NBA commissioner Adam Silver on Wednesday addressed the league’s investigation into allegations the Los Angeles Clippers circumvented the salary cap through a sponsor paying Kawhi Leonard, with the commissioner stressing that due process, fundamental fairness and reliable evidence are essential ingredients to ensure the investigation’s outcome is reliable and correct.
Silver’s comments were made at the league’s Board of Governors press conference in New York. Silver, a seasoned attorney who has overseen major NBA investigations that intersect with the law, made clear the NBA won’t rush to judgment or be swayed by pressure to swiftly find the Clippers at fault.
“The public at times reaches conclusions that later turn out to be completely false,” Silver said.
The commissioner repeatedly underscored the value of process and fairness, meaning the league will take as much time as necessary to get it right. Consistent with that line of thinking, Silver mentioned the NBA decided to launch an investigation, which will be led by the law firm Wachtell, Lipton, Rosen & Katz, after undertaking due diligence. That diligence included a conversation between NBA general counsel Rick Buchanan and Clippers owner Steve Ballmer to discuss the allegations.
Those allegations were made on the Pablo Torre Finds Out podcast, and there has been additional reporting by the Boston Sports Journal and Toronto Star. In 2022, Aspiration, a company with whom Ballmer invested $50 million and was a Clippers sponsor, signed Leonard (through Leonard’s KL2 Aspire LLC) to a four-year, $28 million endorsement deal. Allegedly, Leonard wasn’t expected to perform any services and the deal was designed to end if Los Angeles traded the six-time All-Star. Aspiration filed for bankruptcy earlier this year and owes the Clippers and KL2 Aspire $30.1 million and $7 million, respectively.
Although Leonard signed a max contract with the Clippers in 2021, the rumors of the team arranging for him to be paid extra through a sponsor’s endorsement raise the possibility the alleged “no-show” job was a move to circumvent the salary cap. The Clippers deny the allegations.
On Thursday, Torre presented new allegations against the Clippers. Drawing from individuals described as former finance employees at Aspiration and other materials, Torre reports that Clippers minority owner Dennis J. Wong invested $1.99 million into Aspiration in 2022 after the company allegedly missed a quarterly payment to Leonard of $1.75 million. The investment was made as the company was experiencing financial turmoil. After Wong’s investment, Leonard was paid. Wong was a roommate of Ballmer’s at Harvard and is a real estate entrepreneur.
Silver noted the “burden is on the league” to discipline a team, owner, player or “any constituent member of the league.” He said that is consistent with “any process that requires fundamental fairness” and one that reaches decisions based on “the totality of evidence.” Silver also said he “would be reluctant to act” if there is only a “mere appearance of impropriety,” noting he must be sure there is actual impropriety. The commissioner added he’s a “big believer in due process and fairness and we need to now let the investigation run its course.”
The commissioner’s remarks make clear that while the NBA is not a court of law, it will rely on legal principles and adhere to procedures in the investigation. This is important because even if the Clippers-Aspiration arrangement looks suspicious, particularly in hindsight, Silver will want assurance the evidence confirms wrongdoing.
That likely means anonymous sources and other unverifiable forms of evidence won’t cut it. It also suggests that dubious timing of payments alone won’t be not enough, and that accusations brought by former Aspiration employees will be vetted carefully given that those individuals may be biased or have motives that raise questions about accuracy.
Keep in mind, while Silver was speaking to members of the media and by extension fans, his intended audience includes owners, players, the NBPA, sponsors and other persons with whom the league has important interests. He’s also mindful of future controversies, including those involving other owners, where the commissioner will be expected to adjudicate. Silver wants the different constituencies of the league to know that he’ll give the accused a fair shake and won’t rush to judgment.
As Sportico detailed on Wednesday, the NBA has wide latitude in determining if the Clippers engaged in wrongdoing. An actual “deal” between the Clippers and Aspiration is not required, as merely an “understanding” between the two would be enough to find salary cap circumvention under the CBA. At the same time, Silver made clear the NBA needs to be convinced there really was wrongdoing.
A fair and substantive investigation protects the league in the event it spirals into litigation. To be clear, it is very unlikely litigation would emanate from this controversy, especially because teams and owners contractually assent to the league having final, binding and conclusive authority on disciplinary matters. But that hasn’t stopped owners, including Ballmer’s predecessor as Clippers owner, Donald Sterling, from filing lawsuits against the league and others. Those cases face long odds from the get-go because of the deference courts give to private organizations in their application of rules—especially when that application is properly conducted.