The NBA’s investigation into Kawhi Leonard’s sponsorship deals continues, now in its eleventh month, and its scope has expanded. This ongoing inquiry has created uncertainty around a recent trade that would see Leonard return to the Toronto Raptors from the LA Clippers. The league informed the Raptors that they would bear the risk of any penalties resulting from the investigation if they acquire Leonard, leading to a pause in the trade.
The investigation initially focused on whether the Clippers circumvented the NBA salary cap by facilitating a sponsorship deal for Leonard with Aspiration, an environmental company that later filed for bankruptcy. Sources indicate that the probe has broadened to include whether the Clippers improperly covered expenses for Leonard without reimbursement and if he had a previously unreported endorsement deal with another company.
Investigation Details and Impact
The inquiry, led by law firm Wachtell Lipton, has been a source of frustration across the league. Despite NBA Commissioner Adam Silver’s hope for a swift conclusion, no clear resolution has been provided. Some team executives anticipate that the Clippers may face punishment as a result.
Clippers owner Steve Ballmer has denied any wrongdoing, stating he was a victim of fraud related to Aspiration’s bankruptcy. David Kelly, executive director of the National Basketball Players Association, has also expressed that the investigation should not be taking this long.
The origin of the investigation stems from Leonard’s contract with Aspiration, which was reportedly worth $28 million. Leonard never publicly promoted the company, and former Aspiration employees have differing views on whether the deal was intended to bypass the salary cap. Some believe that Aspiration co-founder Joe Sanberg, who was sentenced to 14 years in federal prison after pleading guilty to wire fraud, holds key information. Others suspect cap circumvention was involved, noting that Leonard’s public profile made him an unusual choice for the company’s marketing efforts.
Despite the inactivity in public promotions, Leonard and the Clippers were considered important to Aspiration’s portfolio. One former executive recalled Sanberg indicating that the Leonard deal was linked to a broader understanding of future collaborations between the team and the company. Another former executive, however, emphasized the importance of the relationship with the franchise and Ballmer generally, beyond just the Leonard deal.
Aspiration’s former CEO, Andrei Cherny, signed off on Leonard’s contract, which sources suggest was significantly more valuable than endorsement deals with figures like Drake and Robert Downey Jr. Sanberg also reportedly gave Leonard $20 million in equity in the company and covered Leonard’s legal fees.
Raptors’ Position and Trade Status
The Toronto Raptors were reportedly unaware that the trade for Leonard could be halted, despite knowing about the ongoing investigation. They remain optimistic that the trade will eventually be completed. The deal would involve the Raptors trading Brandon Ingram, Gradey Dick, and draft picks to the Clippers.
Sources at the Summer League in Las Vegas indicate a consensus that Leonard is unlikely to face significant personal punishment, and the trade is expected to go through. One executive suggested it is improbable that Leonard’s contract would be voided, making him a free agent. Another source indicated that any repercussions might more likely fall on Clippers owner Steve Ballmer or Leonard’s agent.
Leonard’s presence at a Raptors Summer League game, where he chatted with Larry and Judy Tanenbaum and Raptors executive vice-president Bobby Webster, created buzz. This interaction suggested a level of familiarity and comfort among them. Despite the delay, the Raptors have expressed their eagerness for Leonard’s return and acknowledge the potential risks associated with the investigation’s outcome.
The official end date for the investigation remains unknown, though it is anticipated to conclude in the coming weeks.
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Source: nytimes.com
