In December 2022, Aspiration, a San Francisco-based environmental firm, was running out of money. Employees, including executives, were laid off. Outgoing payments were on hold, including to the firm’s expensive endorsement partner, LA Clippers star Kawhi Leonard.
That same month, according to the latest allegations made on the “Pablo Torre Finds Out” podcast that aired Thursday morning, Clippers minority owner Dennis J. Wong made an almost $2 million investment in Aspiration, which turned around and paid Leonard $1.75 million — as required through his endorsement contract with the environmental company.
The NBA announced last week that it is investigating the Clippers, majority owner Steve Ballmer and Leonard to determine if the league’s rules governing salaries were circumvented through Leonard’s business arrangement with Aspiration, allegations made by former Aspiration employees on a Sept. 3 episode of Torre’s podcast.
In Torre’s first podcast episode examining the relationships between the Clippers, Ballmer, Leonard and Aspiration, unnamed former Aspiration officials disclosed Ballmer’s $50 million investment into the company in September 2021 and Leonard’s endorsement contract with the same firm.
The contract called for him to be paid $28 million over four years beginning in April 2022 for a contract that did not require Leonard to do any work (while there were expectations outlined in the document, there was a clause that gave Leonard final refusal on anything he didn’t want to do). The Boston Sports Journal and The Athletic later reported that Aspiration gave Leonard an additional $20 million in stock from company co-founder Joe Sanberg’s personal stock options.
Also in September 2021, the Clippers announced that Aspiration was their new jersey and arena sponsor, a deal that was worth $300 million over 23 years.
Ballmer and the Clippers have repeatedly denied wrongdoing. Ballmer has stated that he was defrauded by Sanberg, who has agreed to plead guilty to federal charges of fraud (Aspiration is bankrupt). The Clippers have publicly suggested that there is evidence the team did not circumvent salary rules. The Clippers have not publicly shared this alleged proof.
The NBA has stated that it is seeking clear evidence before punishing the Clippers, so the latest allegations made by former Aspiration employees on the Torre podcast should be given scrutiny. It is against league rules for a team to pay its players additional salary outside of their league-approved contract.
If the NBA determines that Leonard’s deal with Aspiration was a form of cap circumvention, it could punish the Clippers by fining them millions, stripping away future draft picks or even voiding Leonard’s deal.
According to two former finance officials at Aspiration who appeared on the podcast, as well as company bank statements the Torre podcast obtained, Wong — who owns 1 percent of the Clippers, is the team’s alternate governor and was also Ballmer’s college roommate — made his first payment to Aspiration on Dec. 6, 2022, while it was clear the firm was losing money.
Leonard’s uncle and business manager, Dennis Robertson, was reportedly upset that a quarterly payment had been missed. Aspiration paid Leonard on Dec. 15 — the same day the company laid off 20 percent of its employees, or about 100 people, according to the podcast.
“It is beyond shocking, and I will tell you, I knew that the board (of directors at Aspiration) had put (in) money in December to make payroll and make rent… (so) it is not a rational investment that someone (Wong) would make,” one of two anonymous former Aspiration employees said on the podcast. “So it is very shocking to me that $2 million was made as an investment by Dennis Wong, who in my texts is identified as … Steve Ballmer’s partner a week before $1.75 million was paid to Kawhi.”
A second anonymous former Aspiration official, who is identified as one of the sources who made the initial allegations last week, said, “There’s multiple things that are conspicuous. One, we’re broke. We’re broke. So to invest in a broke company is beyond me. … And then the other thing is the amount that’s being invested, that’s such a nominal amount if we’re talking pure investment, especially in a late-stage startup that’s … already raised a year earlier $300 million (sic), what does $2 million buy you?”
Asked for comment on the latest report, NBA spokesperson Mike Bass said in a statement Thursday: “The Clippers situation is currently under investigation.” The Clippers did not immediately respond to messages from The Athletic seeking comment.
On the podcast, Torre stated that he obtained a confidential stock purchase agreement from Aspiration, dated Dec. 9, 2022, in which DEA 88 Investments, a limited partnership owned by Wong, purchased 0.072 percent of the environmental firm. In that agreement document, it says Aspiration was “in default.” Its independent auditor, KPMG, had resigned, and the company was already facing lawsuits worth millions for missed payments.
Leonard’s contract with Aspiration stipulates he was to be paid $7 million annually in quarterly installments of $1.75 million. He received his first payment on July 6, 2022, a week past the contractually set deadline of June 30. Aspiration missed a payment to Leonard in the fall before making the payment in December, following Wong’s wire transfer to the firm.
According to a cash forecast for sponsor payments obtained by the podcast, payments to Leonard were marked “critical.”
“In all fairness to Uncle Dennis (Robertson), he’s not the only one who’s calling trying to get paid,” one of the former Aspiration employees said on the podcast. “There’s a huge freeze because there’s no money to be spent. So from the finance team’s perspective, we feel like we’re on the other end of collections calls. People are constantly coming in asking for their money.
“Between those months when all of this is missing — so September, October, November, and leading up to December, the actual certainty of the company even existing is up for grabs. At that point, are we gonna get paid as employees? Why does Uncle Dennis keep calling us? We have such bigger concerns that we’re thinking about, which is our own salaries. Are we gonna have to go through layoffs? Where is the money gonna come from?
“But lo and behold. Uncle Dennis gets paid.”
On Wednesday, NBA commissioner Adam Silver suggested a league investigation would need to uncover strong evidence linking the Clippers and Ballmer to Leonard’s deals with Aspiration for Silver to penalize the Clippers. Silver said he would be “reluctant to act” without substantial proof.
“I think 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 would want anyone else in situations Mr. Ballmer is in now — and Kawhi, for that matter — to be treated the same way I would want to be treated if people were making allegations against me.
“We’re not a court of law at the end of the day, either.”
Silver said the burden of proof lies with the league if it is to punish the Clippers, Ballmer or Leonard.
Last week, The Athletic reported that the NBA hired law firm Wachtell, Lipton, Rosen & Katz to lead its investigation.
(“Pablo Torre Finds Out” is an independently produced show licensed by The Athletic and distributed on its podcast network.)
(Photo of Leonard by David Dow / NBAE via Getty Images)
