The NBA has initiated a formal investigation into allegations involving Kawhi Leonard, the LA Clippers, and a defunct environmental finance company, Aspiration.
The league has hired the prominent law firm Wachtell, Lipton, Rosen & Katz to lead the inquiry, a move that underscores how seriously the NBA is treating the situation. This firm previously led probes into former Clippers owner Donald Sterling in 2014 and ex-Suns owner Robert Sarver in 2022, both of which ended in team sales following misconduct findings.
The controversy was sparked by reporting from The Athletic’s Pablo Torre, who detailed claims that Leonard received a $28 million “no-show” endorsement deal from Aspiration. Torre’s podcast, Pablo Torre Finds Out, presented documents and interviews suggesting the contract may have been a hidden means of compensating Leonard outside of NBA salary cap rules.
Leonard’s limited liability company, KL2 Aspire, reportedly had a contract with Aspiration – an arrangement that, according to bankruptcy filings, still owed Leonard $7 million when the company folded.
Multiple former Aspiration employees have since claimed the deal had no substantial work obligations and may have been structured to offer under-the-table benefits to help the Clippers secure Leonard during free agency.
Team owner Steve Ballmer, who was an investor in Aspiration, denied any wrongdoing. Speaking during an ESPN interview, Ballmer stated, “I made an investment in these guys thinking it was on the up-and-up. I have no ability to predict why they might have done anything they did, let alone the specific contract with Kawhi.”
Ballmer claimed he was misled and had no involvement in negotiating or authorizing the deal with Leonard.
Aspiration’s downfall has only added fuel to the controversy. The company’s co-founder, Joseph Sanberg, has pleaded guilty to two counts of wire fraud and now faces up to 40 years in prison. The Clippers have publicly stated they are cooperating with both NBA officials and law enforcement regarding Aspiration’s “blatantly fraudulent activity.”
What happens next?
With Wachtell Lipton leading the investigation, the NBA is signaling a serious commitment to enforcing its salary cap regulations. If the league finds that Leonard’s deal violated rules, intentionally or otherwise, the consequences could be significant. The Clippers may face steep fines, forfeiture of draft picks, or other penalties.
This case could also set a precedent for how the league handles third-party endorsement relationships that blur the line between marketing deals and hidden compensation.
While nothing has been proven yet, and Leonard has not commented publicly, the investigation is expected to unfold in the coming weeks. Until then, the Clippers remain under scrutiny, hopeful that their internal compliance policies will stand up to the league’s review.
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