Even in an NBA world that thrives on juicy stories, this one is a hell of a squeeze: According to journalist Pablo Torre, the Clippers allegedly funneled $28 million to star Kawhi Leonard through a team sponsor to circumvent the salary cap.
Clippers owner Steve Ballmer invested $50 million in Aspiration, Aspiration signed Leonard to a $28 million no-show contract, and now, thanks to the Pablo Torre Finds Out podcast, we have ourselves a major scandal.
But do we, really?
I’m dubious.
I won’t question Torre’s intentions, just his conclusions.
The NBA is buzzing about this, understandably. The allegations sparked comparisons to the Timberwolves’ salary-cap violations from a generation ago. Then-NBA commissioner David Stern docked the Wolves five first-round picks (one was later restored) for an illegal agreement with forward Joe Smith.
But if you are going to use the comparison as a basis for possible penalties, you should also compare the alleged crimes.
Minnesota circumvented the cap to sign a player they never would have otherwise been able to sign. Smith signed ridiculously below-market salaries with the promise the Wolves would make it up to him down the road.
The Clippers signed their own free agent to an extension, for more money than anybody else could offer him.
In the summer of 2021, Leonard could have picked up his $36 million player option for the 2021–22 season. Instead, he opted out, which made him a free agent. Any team with enough cap space could have tried to sign him. The starting salary would have been $39.34 million, the same number the Clippers offered. But because the NBA’s 2017 collective bargaining agreement was designed to incentivize players to stay with their current teams, the Clippers could offer larger annual increases than any other team.
The Clippers signed Leonard to a four-year, $176.3 million deal, which was more than $7 million more than any other team could offer him. That included a $48.78 million player option in the last year—which was, of course, to Leonard’s benefit.
Leonard is a Southern California native. He had just torn his ACL, and he had a significant history of injuries and of coming back from those injuries on his own timetable, regardless of what his employer wanted. (That was one reason his relationship with the Spurs deteriorated.) Leonard ended up missing the first year of his new contract, which was predictable. This meant that over the first three years of the deal, the Clippers paid Leonard $127 million for only two seasons of play. After that, he could opt out—which he did.
Leonard’s first Clippers deal, in 2019, was a three-year max deal with an opt out after two years. There is no evidence he gave the Clippers any kind of wink-wink discount at any point. Until this week, the common criticism of Leonard’s Clippers tenure was that he got paid too much for playing too little.
In 1998, the Timberwolves signed Joe Smith to a one-year, $1.75 million contract with an illegal promise of $86 million down the road.
These two situations are just not comparable.
Now, if the Clippers funneled money to their star through another company, it would still be a salary-cap violation, even if doing so gained them no real advantage. If that happened, NBA commissioner Adam Silver should absolutely penalize the Clippers. Not five first-round picks. But there should be penalties.
There is, after all, still the matter of Leonard signing a four-year, $28 million contract with Aspiration that allowed him to do basically nothing. The contract, as Torre reported, was only valid for as long as he remained a Clipper.
We will see what Silver finds. I am skeptical he will find much, though.
Consider the parties involved here.
I’ve covered sports long enough to understand that sometimes highly competitive people cheat. As we just covered, the Clippers had limited incentive to do so. But let’s imagine that Ballmer is so committed to pleasing his stars that he wanted to funnel an extra $28 million to Leonard, on top of the $176 million he already promised him.
If Ballmer wanted to do that, why would he do it like this?
Ballmer invested $50 million in Aspiration. Torre reported Leonard received $28 million. Later, Boston Sports Journal reported Leonard received an additional $20 million in a side deal with Aspiration. Those numbers almost add up. But that doesn’t mean the story does.
If Ballmer committed salary-cap violations, he would presumably want plausible deniability. This, in theory, is why Ballmer directed the money through Aspiration rather than just write Leonard a $28 million (or $48 million) check. But in 2021, the Clippers announced a $300 million deal with Aspiration, which included putting the company’s logo on Clippers jerseys. If you were circumventing the salary cap, would you do it through a company whose logo was on your team jerseys?
As longtime Mavericks owner Mark Cuban pointed out this week, if Ballmer violated rules, he would worry about being caught, and he would have rescued Aspiration to avoid public scrutiny. Ballmer obviously has the money to do it. Instead, the company failed.
Joseph Sanberg, the company’s founder, pleaded guilty to two counts of wire fraud. His plea agreement says he defrauded victims of $248 million. The criminal complaint says Sanberg convinced companies to loan him money, with his stakes in Aspiration as collateral. If Sanberg defaulted on the loans, his co-conspirator Ibrahim Ameen AlHusseini would buy those stakes to repay the loans. But AlHusseini didn’t have the money to do that. He and Sanberg falsified documents to make it look like he did.
I’m just spitballing here: If Leonard’s $28 million no-show endorsement deal was a fraud, do you think maybe we should blame the fraudsters who signed him to it?
It would be a big mistake to view all parties in this situation as equally responsible, equally rational actors. They aren’t.
When Ballmer says he had no idea how Aspiration operated, he might sound like he is playing dumb. But if he did know how Aspiration operated, he wouldn’t have done business with them at all.
Leonard is a superstar who likes to get paid. It is quite easy to believe that if somebody offered him a sweetheart $28 million endorsement deal, with no real obligations, he would sign it. Most athletes would.
That deal is raising eyebrows now, because who pays a guy $7 million a year to do nothing? It’s fiscal insanity—but everything Sanberg and AlHusseini did was fiscal insanity.
Yes, you say, but in this case, they were ones paying, not the ones getting paid.
This is true. I don’t know exactly why they did it. Maybe they were paying for legitimacy: They could go to investors and say, “Hey, look, Kawhi Leonard is working with us.” If that was their motivation, they didn’t need Leonard to do anything; they just needed to show he was in business with them.
Maybe Ballmer was their target, not their co-conspirator. Instead of Ballmer trying to keep Leonard happy, Sanberg and AlHusseini were trying to keep Ballmer from asking too many questions. What better way to look like they really had money than to lavish some upon Ballmer’s most high-profile employee?
As for the clause that would void the contract if Leonard left for another team: That is not as strange as it sounds. I have not seen LeBron James’s Nike deal, but I can assure you that Nike thinks having James play for the Lakers is more lucrative than if he played for the Pelicans, and that James and his agent Rich Paul know how Nike feels.
Aspiration was not Nike, obviously. But if they were using Leonard for legitimacy with Ballmer, or with potential investors/suckers based in L.A., then of course they would want him wearing an L.A. jersey with the Aspiration logo.
Sure, former Aspiration employees told Torre this was all done to circumvent the salary cap. Well, they worked for a fraudulent company. Shifting the fraud onto anybody outside of the company is obviously in their best interests.
If Ballmer ever wanted to pay a superstar under the table, the time to do it would not have been in 2021, when he signed an injured Leonard for more money than anybody else could offer. It would have been under the NBA’s new CBA, which was signed in 2023 and has much harsher penalties for high payrolls.
In 2024, Clippers star Paul George wanted to stay in L.A., but the Clippers were wary of meeting his number because they wanted flexibility. Ballmer could have funneled money to George. Instead, the Clippers held firm and George signed with the 76ers.
Again: Silver has to investigate this thoroughly. He will have access to a ton of information, including contracts and legal filings. If Ballmer is guilty, this will be hard to cover up—and his public protests should only make Silver angrier.
We’ll see where this ends up. But if you think these two admitted felons were accomplices in Steve Ballmer’s scheme, I’ve got some shares in Aspiration I’d like to sell you.