The Los Angeles Clippers and owner Steve Ballmer are reportedly facing serious accusations of bypassing the NBA`s salary cap. A new report claims the team allegedly paid star player Kawhi Leonard $28 million for a “no-show” position through a company partially funded by Ballmer, which has since filed for bankruptcy.
Podcaster Pablo Torre, in a recent episode of his “Pablo Torre Finds Out” podcast, revealed these allegations on Wednesday. Torre cited internal documents from Aspiration, a tree-planting company. Ballmer had invested $50 million into Aspiration through his personal LLC in September 2021.
Shortly after Ballmer`s investment, in late September 2021, the Clippers announced a substantial $300 million partnership with Aspiration, featuring sponsorship of their new arena and jersey patch.
Documents cited by Torre indicate that Leonard, through his LLC KL2 Aspire, entered a four-year, $28 million endorsement agreement with Aspiration in April 2022. This agreement followed his maximum allowable four-year, $176.3 million contract extension with the Clippers in the summer of 2021.
A critical clause in the alleged documents reportedly stipulated that the endorsement deal would be voided if Leonard departed the Clippers. Furthermore, the documents suggest Leonard could “decline to proceed with any action desired” by Aspiration while still receiving payments, raising questions about the nature of the “endorsement.” An unnamed Aspiration employee allegedly told Torre that the payments to Leonard were explicitly designed to “circumvent the salary cap.”
In response to the allegations, the Clippers vehemently denied any wrongdoing, stating, “Neither Mr. Ballmer nor the Clippers circumvented the salary-cap or engaged in any misconduct related to Aspiration.” They asserted that their partnership with Aspiration ended in the 2022-23 season due to the company`s default and that neither Ballmer nor the team were aware of any improper activities until after a government investigation began. The Clippers pledged full cooperation with law enforcement.
The NBA has not yet issued a comment regarding Torre`s allegations.
Potential Consequences and Past Precedents
The NBA`s 2023 collective bargaining agreement includes strict anti-circumvention rules. Violations can lead to severe penalties, such as fines up to $7.5 million, forfeiture of draft picks, voiding of player contracts, and suspensions of up to a year for any involved team personnel.
The article recalls a significant precedent: in 2000, the Minnesota Timberwolves were found to have made an illegal secret agreement with player Joe Smith, promising him a lucrative future contract if he accepted a shorter, lower-paying deal. The Timberwolves faced heavy sanctions, including the loss of five first-round draft picks, a $3.5 million fine, a one-season ban for head coach Kevin McHale and owner Glen Taylor, and the voiding of Smith`s contracts.
Clippers` History with NBA Investigations and Fines
This isn`t the Clippers` first run-in with the league. In May 2019, they were fined $50,000 for tampering after then-head coach Doc Rivers publicly compared Leonard, then a Toronto Raptor, to Michael Jordan.
In 2019, the NBA also investigated the Clippers following allegations that Leonard`s camp, led by his uncle Dennis Robertson, made improper demands during his free agency. These alleged demands included partial team ownership, private jet access, a house, and guaranteed endorsement money.
The league imposed another $50,000 fine on the Clippers in November 2019 for comments by Rivers deemed “inconsistent” with Leonard`s health status.
A December 2020 lawsuit by Johnny Wilkes, claiming he facilitated Leonard`s move to the Clippers in exchange for a $2.5 million payment from team consultant Jerry West, also triggered an NBA investigation. The Clippers denied the claims, and the lawsuit was dismissed without league penalty.
Leonard`s Current Contract and Related Litigation
Leonard, now 34, recently extended his contract with the Clippers in January 2024, signing a three-year, $153 million deal that secures his tenure through the 2026-27 season.
Separately, the Clippers are defending against a 2024 lawsuit filed by former strength and conditioning coach Randy Shelton, who alleges wrongful termination after raising concerns about the handling of Leonard`s health and injuries.