NBA Investigates Clippers’ Sponsorship Deal with Aspiration
The NBA is conducting an investigation into a sponsorship deal between the Los Angeles Clippers and Aspiration, a green banking company. The league approved a $300 million deal in 2021, but it is now being questioned whether the salary cap was circumvented to benefit Kawhi Leonard. Sources close to the situation revealed that the Clippers submitted the 23-year agreement to the NBA for approval, as is required for agreements that include jersey patches. The agreement also included advertising in the team’s future stadium in Inglewood. In April 2022, Aspiration signed a separate $28 million sponsorship deal with Leonard, which was not subject to review by the NBA. The league is investigating whether the Clippers and their owner, Steve Ballmer, violated salary cap rules.The NBA does not require review of all sponsorship agreements, but it does for those involving jersey patches and visible advertising on television broadcasts. Agreements with companies related to cannabis, gaming, and energy drinks are also subject to review. An NBA spokesperson stated that the league reviews and approves jersey patch agreements to avoid branding issues or conflicts with league associations. According to official league documents, NBA approval is explicit for jersey patch agreements. The league’s operations manual for 2021-22 states that teams must notify and obtain NBA approval before any announcement. The manual even specifies the size and location of the patch on the uniform, and also states that the league or team can terminate the agreement if the sponsor is involved in any controversy that could negatively affect the team or the NBA. In September 2021, the same month the Clippers announced their deal with Aspiration, Ballmer invested $50 million in the California-based company. In April 2022, Aspiration reached a $28 million sponsorship agreement with Leonard, a deal that, according to a company employee, “aimed to circumvent the salary cap”. Ballmer denied having knowledge of the sponsorship contract that Aspiration signed with Leonard or having directed the company to do so. NBA rules do not prohibit teams from introducing sponsors or companies to players, but they are not allowed to participate in subsequent negotiations. 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. 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. Ballmer stated that he had been reviewing his interaction with Aspiration as part of his cooperation with the Department of Justice’s investigation into the company. “These guys committed fraud,” he said. “They scammed me. I invested in these guys thinking everything was legal, and they scammed me.” 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 league has hired the law firm Wachtell Lipton, Rosen & Katz to investigate whether the Clippers evaded salary cap rules. The investigation could take months. 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 will have to decide, based on those findings, whether to present any evidence to a neutral arbitrator appointed by the NBA and the National Basketball Players Association. The referee would examine what was presented by Silver and decide on 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 sanction. “The onus is on the league if we’re going to discipline a team, an owner, a player, or any constituent member of the league,” Silver said.NBA Commissioner Adam Silver initially said he “had never heard of the company Aspiration,” although he later revised his comments.
Adam Silver
