Scandal in Los Angeles Clippers: Are Kawhi Leonard and the team in the NBA’s crosshairs?
A Los Angeles Clippers limited partner allegedly sent nearly $2 million to a company now in bankruptcy. This company allegedly offered Kawhi Leonard a sponsorship deal for “phantom work,” less than ten days before the star player received a payment of $1.75 million. The company in question, Aspiration, would have agreed to a $28 million sponsorship deal with Leonard in 2021. Clippers owner Steve Ballmer invested $50 million through his personal LLC in September 2021, and the team announced a $300 million partnership with Aspiration two weeks later. Leonard would have agreed to a four-year, $28 million sponsorship deal in April 2022, nine months after re-signing with the Clippers. Dennis J. Wong, a limited partner of the Clippers, invested $1.99 million in Aspiration nine days before the company made a $1.75 million payment to Leonard. The payment to Leonard was delayed, according to the payment schedule, as the company, apparently, was having financial difficulties before declaring bankruptcy. The NBA is investigating whether Ballmer and the Clippers violated league rules because Leonard accepted the deal.The accusations arose last week, when a person who allegedly worked for Aspiration revealed that the agreement with Leonard aimed to circumvent the salary cap. The Clippers have denied any wrongdoing.“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
The Clippers issued a statement saying that the details of their relationship with Aspiration are under investigation by the NBA, but that the company was a “house of cards” that defrauded Steve and many others. The team hopes to share the facts with the league and provide them with all the necessary information. The NBA has hired the New York-based law firm Wachtell, Lipton, Rosen & Katz to conduct the investigation. There is no set deadline for reaching a conclusion. According to reports, Leonard agreed to a four-year, $28 million sponsorship deal in April 2022 through his LLC, KL2 Aspire. An agreement in one of the documents stated that the deal between Aspiration and KL2 Aspire would be void if Leonard left the Clippers. Leonard could also “refuse to continue with any action desired” by Aspiration and still get paid. Aspiration declared bankruptcy in March. The company is under federal investigation for fraud, and Aspiration co-founder Joe Sanberg pleaded guilty to two counts of wire fraud in late August, admitting that he defrauded investors and lenders of more than $248 million. According to the evasion rules of the 2023 NBA collective bargaining agreement, teams can be penalized for circumventing the salary cap. Penalties can include fines of up to $7.5 million, the direct loss of draft picks, the nullification of any player contract, and a suspension (up to one year) for any team personnel found to be involved in such a violation. The Clippers have denied any wrongdoing, stating that the idea that Steve invested in Aspiration to channel money to Kawhi Leonard is absurd. Furthermore, the team emphasized that there was no oversight from Steve or the Clippers organization over Kawhi’s independent sponsorship deal with Aspiration.“The accusations have not been true… The most important thing for me is that we have done the right thing in all those interactions. You know, Kawhi’s business is Kawhi’s business. But we have always done the right thing.”
Steve Ballmer, owner of the Clippers
