NBA Investigates Clippers’ Sponsorship Deal with Aspiration and Possible Salary Cap Circumvention
The NBA is conducting an investigation into a sponsorship deal between the Los Angeles Clippers and the green banking company Aspiration, following the approval of a $300 million deal in 2021. The investigation focuses on whether the team and its owner, Steve Ballmer, may have circumvented salary cap rules to compensate star player Kawhi Leonard. Sources close to the situation revealed that the Clippers submitted the 23-year agreement to the NBA for approval before its announcement in September 2021, as required by league rules due to the inclusion of a jersey patch. The agreement also included advertising in the team’s future stadium in Inglewood. In April 2022, Aspiration signed a separate sponsorship agreement with Leonard for $28 million, which was not subject to NBA review, according to the league’s collective bargaining agreement. The NBA commissioner, Adam Silver, initially stated that he had not heard of the company Aspiration, but then modified his comments, claiming to be aware of the brand. The NBA requires the review of certain sponsorship agreements, such as those including patches on jerseys and visible advertising on television broadcasts. Agreements with companies related to cannabis, gaming, and energy drinks are also subject to review.According to official league documents, NBA approval is explicitly necessary for patch sponsorship agreements on jerseys. The league’s operations manual for 2021-22 specifies that teams must notify and obtain NBA approval before formalizing such agreements. In September 2021, coinciding with the announcement of the agreement between the Clippers and Aspiration, Ballmer invested $50 million in the company. In April 2022, Aspiration reached a $28 million sponsorship agreement with Leonard, an agreement that, according to an employee of the company, aimed to circumvent the salary cap. Ballmer denied having knowledge of Leonard’s contract and having directed the company to carry it out. NBA rules do not prohibit teams from introducing their sponsors to players, but they cannot participate in subsequent negotiations. The league does not review sponsorship agreements with players. Aspiration’s logo was scheduled to appear on the Clippers’ jerseys at the start of the 2023-24 season, but it did not materialize. In January 2024, it was reported that Aspiration was the subject of an investigation by the Department of Justice and the Commodity Futures Trading Commission. The Clippers reported that they had terminated their sponsorship agreement with Aspiration the previous season. Aspiration declared bankruptcy in March with a debt of $170 million. The company 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 claimed that Sanberg defrauded investors and lenders of $248 million. Ballmer stated that he was reviewing his interaction with Aspiration as part of the team’s cooperation with the Department of Justice investigation. Sources close to 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 circumvented salary cap rules. The investigation is expected 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 results. Wachtell Lipton will present its findings to the league office, and Silver must decide whether to present any evidence to a neutral arbitrator appointed by the NBA and the National Basketball Players Association. The referee will examine the evidence and decide on the next steps. He could grant Silver the authority to punish the Clippers or determine that there is not enough evidence to justify any sanction.Teams evaluate their own sponsorship partners and negotiate their own sponsorship deals. Given the inclusion of the patch on the players’ jerseys and its level of exposure in match broadcasts, the league reviews and approves jersey patch deals in accordance with league rules that are intended to avoid potential branding issues or conflicts with league associations.
Mike Bass, NBA spokesman
The burden falls on the league if we are going to discipline a team, an owner, a player, or any constituent member of the league. I think, as with any process that requires a fundamental sense of fairness, the burden should fall on the party that, in essence, brings those charges.
Adam Silver, NBA commissioner
