NBA Investigates Clippers’ Sponsorship Deal with Aspiration and Possible Salary Cap Circumvention
The NBA is investigating a sponsorship deal between the Los Angeles Clippers and Aspiration, a green banking company, which may have violated salary cap rules. This deal, worth $300 million, was approved by the league in 2021, months before Aspiration signed a contract with Clippers star Kawhi Leonard. According to sources, the Clippers’ sponsorship agreement with Aspiration, which included a jersey patch and signage in the team’s future arena, was submitted for NBA approval, as required by league regulations for agreements involving jersey patches. The NBA is examining whether the Clippers and their owner, Steve Ballmer, violated salary cap rules to compensate Leonard. NBA Commissioner Adam Silver initially claimed to be unfamiliar with the company Aspiration, but later corrected his comments, admitting to being aware of the brand. The league does not require that all sponsorship agreements be reviewed, but certain types, such as those involving patches on jerseys and visible signage on television broadcasts, are subject to stricter rules and league approval.A Clippers spokesperson referred questions about the league’s process to the NBA. The league’s operations manual for the 2021-22 season specifies that teams must notify and obtain NBA approval before entering into such an agreement. The manual also dictates the size and location of the patch on the uniform and states that the team cannot announce any patch agreement unless the patch sponsorship agreement, the jersey patch, and the announcement have been pre-approved by the NBA. The manual also specifies provisions that must be included in a contract between a team and the patch sponsor. One of those provisions states that the league or team can terminate the agreement if the sponsor “becomes involved in any controversy or scandal that has or may have a negative effect on the business, reputation, or public perception of [the team] or the NBA”. Ballmer invested $50 million in Aspiration in September 2021, the same month the Clippers announced their deal with the company. In April 2022, Aspiration signed a sponsorship deal with Leonard for $28 million. Ballmer denied having knowledge of the sponsorship contract that Aspiration signed with Leonard or of having directed the company to do so. NBA rules do not prohibit teams from introducing players to sponsors, but teams cannot participate in subsequent negotiations. According to the collective bargaining agreement, the league does not review sponsorship agreements with players. The Aspiration logo was supposed to appear on the Clippers’ jerseys at the start of the 2023-24 season, but it didn’t. In January 2024, it was reported that Aspiration was being investigated by the Department of Justice and the Commodity Futures Trading Commission for allegedly deceiving its customers. The Clippers reported that they had terminated their sponsorship agreement with Aspiration “last season”. Aspiration declared bankruptcy in March, with a reported debt of $170 million. The company stated that it owed the Clippers $30 million, the largest amount of all its creditors. In August, Aspiration co-founder Joe Sanberg pleaded guilty to two counts of wire fraud. Federal prosecutors said Sanberg defrauded investors and lenders of $248 million by fraudulently obtaining loans, falsifying bank and brokerage statements, and concealing that he was the source of some income accounted for by the company. Ballmer stated that he was reviewing his interaction with Aspiration as part of his cooperation with the Department of Justice’s investigation into the company. “These guys committed fraud,” Ballmer said. “They scammed me. I made an investment in these guys thinking it was legal, and they scammed me at this stage.” Sources familiar with the league’s sponsorship evaluation process indicated that the review focuses on the company’s credibility and its ability to meet its financial commitments. The league has hired the law firm Wachtell Lipton, Rosen & Katz to investigate whether the Clippers evaded salary cap rules. The investigation is estimated to take months, possibly extending until after the 2026 NBA playoffs. According to the terms of the NBA’s collective bargaining agreement, Silver is not solely responsible for deciding whether the Clippers will be sanctioned, depending on the findings. Wachtell Lipton will present its findings to the league office, and Silver must decide, based on those findings, whether to present any potential evidence to a neutral arbitrator appointed by the NBA and the National Basketball Players Association. The referee would examine what Silver presents and decide the next step. The referee could grant Silver the authority to punish the Clippers or decide that there is not enough evidence to justify any discipline and deny him the ability to impose sanctions on the team. Silver stated that the responsibility lies with the league if a team, an owner, a player, or any constituent member of the league is to be disciplined. He also added that, as in any process that requires a fundamental sense of fairness, the burden should fall on the party that, in essence, brings the charges.Teams evaluate their own sponsorship partners and negotiate their own sponsorship agreements. Given the inclusion of the patch on players’ jerseys and its level of exposure in game broadcasts, the league reviews and approves jersey patch agreements in accordance with league rules designed to avoid potential branding issues or conflicts with league associations.
Mike Bass, NBA spokesman
