There are few things that should be less surprising than the Los Angeles Clippers (allegedly) using the enormous financial might of owner Steve Ballmer to retain the services of superstar forward Kawhi Leonard.
What is surprising is that he might have been caught.
Money, to someone of Ballmer’s wealth, is immaterial. As of Tuesday morning, the former Microsoft CEO had a net worth of $174 billion. He’s made $27 billion so far this year, according to the Forbes Billionaires Index.
That makes him the seventh richest person in the world, and way, way richer than even really rich people. Miriam Adelson, the Dallas Mavericks owner best known for signing off on the Luka Doncic trade, has to get by on a paltry $41 billion. Dan Gilbert, who owns the Cleveland Cavaliers, is worth $36.5 billion, depending on what he can find between the couch cushions on a given day.
Normal people can’t really comprehend how much money we’re talking about here.
But here’s one measure: Leonard, who led the Toronto Raptors to their 2019 NBA title, is set to earn $50 million this coming season. At that rate, Ballmer could hire an army of 1,000 similarly paid stars and still have $173 billion to spend.
All of which is to say that the report from journalist Pablo Torre on his well-regarded podcast, Pablo Torre Finds Out, that Leonard earned $28 million for a ‘no-show’ endorsement deal from a (now bankrupt) tree planting company shouldn’t be all that shocking.
It’s worth listening to or watching the entire episode, but this four-minute social media clip sums it up nicely:
The gist: Ballmer invested in a company called Aspiration that featured a number of high-profile spokespeople (Drake, as well as actors Leonard DiCaprio and Robert Downey Jr., for example) but the one who was paid the most was Leonard. According to Torres’ report, the contract allowed Leonard to refuse any request made of him, and there is no record of Leonard ever doing any kind of promotional work for the company.
And, according to the report, the contract was only valid as long as Leonard was playing for the Clippers.
When asked for comment, NBA spokesman Mike Bass told Sportsnet: “We are aware of this morning’s media report regarding the LA Clippers and are commencing an investigation.”
For Raptors fans, it might offer some small measure of gratification, if not any actual satisfaction.
When Leonard bolted for the Clippers while the champagne from the championship celebration was still sticky in the summer of 2019, there were rumours that Ballmer and the Clippers had used financial incentives above and beyond the three-year, $104-million contract Leaonard signed with the Los Angeles team to close the deal.
Remember, the Raptors were prepared to offer Leonard a deal worth $190 million over five years, the richest deal any team could offer since he was a returning player. At the time the ‘somewhat’ plausible explanation for Leonard — plagued by injuries even then — leaving $86 million guaranteed on the table was because he wanted to go home to Southern California above all else. Also, by signing a shorter-term deal Leonard could sign a new contract when he had finished his 10th season and was eligible for a contract that would pay him 35 per cent of the salary cap, compared to the 30 per cent the Raptors could have offered Leonard after his eighth season, which is how he would make up the guaranteed money he was risking by leaving Toronto
But whispers from league sources at the time were that Leonard’s uncle and adviser, Dennis Robertson, was asking for all kinds of additional compensation for Leonard, including an ownership stake in whichever franchise he would sign with.
The Raptors weren’t the only team to complain to the league office, and NBA commissioner Adam Silver did investigate, but found no wrongdoing. That could be because nothing happened — just because a player’s relative asks for something, doesn’t mean they got it — or it could be because finding the violation was beyond the league’s investigative abilities.
What if an owner decided to offer a player an incentive via cryptocurrency? Or a suitcase full of cash? Or bricks of gold bullion? Or stock tips whispered to a third party?
All of which is forbidden under the league’s collective bargaining agreement, which outlines exactly how, when and how much teams can pay players in excruciating detail.
But good luck trying to track down those kinds of under-the-table dealings.
Which is what makes this case so fascinating. The paper trail detailed in Torre’s reporting points to Leonard profiting from a company affiliated with Ballmer.
Allegedly shovelling an extra $28 million to a player through a company attached to the team’s owner for doing nothing would seem to violate not only the spirit of the CBA, but the letter of it, as outlined in section 13 of the document where neither players or teams can “undertake any action or transaction … designed to serve the purpose of defeating or circumventing” the provisions laid out in the exhaustive 560-page document.
If the allegations are proven true — and the Clippers have stoutly denied them in a statement provided to Torre: “Neither Mr. Ballmer nor the Clippers circumvented the salary cap or engaged in any misconduct related to Aspiration. Any contrary assertion is provably false” — the penalties could potentially be significant if Silver chooses to bring down the proverbial hammer.
The league can impose a $4.5-million penalty on first offence, but fines clearly won’t be much of a deterrence to Ballmer. Having to potentially forfeit a first-round pick or picks would certainly get his attention. The CBA also allows for the league to void the player’s contract, but it’s hard to imagine the NBA going to that extreme, and in any case the timeline of the endorsement deal lines up with the contract Leonard signed in 2021 (four years, $176 million) and the Clippers star has since signed a new, three-year deal that kicks in this season. The league could also suspend Ballmer and Clippers executives.
This is new territory for the league. While under-the-table payments get chattered about — NBA superstars are arguably underpaid given the hundreds of millions of dollars in equity value the likes of LeBron James, Steph Curry or Shai Gilgeous-Alexander can deliver to team owners — there is no case in league lore like this one.
But there is precedent on how the matter might be dealt with.
When Silver said the league office was investigating the Clippers back in 2019, he described salary-cap circumvention as the league’s “cardinal sin.”
Proof is that the last time a team was caught for cap circumvention the punishment was the so-called ‘death penalty’. It was levied back in 2000 when the Minnesota Timberwolves were required to forfeit five first-round picks, fined $3.5 million and had then-owner Glen Taylor suspended for a one year for convincing free-agent Joe Smith to sign a series of below-market deals so they could build a supporting cast around superstar Kevin Garnett.
Then-Timberwolves GM Kevin McHale officially denied any wrongdoing in the matter: “I haven’t read a contract in four or five years,” he said at the time, but added that these kinds of arrangements were not uncommon: “There are eight to 10 teams that do this all the time. They’re just good at it. We’re bad.”
It turns out the Clippers might not be much better. The way this is all blowing up, maybe the play would have been to bury a sack of cash in the backyard of Leonard’s San Diego mansion.
Depending how it shakes out, it could significantly impact the Clippers’ competitive future.
Which might give Raptors fans some sense of satisfaction. Yes, what seemed like a raw deal at the time — having Leonard leave to join a worse team for less money seemed fishy at the time — could well have been fishy.
But it won’t bring back Leonard, or the championships he and the Raptors likely left on the table when he took the Clippers’ money in any form.
