A week after a report surfaced alleging Los Angeles Clippers owner Steve Ballmer tried to circumvent NBA salary-cap rules, commissioner Adam Silver on Wednesday stated if any wrongdoing is found, he will exercise his “very broad powers.”
According to a report from the “Pablo Torre Finds Out” podcast, Ballmer fed $28 million to superstar Kawhi Leonard in the form of a “no-show” endorsement deal with a now-bankrupt company.
During his annual news conference following the league’s board of governors meetings in New York, Silver confirmed the NBA has retained an outside law firm to investigate the matter.
The podcast alleged that sustainability business Aspiration, to which Ballmer reportedly gave $50 million in funding, agreed to give Leonard $28 million in cash over the course of four years between 2022 and 2025, as long as he was playing for the Clippers.
However, there is no record of Leonard doing any marketing for, mentioning or endorsing Aspiration, as would be expected in such an endorsement deal.
“It was to circumvent the salary cap,” a source who used to work for Aspiration told the podcast.
Aspiration is now bankrupt, and its co-founder, Joseph Sanberg, agreed to plead guilty in August to defrauding multiple investors.
Silver stated he has “never heard of the company … (and) never heard a whiff of anything around an endorsement deal with Kawhi or anything around an engagement with the Los Angeles Clippers. So it was all new to me.”
After NBA general counsel and chief compliance officer Rick Buchanan spoke with Ballmer over the allegations, “We quickly concluded this was something that rose to the level that necessitates an investigation, in fact one that’s done outside of our office,” Silver said.
New York-based firm Wachtell, Lipton, Rosen & Katz will oversee the investigation.
“The burden is on the league if we’re going to discipline a team, an owner, a player or any constituent members of the league,” Silver said. “I think as with any process that requires a fundamental sense of fairness, the burden should be on the party that is, in essence, bringing those charges.”
He later added: “My powers are very broad. I have a full range of financial penalties, draft picks, suspensions, etc. I have very broad powers in these situations.”
The Circumvention clause within the league’s collective bargaining agreement states, in part: “It shall constitute a violation of (the clause) for a Team (or Team Affiliate) to enter into an agreement or understanding with any sponsor or business partner … where such compensation from the sponsor or business partner or third party is substantially in excess of the fair market value of any services to be rendered by the player for such sponsor or business partner or third party.”
For his part, Ballmer welcomed the idea of an investigation when speaking with ESPN last week.
“I’d want the league to investigate, take it seriously,” he said.
He also stated he was unaware of the full structure of the deal between Aspiration and Leonard, and he maintained he was a victim in the situation.
“I don’t know why they did what they did, and I don’t know how different it is (compared with other endorsement deals),” he said.
“These were guys who committed fraud. Look, they conned me. They conned me. 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.”
Leonard, 34, won the NBA Finals MVP award both times he earned NBA championship titles (2014 with the San Antonio Spurs, 2019 with the Toronto Raptors). He also has two NBA Defensive Player of the Year awards to his name.
He missed the 2021-22 campaign following knee surgery and has been limited in each of the past three seasons due to ongoing knee issues. Leonard averaged 21.5 points and 5.9 rebounds in just 37 games last season.
In 13 seasons with the Spurs, Raptors and Clippers, the six-time All-Star has averaged 20.1 points and 6.4 rebounds in 733 games.
Accusations of circumventing the salary cap are rare. The most well-known case involved the Minnesota Timberwolves getting hit in 2000 with a $3.5 million fine and losing five first-round draft picks (later amended to three) for signing an illegal secret agreement with power forward Joe Smith.
