A limited partner with the LA Clippers reportedly sent nearly $2 million to a now-bankrupt company that allegedly gave Kawhi Leonard an endorsement deal for a “no-show job” less than 10 days before the star forward was paid $1.75 million by the company, the podcast “Pablo Torre Finds Out” reported Thursday.
The company, Aspiration, reportedly agreed to a $28 million endorsement deal with Leonard in 2021. Clippers owner Steve Ballmer invested $50 million through his personal LLC in September 2021, and the Clippers announced a $300 million partnership with Aspiration two weeks later. Torre reported that Leonard agreed to a four-year, $28 million endorsement deal in April 2022 — nine months after he re-signed with the Clippers.
On Thursday, Torre reported that Dennis J. Wong, a Clippers limited partner, invested $1.99 million in Aspiration nine days before the company made a $1.75 million payment to Leonard. The payment to Leonard was late, according to the payment schedule, as the company was reportedly having financial troubles before ultimately declaring bankruptcy.
The NBA is investigating whether Ballmer and the Clippers violated league rules because Leonard accepted the deal.
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On Wednesday, NBA commissioner Adam Silver said it would be up to the NBA to prove wrongdoing by the Clippers.
“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,” Silver said during his annual news conference at the conclusion of the league’s board of governors meetings.
The allegations first came out last week when an unnamed person who purportedly worked for Aspiration told Torre that the deal with Leonard “was to circumvent the salary cap.”
The Clippers have denied any wrongdoing.
“The allegations have not been true,” Ballmer told ESPN’s Ramona Shelburne on Sept. 4. “But what’s most important to me is we’ve done the right thing in all those interactions. You know Kawhi’s business is Kawhi’s business. But we’ve always done the right thing.”
On Wednesday, the Clippers issued a statement to Torre, saying: “The details of our relationship with Aspiration are under NBA investigation, but it’s clear the company was a house of cards that defrauded Steve and many others. We look forward to sharing the facts with the league and providing them with all the information they need.”
Sources told ESPN that the NBA has hired the New York-based law firm Wachtell, Lipton, Rosen & Katz to handle the investigation. There is no set deadline to find a conclusion.
According to Torre, Leonard agreed to a four-year, $28 million endorsement deal in April 2022 through his LLC, KL2 Aspire. A clause in one of the documents, according to Torre, stated that the deal between Aspiration and KL2 Aspire would be voided if Leonard left the Clippers. Leonard also could “decline to proceed with any action desired” by Aspiration and continue to be paid, Torre reported.
Aspiration filed for bankruptcy in March. The company is under federal investigation for fraud, and Aspiration co-founder Joe Sanberg, 46, pleaded guilty to two counts of wire fraud in late August, admitting he defrauded investors and lenders of more than $248 million.
Under the circumvention rules of the NBA’s 2023 collective bargaining agreement, teams can be punished for circumventing the salary cap. Penalties can include fines up to $7.5 million, direct forfeiture of draft picks, voiding any player contract and a suspension — up to a year — for any team personnel found to have engaged in such a violation.
“The notion that Steve invested in Aspiration in order to funnel money to Kawhi Leonard is absurd,” the Clippers said Wednesday. “… 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.
“The Clippers take NBA compliance extremely seriously, fully respect the league’s rules, and welcome its investigation related to Aspiration.”
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