David Stern ruled the NBA with an iron fist. During his first decade as Stern’s successor, Adam Silver has governed with a slap on the wrist.
Silver got a fastball down the middle to begin his tenure as NBA commissioner when he banned Donald Sterling for life and forced him to sell the Los Angeles Clippers after recordings of racist comments were surfaced by TMZ. Steve Ballmer bought the franchise from Sterling’s wife for a cool $2 billion, in the process smashing the record for a franchise sale and accelerating the value of teams around the league.
Ballmer is one of the 10 richest men in the world, and by far the richest owner in the NBA. He could have done anything he wanted with his money, and he chose to make Los Angeles’ other NBA team a world-class organization that could attract superstars and compete with the Lakers for a future marketshare of the city’s heart.
Ballmer’s big moment arrived in 2019 when the Clippers signed Kawhi Leonard and traded for Paul George in one fell swoop. Leonard had just led the Toronto Raptors to an improbable championship, and his entry to the Clippers appeared to immediately make them the league’s title favorites. Ballmer would spare no expense to build a fantastic front office, hire the game’s top coaches, and eventually, build a state-of-the-art arena that his team didn’t need to share with the Lakers.
Ballmer was the dream owner for any type of fan: he valued winning above anything else, threw his wealth around with no hesitation, and spared no expense not just in building the roster, but also creating an elite organization from top to bottom. In a league without a salary cap, it’s easy to imagine Ballmer angling for contracts similar to the one Cristiano Ronaldo signed in Saudi Arabia.
Of course, the Clippers haven’t been able to waltz into a championship like Ballmer hoped. Leonard has rarely been available since signing with the club, the Paul George trade that sent Shai Gilgeous-Alexander and the pick that turned into Jalen Williams back to Oklahoma City is an all-time disaster, and the team has only won three playoff series in six seasons.
The Clippers’ recent failures certainly aren’t for a lack of trying. Now the whole league is wondering if Los Angeles tried to win so badly that it skirted the league’s most important rules.
Journalist Pablo Torre uncovered a bombshell last week with a report of alleged salary cap circumvention to re-sign Leonard back in 2021. My colleague James Dator already covered the details of the report, but the short version is that Ballmer invested $50 million in a carbon emissions offset company called Aspiration, Aspiration agreed to a $300 million sponsorship deal with the Clippers, and then Leonard agree to an endorsement contract with Aspiration that paid him $28 million over four years.
What’s so fishy about a team sponsor signing a star player to an endorsement deal? In this case, it’s two things in particular:
- The company never announced the marketing deal, and Leonard did zero work for his money
- The $7 million deal dwarfed what other celebrities like Robert Downey Jr. and Drake got from the company for actually activating the partnership. The amount of money is simply way out of line with Leonard’s value as a pitchman for a tree planting company even if it wasn’t a no-show job.
The Clippers have already issued two statements on the matter even before Ballmer went on TV to do a sitdown interview with Ramona Shelburne. The NBA has responded by hiring the country’s No. 1 law firm to investigate the Clippers just as it sets to host a board of governors meeting in New York this week.
Torre’s reporting did not uncover a smoking gun, ie: a piece of paper that says “Steve Ballmer gave money to Aspiration to redirect to Kawhi because he could only pay him so much on a max salary.” The Clippers have some plausible deniability here if you squint hard enough. At the same time, there’s no reason Leonard should have been paid an extra $7 million per year for a no-show endorsement gig the company couldn’t even bother to publicize, even explicitly stating in his contract that he had veto power over everything.
The NBA needs to come down hard on the Clippers — and no, that doesn’t mean booting Ballmer from the league. As the league investigation into Torre’s allegations begins, there are already a few reasons why the Clippers are already guilty to some extent.
The NBA doesn’t need a smoking gun to punish the Clippers
Zach Lowe did some of the best analysis on the Ballmer allegations on his podcast. Lowe found the passage in the CBA that says the league can punish the Clippers with circumstantial evidence.
Such an agreement with a sponsor or business partner or third party may be inferred where: (i) such compensation from the sponsor or business partner or third party is substantially in excess of the fair market value of any services to be rendered by the player for such sponsor or business partner or third party; and (ii) the Compensation in the Player Contract between the player and the Team is substantially below the fair market value of such Contract.
Related to section 2-Unauthorized Agreements which involves “(A) At no time shall there be any agreements or transactions of any kind… (iii) involving an investment or business opportunity to be furnished or made available by, to, or for the benefit of the player”
A violation of Section 2(a) or 2(b) above may be proven by direct or circumstantial evidence, including*, but not limited to, evidence that a Player Contract or any term or provision thereof* cannot rationally be explained in the absence of conduct violative of Section 2(a) or 2(b).
The Clippers’ initial statement called Torre’s claims “provably false” but they’ve yet to share anything that shows it. There’s already more than enough circumstantial evidence to fit the criteria for a punishment just based off what Torre found.
Leonard’s camp was investigated for improper benefits before
The NBA investigated claims that Leonard’s camp, led by his uncle Dennis Robertson, asked franchises for improper benefits during his 2019 free agency. Here’s what The Athletic’s Sam Amick wrote in 2019: “Sources say the league was told that Robertson asked team officials for part ownership of the team, a private plane that would be available at all times, a house and — last but certainly not least — a guaranteed amount of off-court endorsement money that they could expect if Leonard played for their team.”
Here’s a line of context from Amick:
While sources with knowledge of the investigation said no evidence was found indicating that the Clippers had granted any of the lavish requests, the underlying message coming from Commissioner Adam Silver remains: He sees salary cap circumvention as a cardinal sin in the NBA, and will always keep a watchful eye on that front. If any relevant evidence of improper benefits surfaces in the future, the league will re-open the investigation and pursue the charges yet again.
A report by the Toronto Star’s Bruce Arthur on Tuesday alleged that Leonard’s camp asked the Raptors for a slice of ownership of the Toronto Maple Leafs, plus $10 million extra per year guaranteed endorsement income during their free agent negotiations in 2019. John Karalis of Boston Sports Journal also uncovered that Leonard was promised an additional $20 million in stock that he never got — essentially lining up perfectly with Ballmer’s investment. Where there’s smoke, there’s usually fire. There’s been a lot of smoke with Kawhi and Uncle Dennis, and it sure seems like Torre uncovered the missing piece of the NBA’s initial investigation.
This is why the new CBA has the second-apron
Not all billionaires are created equal. In the latest CBA, the owners realized they needed the upper tiers of the luxury tax needed to come with more punitive measures than just extra money. Today, the second-apron limits could trigger real obstacles for team-building, including freezing draft picks and being unable to aggregate salaries in trades. The NBA put this into place so owners like Ballmer and Joe Lacob of the Warriors couldn’t just spend their way to success. This sure looks like Ballmer found a way to go around the very measures put in place to deter lavish spending.
A cynic could say that maybe some faction of the owners pushed for the second-apron just to get an excuse for keeping payroll down. Owners like Jerry Reinsdorf of the Chicago Bulls get an eight-figure handout every season just for not paying the luxury tax. If the NBA is to operate under a guise of fairness, going around to cap to monetarily reward a star player really should be the ‘cardinal sin’ silver once referenced.
The NBA needs to deter future owners from cap circumvention
The NBA has opened up more avenues for franchise investments in recent years as valuations soared into the billions. The NBA has started to embrace private equity, pension and endowment funds, and even sovereign wealth funds for minority shares. The Celtics were bought for $6.1 billion this summer, while the Lakers were purchased for $10 billion by Mark Walter.
What’s to stop new ownership groups from bending the rules even further if Ballmer only gets a slap on the wrist? The league has already decided to take tampering seriously enough to dock second round picks and make sure free agency deals don’t get announced from the second the moratorium starts. It felt like those punishments were more about optics. There’s an optics factor to the Ballmer allegations, too, but it’s also far more of a competitive advantage than anything else franchises have tried over the years.
What’s a fair punishment?
The cap circumvention penalties in today’s CBA aren’t nearly as punitive as what the Timberwolves faced following the Joe Smith fiasco, when they were docked five first-round picks (two were returned on appeal) and Smith’s contract was voided. Right now, it appears fines up to $10 million, the loss of a first-round pick, and voiding Leonard’s deal is the maximum punishment, potentially with a suspension for Ballmer or Clippers higher-ups thrown in.
That seems right to me. The fine doesn’t mean anything to Ballmer — it essentially amounts to change found in the cushion for him. The loss of a first-round pick is a real deterrent and will complicate the Clippers’ team-building plans going forward. The Clippers not-so-secretly will try to make another big free agent splash as this era of the team with Leonard and James Harden phases out. The Clippers will be swinging for their next franchise star in the coming years the same way they did with Kawhi. If they only get a slap on the wrist, what’s to stop them or another big market bully from trying to pull off a similar scheme?
Silver hasn’t exactly exactly earned a reputation as a swift enforcer. A domestic abuser like Miles Bridges essentially earned only a 10 game suspension after the league said the first 20 games of his suspension counted while he was unsigned the previous year. He hasn’t done enough to deter tanking despite some tough talk, and the only time he really dropped the hammer seemed like an overstep — when Ja Morant kept posting videos of himself waving guns on social media in a concealed carry state and got a 25-game suspension.
Silver works for the other 29 owners. How those owners feel about the Ballmer allegations will go a long way toward determining the punishment. Silver’s job is both to make money for the league and uphold its integrity. It’s the second part that’s threatened by Torre’s report. Ballmer has unquestionably been a great owner for the NBA. You can make an easy argument that it’s not in the league’s best interest to give him a huge punishment. This is really a question of integrity, and what the NBA can do to protect it. Taking away two future first-round picks and making an example out of the Clippers would be a good first step to trying to prevent this from happening again.
