball executive Kevin McHale for a year. Stern also voided all of Smith’s one-year contracts with the Timberwolves, which prevented him from being eligible for the $86 million contract he was to get from the team.

Ballmer is the richest owner in the NBA, with a personal fortune of $153 billion, according to Forbes. Additionally, Ballmer’s Intuit Dome is the host for the 2026 NBA All-Star Game, as well as the basketball tournament site for the 2028 Summer Olympics in Los Angeles.

Four summers before the Leonard-related accusations in the summer of 2019, Ballmer’s alleged handling of a player’s off-court finances first drew the attention of the league office. The Clippers were fined $250,000 in August 2015 relating to the free agency of big man DeAndre Jordan. The league found that the Clippers included a third-party endorsement deal in their pitch to Jordan in the form of a contract with Lexus that would have reportedly paid him $200,000 annually.

Aspiration was a “green bank” that promised to supply carbon credits and plant trees to offset its clients’ carbon emissions. It filed for bankruptcy protection in March after its co-founder, Joe Sanberg, was arrested on charges of wire fraud. Sanberg pleaded guilty last month to defrauding investors of $248 million.

In publicly available bankruptcy filings reviewed by The Athletic, Aspiration’s three largest creditors listed are the Clippers, who say they are owed $30 million by the environmental firm; Forum Entertainment (also owned by Ballmer, claiming it is owed a debt of $11 million); and Leonard’s personal limited liability company, “KL2 Aspire,” claiming a debt of $7 million.

But the Torre podcast, which claims to have reviewed Aspiration’s internal emails and contracts with Ballmer and Leonard, said Ballmer agreed to wire $50 million to the start-up company in September 2021, a month after Leonard signed a team-friendly, four-year, $176 million contract extension with the Clippers. Just weeks after Ballmer agreed to wire the money, the Clippers announced Aspiration as its team sponsor in a 23-year, $300 million deal.

Leonard registered his limited liability company in November 2021 and, according to the podcast, his $28 million contract with Aspiration took effect in April 2022. He could have signed a shorter contract with the Clippers in 2021 that would have allowed him to become a free agent again in 2022 — when he would have been eligible for a $235 million contract. So the four-year deal he agreed to with the Clippers gave the team financial flexibility against the salary cap, as well as the security of knowing their best player was under contract for years.

Leonard again signed a team-friendly deal with the Clippers in January 2024, a three-year, $153 million contract for less money (about $70 million) than he could have earned. The deal was framed as allowing the Clippers to have the financial flexibility to potentially re-sign fellow stars James Harden and Paul George.

According to the Torre podcast, language in Leonard’s endorsement contract with Aspiration gave him “the exclusive right to control and approve all content and distribution,” and gave Aspiration the right to terminate the contract “if Leonard is no longer an employee of the [Clippers] for any reason.”

Additionally, the Torre podcast said, there is no evidence of social media posts, photographs or appearances by Leonard promoting Aspiration, as stipulated in the contract. However, The Athletic found at least one social media post from the Clippers tagging Aspiration and referencing Leonard. (The team did the same for several other players without known ties to Aspiration, and Leonard did not retweet the post.)

Happy Birthday, Kawhi! 🎉

For every comment/retweet, @Aspiration will plant one tree for Kawhi’s birthday! pic.twitter.com/8zvZpj1xic

— LA Clippers (@LAClippers) June 29, 2022

“(Leonard) didn’t have to do anything,” the former finance department official at Aspiration, said on the Torre podcast. “Uncle Dennis demanded payment. It was priority one. It was something that had to be done, and it was crucial to our relationships with Ballmer and the Clippers.”

Robertson, Leonard’s uncle, is listed as the “designated representative” on the contract with Aspiration, according to Torre’s podcast. Messages left for Robertson by The Athletic were not returned.

Per Section 3 of Article XIII, which details the ‘Penalties’ within the section that covers salary cap circumvention, any team that violates league rules for a first time, as well as the player, could face the following outcomes (after their case goes to an Appeals Panel).

• A fine of up to $7.5 million.
• The “direct forfeiture of draft picks.”
• The voiding of the player’s contract, “or any Renegotiation, Extension, or amendment of a Player Contract, between such player and such Team.”
• A fine of up to $350,000 for the player.
• A suspension for up to one year for “any Team personnel found to have willfully engaged in such violation.”
• The voiding of any transaction or agreement found to have violated league rules, and the forced forfeiture of funds received in the deal “unless the player establishes by a preponderance of the evidence that he was unaware of the violation.”

“Pablo Torre Finds out” is an independently produced show licensed by The Athletic and distributed on its podcast network. The Torre podcast signed a licensing agreement with The Athletic Podcast Network last month and the episode released Wednesday is the first under the new partnership.

Law Murray contributed reporting.

(Photo: Ron Chenoy / Imagn Images)