NBA investigating second Kawhi Leonard sponsorship deal as part of Aspiration probe: Sources (Gift Article)
LAS VEGAS — As Kawhi Leonard watched a Toronto Raptors game courtside at Thomas & Mack Arena Monday night, he sat several seats down from the franchise’s general manager and its former governor. He is a former Raptors star and seemingly a future one, but for now he remains in limbo. As the NBA’s probe into Leonard’s no-work sponsorship deal with a formerly little-known environmental company enters its 11th month, it has brought the player and team in the middle of it to a standstill.
While the LA Clippers, Leonard and now the Raptors all wait for a conclusion, the investigation has grown in scope since it began, according to multiple sources who spoke to The Athletic on the condition of anonymity in order to speak freely. Not only has Wachtell Lipton, the league’s go-to law firm hired to conduct the inquiry, inspected if the Clippers circumvented the NBA salary cap by facilitating a sponsorship deal for Leonard with Aspiration, it has also looked into whether the Clippers improperly covered expenses for Leonard but were not reimbursed for them, those sources said. And the firm has examined if Leonard had a previously unreported endorsement deal with another company, those sources said.
The investigation has been a source of intrigue and frustration around the NBA this season. Last week, Toronto paused a trade to bring Leonard back after the league informed the Raptors they would bear the risk of any punishment resulting from the investigation if they acquire Leonard. While a team source denied that the delay is an implication that Toronto fears or expects some penalty, it does show how the probe is already creating consequences even as it continues to examine possible cap circumvention by the Clippers.
Although NBA commissioner Adam Silver said last month that he hoped the investigation would wrap up soon, he could offer some answers at his Board of Governors news conference Tuesday but the league has offered no inkling of where the investigation is headed. Some team executives around the league have increasingly come to expect that the league will punish the Clippers.
The Clippers and owner Steve Ballmer have vehemently denied any wrongdoing. Ballmer has said he was the victim of fraud and one of many who lost money in a company that went bankrupt and saw its co-founder plead guilty to federal fraud charges.
“We don’t think that there’s a ‘there’ there,” National Basketball Players Association executive director David Kelly said. “It should not take this long in order for something to get wrapped up.”
The origin of the investigation remains Leonard’s contract with Aspiration, for which he was to be paid $28 million until the company ran into financial issues and ultimately filed for bankruptcy. Leonard never publicly promoted the company. The “Pablo Torre Finds Out” podcast was the first to report its existence in September. As the NBA tries to wrap up its investigation, former Aspiration employees — who have spoken anonymously with The Athletic over the last 10 months to ensure their candor during an open investigation — still do not know definitively if the deal was intended to bypass the cap, though they have their opinions.
Several believe only Aspiration co-founder Joe Sanberg knows for certain. Some say that Aspiration made authentic attempts to market Leonard but failed, in part, because the NBA star was such a poor choice as a spokesman. This spring, Sanberg was sentenced to 14 years in federal prison after he pleaded guilty to two counts of wire fraud, but has spoken to the NBA’s investigators.
Others have come to believe that cap circumvention was at play.
“The conclusions that people seem to be drawing don’t seem unreasonable to me,” one former high-ranking executive said. “No person knowledgeable about the Aspiration customer would think it was a good idea to invest in Kawhi Leonard that amount of money.”
The Clippers, a representative for Leonard and an attorney for Sanberg did not respond to questions and requests for comment from The Athletic by publication time. The NBA declined to comment for this story.
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Leonard’s deal became a point of confusion for Aspiration executives who spoke to The Athletic. They did not see Leonard as a natural spokesman for the company because of his detached public profile, limited social media presence and what they believed was a lack of fit to market the product.
Aspiration did discuss using Leonard in a marketing campaign, multiple former employees told The Athletic. Executives exchanged emails with members of the Creative Artists Agency on potential concepts. And members of Aspiration’s marketing department were told they could use Leonard to promote the company and to try to find a way to do so, one person with knowledge of Aspiration’s marketing strategy said.
Leonard was, that person said, difficult to build a campaign around. Despite his basketball accomplishments, his wider public profile was small and, in the eyes of Aspiration’s marketing employees, he lacked the notoriety of other NBA stars. That made the naturally introverted Leonard a difficult muse. Some in the department heard that Leonard was into comic books and superheroes, so that was floated as a concept. The efforts went so far as to create images, reviewed by The Athletic, of Leonard as an offshoot of Marvel’s Groot – Aspiration’s purpose was a promise to plant trees to offset carbon footprints.
But after weeks of trying to work with the Marvel concept and brainstorm other ideas, the creative team was told to quit, according to multiple former Aspiration marketing employees.
“Stop thinking about Kawhi,” the person said they were told. “This feels like a dead end.”
The team had been unable to come up with anything worth pursuing.
“Nothing ever came from it,” another former Aspiration employee said. “I’m not sure why it died, whether it was on our end or his end or if we couldn’t figure out a concept.”