— The NBA has retained New York law firm Wachtell, Lipton, Rosen & Katz to investigate claims that a 2022 endorsement arrangement tied to Kawhi Leonard and the Clippers may have been used to skirt the league salary cap, a source told The Athletic.
Key Takeaways
- The NBA hired Wachtell, Lipton to lead an independent probe into endorsement and team finance allegations.
- The claims center on a four‑year, $28 million 2022 deal between Kawhi Leonard and green bank Aspiration, now in bankruptcy.
- Aspiration employees have alleged the contract was a no‑show arrangement meant to help the Clippers and owner Steve Ballmer manage cap space.
- Ballmer invested $50 million in Aspiration in 2021 and the firm was announced as a Clippers sponsor under a proposed $300 million, 23‑year deal.
- Bankruptcy records list the Clippers and Forum Entertainment as Aspiration’s top creditors; Leonard is listed as owed about $7 million.
- The CBA outlines penalties for salary‑cap circumvention that could include multimillion‑dollar fines, draft pick forfeiture and voiding of contracts.
- Wachtell Lipton previously led high‑profile owner probes into Donald Sterling (2014) and Robert Sarver (2022), outcomes that included bans, fines and ownership changes.
Verified Facts
The league has engaged Wachtell, Lipton and is also assigning an internal investigator from its legal office to consult on the matter. The Athletic reported that anonymous Aspiration employees alleged Leonard’s endorsement was a no‑show arrangement intended to circumvent the NBA salary cap.
Public documents show Aspiration later entered bankruptcy. Per reporting, the four‑year, $28 million endorsement between Leonard and Aspiration was agreed in April 2022. Leonard’s contract reportedly included a clause allowing him to decline any and all company requests; obtained reporting indicates there is no clear public evidence that Leonard performed work for Aspiration.
Steve Ballmer, who invested $50 million into Aspiration in 2021 and whose ownership groups are listed among Aspiration’s largest creditors, has denied wrongdoing. He has said he introduced Leonard to Aspiration executives at their request but has denied knowledge of the employment arrangement details.
Bankruptcy filings list the Clippers and Forum Entertainment as leading creditors and show Leonard is owed approximately $7 million. Additional reporting has suggested there may have been a second, alleged stock‑based agreement worth roughly $20 million tied to a company co‑founder; that claim remains separately reported and not confirmed by public court filings.
Context & Impact
The choice Leonard made in January 2024 to sign a team‑friendly extension that paid about $153 million over three years drew attention leaguewide because it preserved roster flexibility for the Clippers. If investigations find evidence of deliberate salary‑cap circumvention, the case could affect roster construction and past transactions tied to those seasons.
Wachtell, Lipton has a precedent of handling sensitive owner probes for the NBA. The Sterling review in 2014 resulted in a lifetime ban and a $2.5 million fine; the Sarver review in 2022 led to a one‑year suspension, a $10 million fine and eventual team sale. Those outcomes illustrate the range of remedies the league can pursue when violations are substantiated.
- Possible club-level consequences include fines up to $7.5 million and loss of draft picks.
- Player‑level consequences can include fines up to $350,000 and, in some cases, contract voiding if violations are proven.
“I have denied any wrongdoing and introduced Mr. Leonard to Aspiration at their request; I was not aware of employee arrangements,”
Steve Ballmer (public statement)
Unconfirmed
- Allegations by anonymous Aspiration employees that Leonard’s $28 million endorsement was a deliberate no‑show intended to alter the Clippers’ cap situation remain unproven beyond those employee claims.
- Reports of a separate roughly $20 million stock‑based agreement involving a company co‑founder have been reported but are not independently verified in public filings.
Bottom Line
The NBA’s move to hire a prominent outside law firm signals the league is treating these accusations seriously. Depending on the investigators’ findings and any subsequent appeals process, potential penalties range from monetary fines to draft pick forfeitures and the voiding of transactions. The probe will center on whether documented deals amounted to impermissible transfers of value that affected roster and cap decisions.