In December 2021, Aspiration founder Joe Sanberg told company executives that the Los Angeles Clippers had approached him about an endorsement deal with Kawhi Leonard. Sanberg stated the arrangement was “important to the Clippers,” according to executives who were present that spoke with the Wall Street Journal. The $48 million, four-year endorsement contract is now at the center of an NBA investigation into potential salary-cap circumvention involving Clippers owner Steve Ballmer.
The deal called for Leonard to receive $20 million in Aspiration stock plus $28 million in cash, along with appearances and community-service events. Company executives questioned the terms, with one noting the contract price exceeded the cost of seven Super Bowl advertisements. The company ultimately balked at providing that much equity, and Sanberg agreed to contribute $20 million of his own stock to complete the transaction.
“This is important to the Clippers,” Sanberg said, according to a high-ranking executive’s recollection.
Marketing executives complained about significant red flags in the contract terms. Leonard, noted for being relatively quiet off the court, did not use social media despite being paid to introduce the public to Aspiration’s brand. A marketing director stated they should receive more than an eight-hour production day for the payment amount.
The 19-page contract required autograph signings, meet-and-greets, and community events. Company officials considered various marketing strategies, including a web series about reducing Leonard’s carbon footprint, but none materialized before financial troubles mounted.
The NBA commissioned a formal investigation after sports journalist Pablo Torre reported allegations that Ballmer used Aspiration to funnel cap-circumventing payments to Leonard. Ballmer stated he invested $50 million in Aspiration believing it was legitimate and later claimed he was “conned” by the company.
The Clippers denied breaking salary-cap rules. Ballmer told ESPN: “I made an investment in these guys, thinking it was on the up and up, and they conned me.”
Sanberg is scheduled to plead guilty to wire fraud involving $248 million in investor fraud. He admitted to falsifying financial documents and creating phony customers to misled investors. Aspiration, now operating as CTN Holdings, filed for bankruptcy listing debts between $100 million and $500 million.
Leonard never was announced as an official Aspiration spokesman, and he performed no significant work under the contract terms.
The Wall Street Journal also reported that top executives with Aspiration said there was never any discussion or speculation by senior executives that their company might be a way for the Clippers and Leonard to circumvent the Clippers.