salary cap rule

NBA commissioner Adam Silver on Wednesday pulled back the reins as allegations swirled about the Clippers circumventing the salary cap by orchestrating an endorsement deal for star forward Kawhi Leonard.

Silver, speaking to the media after a previously scheduled meeting of all 30 team owners in New York, said an NBA investigation would need to uncover clear evidence that the Clippers violated rules for owner Steve Ballmer to be punished.

“The burden is on the league if we are going to discipline a team, an owner, a player or any constituent members of the league,” Silver said. “I think, as with any process that requires a fundamental sense of fairness, the burden should be on the party that is, in essence, bringing those charges. …

“I think as a matter of fundamental fairness, I would be reluctant to act if there was sort of a mere appearance of impropriety.”

The Clippers and Ballmer are under league investigation after it was alleged last week on the podcast of Pablo Torre that Leonard was paid $28 million for a do-nothing endorsement role by Aspiration, a sustainability firm that had agreed to a $330-million sponsorship deal with the Clippers and had offered $1 billion for naming rights to the arena that instead became the Intuit Dome.

Aspiration turned out to be a fraudulent company, and co-founder Joseph Sanberg has agreed to plead guilty to defrauding multiple investors and lenders.

Silver said he would hesitate to take action against the Clippers if even a shred of doubt about the situation remains following the investigation, which will be conducted by a law firm experienced in probing wrongdoing by sports franchises, Wachtell, Lipton, Rosen and Katz.

“Bringing in a firm that specializes in internal investigations adds a level of expertise and creates separation between the league and the investigation of a team,” said Michael McCann, a sports law expert and a visiting professor at Harvard. “The investigators have a background in prosecutorial work, insight into what documents to request and questions to ask.”

McCann and other legal experts said the investigation would center on whether Ballmer’s $50-million investment into Aspiration was a quid pro quo for the firm to turn around and give Leonard $28 million in cash and $20 million in Aspiration stock to essentially do nothing.

Ballmer is embarrassed by the allegations and about his apparent infatuation with Aspiration — which entered into a $330-million sponsorship arrangement with the Clippers and was nearly awarded naming rights to what became the Intuit Dome, only to be revealed as a fraudulent company run by scam artists.

McCann said the investigation would need to uncover concrete evidence that Ballmer or someone else representing the Clippers directed Aspiration to make the deal with Leonard. The only evidence presented on Torre’s podcast was hearsay — an audio clip of an anonymous former Aspiration employee saying that someone else in the company told them the endorsement deal “was to circumvent the salary cap, LOL. There was lots of LOL when things were shared.”

LOL typically is used in written communication, so if the allegation was made in an email or text, the next step for investigators would be to interview the person who wrote it and determine whether Ballmer was involved.

The investigation presumably will examine all of this. Silver tends to be methodical when conducting a probe and is expected to act on what can be proved, not on the perception of wrongdoing. But he also is charged with protecting and growing franchise values. Anything that could damage the integrity of the league would be a huge concern to him and team owners.

“Silver has quite a few very interesting relationships to protect and to nurture: other owners, his corporate sponsors, the media networks that are distributing the content,” said David Carter, a USC professor of sports business and principal of the Sports Business Group. “Everybody attached to the league is interested in getting to the bottom of this. So he has to balance different stakeholder interests and he is very good at doing that.

“So I have a feeling he will — working with the law firm — get to the bottom of it and then decide to what extent if any punishment is warranted. He’ll do that with the intent of making sure he’s protecting the interests of the other owners.”

Leonard joined the Clippers in July 2019 on a three-year, $103-million contract after leading the Toronto Raptors to the NBA title. The 6-foot-7 forward from Moreno Valley signed a four-year, $176.3-million extension in 2021, when Aspiration made its sponsorship deal with the Clippers and Ballmer invested and became a minority owner in the company.

After signing a three-year, $153-million extension a year ago, Leonard will have been paid or is under contract for $375 million in career salary over 14 years with three teams.

The NBA looked into allegations that the Clippers paid Leonard or his representative and uncle, Dennis Robertson, a side deal when he first joined the team in 2019. No wrongdoing was found, although this week the Toronto Star reported that Robertson made demands of the Raptors in 2019 “that line up almost perfectly with what Leonard reportedly got from Aspiration.”

The Star reported that Robertson demanded $10 million a year in sponsorship income but that Leonard didn’t want to do anything for the money. The Raptors rejected the demand, and Leonard signed with the Clippers.

Should the Clippers be found guilty of circumventing the salary cap, they could be forced to forfeit draft picks and be fined heavily. Ballmer and other team executives could be suspended, and perhaps Leonard’s contract could be voided.

Silver will proceed carefully.

“The goal of a full investigation is to find out if there really was impropriety,” he said. “In a public-facing sport, the public at times reaches conclusions that later turn out to be completely false. I’d want anyone else in the situation Mr. Ballmer is in now, or Kawhi Leonard for that matter, to be treated the same way I would want to be treated if people were making allegations against me.”

NEW YORK — The NBA will not rush to any judgment in its probe of whether a business relationship between Kawhi Leonard and a California company was legitimate or merely a way for the Clippers to circumvent salary cap rules, Commissioner Adam Silver said Wednesday.

Silver spoke after a board of governors meeting in New York — one that Clippers owner Steve Ballmer attended — and said the league will wait to see the report from the outside firm it has hired to run its investigation before taking next steps.

“We’re constantly learning in the league office and again, I’m reserving judgment because I don’t know the facts here,” Silver said. “I don’t know what Kawhi was paid. I don’t know what he did or didn’t do. We’ll leave all that for the investigation.”

The NBA opened its investigation last week into whether a $28 million endorsement contract between Leonard and sustainability services company Aspiration Fund Adviser, LLC — one that filed for bankruptcy earlier this year — broke league rules, following a report by journalist Pablo Torre.

The Clippers have strongly denied that any rules were broken and said they welcomed the league’s investigation.

“I think as a matter of fundamental fairness, I would be reluctant to act if there was a mere appearance of impropriety,” Silver said. “I think the goal of a full investigation is to find if there really was impropriety. … I would want anybody else in the situation that Mr. Ballmer is in now or Kawhi Leonard for that matter, to be treated the same way I would want to be treated if people were making allegations against me.”

Ballmer made a $50-million investment in Aspiration, and the company and the team announced a $300-million partnership in September 2021. That was about a month after Leonard signed a four-year, $176-million extension with the Clippers.

The team ended its relationship with Aspiration after two years, saying the contract was in default. Aspiration’s co-founder, Joseph Sanberg, agreed to plead guilty last month after facing federal charges of wire fraud. Prosecutors said he defrauded investors and lenders out of $248 million, adding that “Aspiration’s financial statements were inaccurate and reflected much higher revenue than the company in fact received.”

The league — which previously looked into claims that Leonard’s representatives asked for certain things that would be considered cap circumventions when he was a free agent several years ago — can issue stiff penalties if cap rules are found to have been broken by a team, including a fine of up to $7.5 million, the voiding of contracts and the forfeiture of future draft picks.

“I’m a big believer in due process and fairness and you need to now let the investigation run its course,” Silver said, adding that he has “very broad powers” when determining penalties if wrongdoing is found.