NBA Clippers Investigations Highlights Player-Team-Sponsor Deals

The NBA’s investigation into Los Angeles Clippers owner Steve Ballmer, forward Kawhi Leonard and a now-bankrupt company named Aspiration will center around the three-way relationship between the parties. The company was paying both the team and its star player. Ballmer owns the Clippers and was an investor in Aspiration.

Should the probe uncover a clear attempt by Ballmer to circumvent the league’s salary cap, the punishment handed down by the league will likely be severe. However, the investigation could also return a much blurrier picture regarding a web of financial arrangements and their true intentions.

It’s not uncommon in U.S. sports for a team sponsor to also have an endorsement deal with a player on that team, and leagues like the NBA typically have little insight into the specifics of those contracts. Asked Wednesday about those relationships, and whether the NBA can ever fully monitor them, commissioner Adam Silver said the league didn’t see an inherent conflict in the arrangement.

The Denver Nuggets, for example, used play in the Pepsi Center, and it would have been unreasonable for the NBA, Silver said, to expect Pepsi (which also owns Gatorade) to be precluded from also having individual deals with some of the league’s biggest stars. Second, Silver said many local sponsors see geographical advantages to working with the market’s biggest celebrities, and their deals frequently require a player to be on that specific team.

“We’re first to admit that we can always learn more,” Silver told reporters on Wednesday following NBA board meetings in New York. “The stakes have gotten much higher. Salaries are much higher, and team values are much higher. So maybe there does need to be a new level of scrutiny on some of these things. Those are all things that we’ll look at, but we certainly won’t change the rules, mid-course, in the middle of an investigation.”

The NBA has hired New York-based law firm Wachtell, Lipton, Rosen & Katz to investigate the relationship between Aspiration, Leonard and the Clippers. A report last week from podcaster Pablo Torre alleged that Leonard was given a four-year, $28 million deal by Aspiration, with sparse or fully non-existent deliverables, as a way to augment his NBA salary. The Clippers and Ballmer have denied any wrongdoing.

Silver told reporters that the burden of proof in the investigation will be on the NBA in the process. If the league is going to discipline a team, player or owner, he said, it will need to be able to prove wrongdoing.

“In a public-facing sport, the public at times reaches conclusions that later turn out to be completely false,” he said. “I would want anybody else in the situation that Mr. Ballmer’s in right now, or Kawhi Leonard for that matter, to be treated the same way I would want to be treated if people were making allegation against me.”