Clippers Under Investigation for Sponsorship Deal with Aspiration
The NBA is investigating a $300 million sponsorship deal between the Los Angeles Clippers and Aspiration, an eco-friendly banking company, which was approved by the league in 2021. This investigation focuses on the possible circumvention of the salary cap to compensate Kawhi Leonard, the team’s star. According to sources close to the situation, the Clippers submitted the 23-year agreement to the NBA for approval, a requirement because it included a patch on the team’s jersey. The agreement also included advertising in the Clippers’ future stadium in Inglewood. In April 2022, Aspiration signed a separate $28 million sponsorship deal with Leonard, which was not subject to NBA review. The NBA’s investigation seeks to determine whether the Clippers and their owner, Steve Ballmer, violated league rules by circumventing the salary cap to compensate Leonard.The league’s operations manual for the 2021-22 season specifies that teams must notify and obtain NBA approval before formalizing these types of agreements. The manual even details the dimensions and location of the patch on the uniform. In September 2021, Ballmer invested $50 million in Aspiration. In April 2022, the company signed a sponsorship deal with Leonard, an agreement that, according to a company employee, sought to circumvent the salary cap. Ballmer denied having knowledge of Leonard’s contract and stated that he did not instruct the company to sign it. NBA rules do not prohibit teams from introducing their sponsors to players, but they cannot participate in subsequent negotiations. Aspiration’s logo did not appear on the Clippers’ jerseys at the start of the 2023-24 season, after the team’s deal with Honey expired. 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 ended their sponsorship agreement with Aspiration “last season.” Aspiration declared bankruptcy in March, with a reported debt of $170 million. The company claimed it owed the Clippers $30 million, the largest amount owed to its creditors. In August, Aspiration co-founder Joe Sanberg pleaded guilty to two counts of wire fraud. Federal prosecutors accused Sanberg of defrauding 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 recorded by the company. Ballmer has been reviewing his interaction with Aspiration as part of his cooperation with the Department of Justice’s investigation. Sources familiar with the league’s sponsorship review process indicated that the review focuses on the company’s credibility and its ability to meet its financial commitments. The NBA has hired the law firm Wachtell Lipton, Rosen & Katz to investigate whether the Clippers circumvented salary cap rules. The investigation is expected to last for months and could extend beyond the 2026 NBA playoffs. According to the terms of the NBA’s collective bargaining agreement, Commissioner Adam Silver is not solely responsible for deciding whether to sanction the Clippers, depending on the findings. Wachtell Lipton will present its findings to the league office, and Silver will have to 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 arbitrator will examine what was presented by Silver and decide on the next step. The arbitrator could grant Silver the authority to punish the Clippers or decide that there is not enough evidence to justify any sanction and deny him the possibility of imposing sanctions on the team. Silver stated that the responsibility lies with the league if a team, owner, player, or any league member is to be sanctioned.The agreement requires the explicit approval of the NBA.
Official league documents
