The Los Angeles Clippers and team owner Steve Ballmer are currently under investigation by the NBA for alleged cap rule violations, specifically concerning a “no-show” endorsement agreement for Kawhi Leonard involving the now-bankrupt Aspiration company. More information is emerging regarding this situation.
Pablo Torre, a sports journalist specializing in investigative reporting, initially reported this story on his podcast, “Pablo Torre Finds Out.” On Thursday morning, a fourth episode dedicated to this controversy was released, providing additional reporting and further specifics about alleged funding from Ballmer and the Clippers into Aspiration, even after the company’s difficulties became evident. The episode includes noteworthy revelations related to Leonard.
The most significant detail involves three instances of prepaid carbon credit acquisitions by the Clippers in 2022 – two years before the Intuit Dome’s inauguration – totaling $56 million. These transactions occurred between April 1, 2022, and June 17, 2022, closely aligning with Leonard’s signing of his agreement with Aspiration and the deadline for his initial quarterly payment. A $32 million carbon credit purchase occurred on April 4, the same day Leonard formalized his endorsement deal. It’s worth noting that this deal was not publicly disclosed, and Leonard did not perform any actual duties related to it, aside from receiving payment.
This is significant, considering that Mark Cuban, who has publicly defended Ballmer in connection with this controversy, suggested on Twitter that “a simpler and safer” method of bypassing the CBA would have involved buying additional carbon credits rather than simply investing in the company.
In their explanation, the Clippers stated that the substantial carbon credit purchases were intended not only to compensate for the Intuit Dome’s environmental impact but also to exceed those obligations:
Steve and his family maintain a strong focus on ecological responsibility. As a result, the Intuit Dome was intentionally designed as a carbon-neutral structure from the beginning, striving to achieve LEED Zero recognition over time.
Our arena development agreements included provisions mandating the purchase of carbon credits, but after a thorough examination of the neutrality issue, we chose to surpass these requirements. We actively pursued methods to address emissions generated by our fans and contracted with Aspiration to directly acquire carbon offsets, in addition to facilitating the acquisition of supplementary offsets.
Some of these commitments were incorporated into the sponsorship agreement with Aspiration – entirely independent of the investment in the company. We continued making payments to Aspiration until the company became unable to fulfill its responsibilities.
This initiative showcases Steve’s aspiration to serve as a positive example and raise awareness regarding the increasing significance of voluntary carbon markets. Regrettably, both he and numerous other investors and employees were deceived concerning the investment and certain aspects of this agreement.”
Torre also investigated a $10 million investment made by Ballmer’s LLC in March 2023. While Ballmer has primarily asserted that Aspiration defrauded him, this investment transpired considerably after Aspiration’s difficulties commenced, and all associated problems had to be disclosed in contractual documents. Ballmer’s final investment took place just weeks before a government investigation into the company began and three days after Forbes published an article detailing the “floundering” company’s predicament.
This sequence of events introduces additional questions regarding Ballmer’s claim that he was simply defrauded like everyone else. Torre also revealed that Ballmer’s latest investment for company stock, which was explicitly stated to be in default within contractual documents, was made at $23 per share – more than double the initial share price of $11 he had paid back in September 2021.
Ballmer and Clippers’ limited partner Dennis Wong, who reportedly invested $2 million in Aspiration just before a late payment was made to Leonard, represented the only additional investors in Aspiration’s most recent fundraising round. Torre discovered that 19 investment firms declined their participation in what Aspiration founder Joe Sandberg described in a deposition, revealed by Torre, as a “vigorous” attempt to secure funding in late 2022 and early 2023.
The outstanding question for the NBA revolves around the exact implications of these circumstances in proving that the Clippers circumvented the salary cap. While we are aware of the Clippers’ defense, which involves the justification of the substantial carbon credit purchase based on their provided statement, the sustained investment in Aspiration, despite the lack of interest from other parties, by a typically shrewd businessman is raising some concerns. While it is conceivable that Ballmer made an unwise investment, the present question centers on his rationale for continued investment when others opted against it.
The league will need to determine whether this evidence is adequate or if it is excessively circumstantial to justify significant penalties. A key issue is that as more details about the situation emerge, public opinion is being shaped – not only among fans but also among other team owners and personnel across the league.
