The NBA has launched an investigation into LA Clippers owner Steve Ballmer and the team following reports that Kawhi Leonard allegedly accepted a $28 million endorsement deal from Aspiration, a company, to circumvent the league`s salary cap. Ballmer, who had previously invested $50 million in Aspiration, denies any knowledge of the deal or directing the company to make it.
What is known about Aspiration, the company at the center of the controversy?
What was Aspiration and who were its founders?
Aspiration Partners was founded in 2013 by Harvard alumni Joe Sanberg, an entrepreneur, and Andrei Cherny, a lawyer. The company`s mission was to provide “socially-conscious and sustainable banking services and investment products” under the slogan “Do Well. Do Good.” Sanberg owned approximately 30% of the shares and was an early investor, while Cherny served as CEO for nearly a decade.
Aspiration`s Business Model
Aspiration positioned itself as an environmentally conscious digital bank, promising that customer deposits would “never fund fossil fuel projects.” The company offered savings accounts, debit cards with cashback from ethical businesses, an option to plant a tree with every purchase roundup, and access to “100% fossil fuel-free” investment funds.
Notable Investors in Aspiration
Aspiration attracted high-profile investors including celebrities like Robert Downey Jr., Orlando Bloom, Leonardo DiCaprio, as well as coach Doc Rivers and Cindy Crawford. Its corporate partners included Meta, Microsoft, and eventually the LA Clippers.
The Connection Between Ballmer, Leonard, and the LA Clippers with Aspiration
In September 2021, Steve Ballmer personally invested $50 million in Aspiration. The same month, the LA Clippers signed a $300 million partnership deal with Aspiration, making it the “first founding partner” of the Intuit Dome arena. This multi-year partnership included a “Planet Protection Fund.”
`Aspiration becoming our first Founding Partner supports the stake we are planting in the ground to make Intuit Dome the most sustainable arena in the world,` Ballmer said in the statement.
Later, in November 2021, Ballmer introduced Aspiration to Leonard. In April 2022, nine months after re-signing with the Clippers, Leonard allegedly secured a four-year, $28 million endorsement deal from Aspiration through his LLC, KL2 Aspire. An unnamed Aspiration employee reportedly stated that this payment was intended to “circumvent the salary cap.” Further documents indicated that Clippers minority owner Dennis Wong also invested in Aspiration shortly before Leonard`s first payment. Ballmer made an additional investment in Aspiration in March 2023.
NBA`s Reaction
The NBA is investigating potential violations of league rules by Ballmer and the Clippers. Commissioner Adam Silver emphasized that the burden of proof lies with the league, requiring a review of the “totality of the evidence” rather than “mere appearance” of impropriety. He stressed the importance of avoiding premature conclusions. The investigation will be thorough but has no set deadline.
`Just by the way those words read, I think as a matter of fundamental fairness, I would be reluctant to act if there was sort of a mere appearance of impropriety. … I think that the goal of a full investigation is to find out if there really was impropriety. Also, in a public-facing sport, the public at times reaches conclusions that later turn out to be completely false. I`d want anybody else in the situation Mr. Ballmer is in now, or Kawhi Leonard for that matter, to be treated the same way I would want to be treated if people were making allegations against me.`
What Happened to Aspiration?
Co-founder and former CEO Cherny left the company in 2022, stating that Leonard`s contract was not a “no-show” deal and had “extensive obligations.”
`I can`t speak to what was done or not done after I left — or why,` Cherney said in the statement.
In March, Aspiration filed for bankruptcy with reported debts of $170 million, including $30 million owed to the Clippers and $7 million to Leonard`s LLC.
Last month, co-founder Sanberg pleaded guilty to two counts of wire fraud, having defrauded investors and lenders of $248 million. He faces a maximum sentence of 20 years in prison for each charge.
Ballmer expressed embarrassment for not detecting issues in Aspiration`s financial statements, calling the founders “frauds” who “conned” him.
`These were guys who committed fraud. Look, they conned me. They conned me,` he said. `I made an investment in these guys thinking it was on the up-and-up, and they conned me at this stage. I have no ability to predict why they might have done anything they did, let alone the specific contract with Kawhi.`