The NBA said Wednesday that it will launch an investigation into a report of a multi-million endorsement deal between the Clippers’ Kawhi Leonard and a California-based sustainability services company.
At issue are allegations that the endorsement deal allowed the Clippers to circumvent league salary cap rules, something the Clippers strongly denied in a statement released after the report on the “Pablo Torre Finds Out” podcast.
The probe will focus on ties between Leonard, the Clippers and a company called Aspiration Fund Adviser, LLC, which filed for bankruptcy this year. The company listed several creditors at that time, among them the Clippers and a company called KL2 Aspire LLC that was owed $7 million.
The announcement of the NBA investigation follows a report Wednesday by Torre, who obtained a copy of the endorsement agreement between Aspiration and KL2 Aspire.
“We are aware of this morning’s media report regarding the LA Clippers and are commencing an investigation,” NBA spokesman Mike Bass said Wednesday.
Leonard is listed as the manager of KL2 Aspire LLC in California filings. KL are his initials, and 2 is his jersey number. Emails sent to his listed representatives seeking comment Wednesday were not immediately returned.
The Clippers denied that any league rules were broken.
“Neither Mr. Ballmer nor the Clippers circumvented the salary cap or engaged in any misconduct related to Aspiration,” the Clippers said in a statement. “Any contrary assertion is provably false: The team ended its relationship with Aspiration years ago, during the 2022-23 season, when Aspiration defaulted on its obligations.”
Clippers owner Steve Ballmer made a $50 million investment in Aspiration, and the company and the team announced a $300 million partnership in September 2021. That was about a month after Leonard signed a four-year, $176 million extension with the Clippers.
Aspiration’s co-founder, Joseph Sanberg, agreed to plead guilty last month after facing federal charges of wire fraud. Prosecutors said he defrauded investors and lenders out of $248 million, adding that “Aspiration’s financial statements were inaccurate and reflected much higher revenue than the company in fact received.”
Torre reported that the endorsement agreement between Aspiration and KL2 Aspire called for Leonard to be paid $7 million annually for four years. Given that timetable, Leonard still would have been owed the final $7 million at the time of Aspiration’s bankruptcy filing.
There is no evidence that Leonard did anything to publicly endorse Aspiration.
Leonard joined the Clippers in July 2019 on a three-year, $103-million contract. He re-signed for four years in 2021 and signed a three-year extension last year.
The league — which previously looked into claims that Leonard’s representatives asked for certain things that would be considered cap circumventions when he was a free agent several years ago — can issue stiff penalties if cap rules are found to have been broken by a team, including a fine of up to $7.5 million, the voiding of contracts and the forfeiture of future draft picks.