Pablo Torre: Did Clippers Circumvent Salary Cap w/ Kawhi?

[ozgod]

I think the precedent if wrongdoing is confirmed is clear and has been set with the Joe Smith case - monetary fines, loss of draft picks, possibly suspension of key Clippers executives (including Ballmer himself). Kawhi's contract being voided is possible, I think it would be unlikely though.

The big question is - can the league confirm wrongdoing? Is there a smoking gun? In the Joe Smith case, there was clear written documentation of salary cap violations, so proving wrongdoing was clear. In this case, we don't know enough based on Pablo's reporting. We don't know if there's a document that verifies that this "job" was to circumvent the salary cap. We don't know if there are emails or texts that can prove a connection. There may be - that's what the league's investigation is going to try and uncover. I don't think they need evidence "beyond a reasonable doubt" so they don't need a contract that spells out that the job was a quid pro quo, but just a "preponderance of evidence" - emails, texts, things like that that allow them to draw a connection.

If they can't find that level of evidence, if Ballmer and the Clippers can create enough plausible deniability? Maybe they will try and punish the Clippers in some minor way, maybe some reprimand?

My personal take is that it probably was a quid pro quo, but that Ballmer is rich enough that he can hire an army of lawyers and accountants to make sure there's enough plausible deniability ("it's a legit endorsement deal, I invested in this company because I believed in their potential") and no direct links that incriminate him. I wouldn't be surprised if similar things are happening all around the league with star players.

[Moranis]

I don't think they have to prove intentionality.  A team owner paying a player a large endorsement deal should be barrred because of the appearance of impropriety if nothing else.  Sports leagues do almost everything based on image.

[Celtics2021]

If true, in addition to obviously breaking the rules (signing Kawhi to a contract roughly 20% over the max they could offer), the Clippers also avoided over $135 million in luxury taxes, at least by my quick calculations.  A $7.5 million fine does not begin to cut it.

[Donoghus]

If true, in addition to obviously breaking the rules (signing Kawhi to a contract roughly 20% over the max they could offer), the Clippers also avoided over $135 million in luxury taxes, at least by my quick calculations.  A $7.5 million fine does not begin to cut it.

That's a really good point that I haven't seen brought up.

[aefgogreen]

With both financial and basketball penalties a huge part of the salary cap restrictions, I would not be surprised if more teams are trying to things similar to what the Clippers are accused of. The closest I can remember is when their where suspicions the Nets owner was paying Andre Kirilenko through another one of his businesses. Nothing was ever proven.
Adam Silver may be tempted to over regulate (e.g. restrict teams and players making deals with the same entity).  I don't think this is the solution. But I do think the league should (and will) more heavily scrutinize teams' and players' financial transactions.

[Donoghus]

Karalis piece from BSJ this morning.  More details with some interesting stuff.

BSJ Exclusive: Kawhi Leonard endorsement deal that triggered NBA investigation was actually worth $48 million

By John Karalis
Sep 4, 2025 ? 9:13 AM

The NBA is investigating potential salary cap circumvention by the Los Angeles Clippers through a series of transactions between owner Steve Ballmer, Kawhi Leonard, and a company named Aspiration, which has since filed for Chapter 11 bankruptcy protection. The podcast ?Pablo Torre Finds Out? was the first to report on this story.

Leonard signed with the Clippers in the summer of 2019, a decision that came as a bit of a surprise. It was well known that Leonard, a Los Angeles native, was open to returning home, but the Lakers have always been the dominant team in L.A., and always the favorites to land the big fish.

There were few fish as big as Leonard at the time. He was in his prime and fresh off a championship in Toronto, which earned him a second Finals MVP. But beyond the obvious interest in the free agency of one of the game?s biggest superstars was the sideshow of Leonard?s uncle, Dennis Robertson.

?Uncle Dennis,? as he was widely known, joined Leonard?s agent, Mitch Frankel, in the recruiting process. The Athletic reported in 2019 that Robertson was making ?lavish requests? which would have been blatant forms of a salary cap circumvention, which is one of the most serious infractions a team can commit. According to The Athletic, ?Robertson asked team officials for part ownership of the team, a private plane that would be available at all times, a house and  ? last but certainly not least ? a guaranteed amount of off-court endorsement money that they could expect if Leonard played for their team.?

The league was made aware of the requests and investigated, but found no evidence that the Clippers acquiesced to the demands. However, the recent bankruptcy filing by Aspiration has opened the door to a new investigation.

Aspiration was founded in 2013 by Andrei Cherny and Joseph Sanberg, touting itself as a driver in environmentally conscious business practices, including facilitating carbon offsets. They had attracted celebrity backers including Leonardo DiCaprio, who joined the company?s advisory board, Orlando Bloom, Doc Rivers, Cindy Crawford, Drake, and Robert Downey, Jr. The company also entered in major endorsement deals with the Boston Red Sox and sports league Athletes Unlimited.

The firm had also attracted a high-profile executive team, including former Hulu CFO Rojeh Avenesian, former Napster Chairman of the Board Mike Shuckerow, former CMO at Gwyneth Paltrow?s lifestyle brand, Goop Raphael Weishaupt, and former TrueCar CTO Eric Andersen. It was a sort of All-Star team of financial, legal, marketing, and technology experts.

At the time of the Leonard deal, Aspiration was an up-and-coming startup that had just received a $250 million investment from Oak Tree Capital Management. They had multi-million dollar deals, including the one with the Red Sox.

But the Leonard deal was a curious one, a source within the company told Boston Sports Journal. According to our source, none of the high-powered executives were consulted about the massive, $28 million endorsement deal Leonard signed, and Cherny never presented the deal to Aspiration?s Board of Directors. BSJ has learned the deal was presented to the executive team as-is, with no opportunity for further analysis.

Typically, the Chief Financial Officer (Avenesian) would have run an analysis of the return on investment. The Chief Legal Officer (Shuckerow) would have negotiated the contract. And the Chief Marketing Officer (Weishaupt) would have developed the branding synergies. According to insiders at Aspiration, the team was never given the opportunity to perform any of these tasks. Had they followed typical procedures, BSJ has been told they would have objected to the deal. Cherny, who served as CEO, signed the deal against the wishes of his management team, who saw it as a poor use of cash resources.

The deal was characterized as a "no-show job" on the Pablo Torre Finds Out podcast. Leonard did not appear in promotional material as other endorsers did, but sources tell BSJ that the marketing team and broader management team, excluding Cherny, saw no brand synergy with Leonard and chose not to use his services. They instead preferred to partner with climate-focused influencers.

The $28 million deal was to be paid in quarterly installments over four years, but it was not the only compensation Leonard received. According to a high-level source, Leonard also cut a side deal with Aspiration to receive an additional $20 million in company stock. The stock was to be paid out from Sanberg?s personal holdings in the company over four years.

That brought the total of promised compensation to Leonard to $48 million. Around the same time as the Leonard deal, Aspiration was going through its rounds of fundraising. They had raised approximately $600 million, including the previously mentioned $250 million from Oak Tree Capital Management. That number also included a $50 million investment from Ballmer. That investment has been characterized to Boston Sports Journal as having been made with light-to-no diligence.

Think of it as getting a commitment on Shark Tank after only a couple of questions.

The commitment from Ballmer was also curious, as he paid a higher price for his shares than others. The Oak Tree commitment to Aspiration came at $10 a share, but Ballmer paid a premium of $11 per share, raising his overall investment to $50 million. Typically, an investor of Ballmer?s caliber would have been wooed with a discounted share price, so the company could tout the investment of a major player.

At this point, the $48 million commitment by Aspiration to Leonard and Ballmer?s $50 million investment stand as two separate transactions. The league is currently investigating whether there is a connection that circumvented salary cap rules. If there is a finding of wrongdoing, it would not be the first violation for Ballmer and the Clippers. They were fined $250,000 in 2015 for offering DeAndre Jordan unauthorized endorsement opportunities.

In a statement to ESPN, the Clippers said ?Neither the Clippers nor Steve Ballmer circumvented the salary cap.

"The notion that Steve invested in Aspiration in order to funnel money to Kawhi Leonard is absurd. Steve invested because Aspiration's co-founders presented themselves as committed to doing right by their customers while protecting the environment ?

?There is nothing unusual or untoward about team sponsors doing endorsement deals with players on the same team. Neither Steve nor the Clippers organization had any oversight of Kawhi's independent endorsement agreement with Aspiration. To say otherwise is flat-out wrong.?

On the Pablo Torre Finds Out podcast, a Clippers statement called accusations of salary cap circumvention ?provably false.?

Aspiration has since filed for bankruptcy. The Clippers' endorsement deal was ended early due to breach of contract. Leonard never received any actual money in the $20 million stock deal as the shares never went liquid. He is also still owed a portion of the original $28 million. His LLC, KL2 Aspire LLC, is listed among the creditors in the bankruptcy filing.

The demise of Aspiration stems from Sanberg?s guilty plea in a $248 million fraud case. According to the complaint, Sanberg ?engaged in a scheme to artificially inflate the company?s revenue in order to attract investors and increase the value of its stock. To carry out the scheme, Sanberg made materially false and misleading statements to investors and engaged in other deceptive acts.? Of the $248 million, $145 million is related to a personal loan not connected with Aspiration. According to the SEC complaint, $44 million of Aspiration?s $216 million in revenue was tied to Sanberg?s frauds, which he expressly stated he ?concealed? from the company. According to sources, the SEC has reached out to numerous Aspiration employees about Cherny's potential involvement in the fraud, but he has not been charged.

Former Dallas Mavericks owner Mark Cuban used the guilty plea in a defense of Ballmer, tweeting, in part, ?Scammers do scammy things. They did a $300m sponsorship deal with the clippers in 2021. That?s a HUGE deal. The better the team does, the more value the sponsorship has. It actually makes perfect sense that if they stole money from investors and want the clippers to succeed, why not give stolen money to help keep their best player??

In their statement, the Clippers also said the team takes ?NBA compliance extremely seriously, fully respect the league's rules, and welcome its investigation related to Aspiration. The Clippers will also continue to cooperate with law enforcement in its investigation into Aspiration's blatantly fraudulent activity.?

But those within Aspiration insist that the actions of Cherny and Sanberg are those of rogue founders who went beyond a legitimate company?s means. Only Sanberg has been accused of criminal activity. Aspiration has been investigated by the federal government over the quality of its environmental actions, but there were no findings of any wrongdoing. Cherny is currently working with the Democratic Party on a ?Project 2029? strategy, which is a response to the ?Project 2025? strategy currently being implemented by President Trump.

[86MaxwellSmart]

I still say you shouldn't have a Salary Cap AND have Max contracts....Makes zero sense.

[aefgogreen]

Karalis piece from BSJ this morning.  More details with some interesting stuff.

BSJ Exclusive: Kawhi Leonard endorsement deal that triggered NBA investigation was actually worth $48 million

By John Karalis
Sep 4, 2025 ? 9:13 AM

The NBA is investigating potential salary cap circumvention by the Los Angeles Clippers through a series of transactions between owner Steve Ballmer, Kawhi Leonard, and a company named Aspiration, which has since filed for Chapter 11 bankruptcy protection. The podcast ?Pablo Torre Finds Out? was the first to report on this story.

Leonard signed with the Clippers in the summer of 2019, a decision that came as a bit of a surprise. It was well known that Leonard, a Los Angeles native, was open to returning home, but the Lakers have always been the dominant team in L.A., and always the favorites to land the big fish.

There were few fish as big as Leonard at the time. He was in his prime and fresh off a championship in Toronto, which earned him a second Finals MVP. But beyond the obvious interest in the free agency of one of the game?s biggest superstars was the sideshow of Leonard?s uncle, Dennis Robertson.

?Uncle Dennis,? as he was widely known, joined Leonard?s agent, Mitch Frankel, in the recruiting process. The Athletic reported in 2019 that Robertson was making ?lavish requests? which would have been blatant forms of a salary cap circumvention, which is one of the most serious infractions a team can commit. According to The Athletic, ?Robertson asked team officials for part ownership of the team, a private plane that would be available at all times, a house and  ? last but certainly not least ? a guaranteed amount of off-court endorsement money that they could expect if Leonard played for their team.?

The league was made aware of the requests and investigated, but found no evidence that the Clippers acquiesced to the demands. However, the recent bankruptcy filing by Aspiration has opened the door to a new investigation.

Aspiration was founded in 2013 by Andrei Cherny and Joseph Sanberg, touting itself as a driver in environmentally conscious business practices, including facilitating carbon offsets. They had attracted celebrity backers including Leonardo DiCaprio, who joined the company?s advisory board, Orlando Bloom, Doc Rivers, Cindy Crawford, Drake, and Robert Downey, Jr. The company also entered in major endorsement deals with the Boston Red Sox and sports league Athletes Unlimited.

The firm had also attracted a high-profile executive team, including former Hulu CFO Rojeh Avenesian, former Napster Chairman of the Board Mike Shuckerow, former CMO at Gwyneth Paltrow?s lifestyle brand, Goop Raphael Weishaupt, and former TrueCar CTO Eric Andersen. It was a sort of All-Star team of financial, legal, marketing, and technology experts.



Former Dallas Mavericks owner Mark Cuban used the guilty plea in a defense of Ballmer, tweeting, in part, ?Scammers do scammy things. They did a $300m sponsorship deal with the clippers in 2021. That?s a HUGE deal. The better the team does, the more value the sponsorship has. It actually makes perfect sense that if they stole money from investors and want the clippers to succeed, why not give stolen money to help keep their best player??

In their statement, the Clippers also said the team takes ?NBA compliance extremely seriously, fully respect the league's rules, and welcome its investigation related to Aspiration. The Clippers will also continue to cooperate with law enforcement in its investigation into Aspiration's blatantly fraudulent activity.?

But those within Aspiration insist that the actions of Cherny and Sanberg are those of rogue founders who went beyond a legitimate company?s means. Only Sanberg has been accused of criminal activity. Aspiration has been investigated by the federal government over the quality of its environmental actions, but there were no findings of any wrongdoing. Cherny is currently working with the Democratic Party on a ?Project 2029? strategy, which is a response to the ?Project 2025? strategy currently being implemented by President Trump.

Cuban actually made a decent point.  I think that the deal was void if Kawhi left the Clippers isn't a huge red flag. It is much more suspicious that it was written in the contract that he didn't have to actually do anything.

[Vermont Green]

I am suspicious.  It appears that they covered their tracks sufficiently, but this seems like too many coincidences to not be what it appears to be.  Going to be hard to prove though.

I am stunned that a company like this was able to attract that much money from investors.  It is not clear at all how this company would ever make actual money.  In the end, a lot of people lost a lot of money, not a big surprise I guess.

[Donoghus]

I am suspicious.  It appears that they covered their tracks sufficiently, but this seems like too many coincidences to not be what it appears to be.  Going to be hard to prove though.

I am stunned that a company like this was able to attract that much money from investors.  It is not clear at all how this company would ever make actual money.  In the end, a lot of people lost a lot of money, not a big surprise I guess.

Lots of really smart people make really stupid decisions when it comes to money.