Raptors Rumors

Bruce Arthur of The Toronto Star (subscription required) has added another fascinating detail to the Kawhi Leonard/Clippers saga, reporting that when the Raptors were negotiating with Leonard in 2019’s free agent period, his camp asked the team for an arrangement that lines up with the deal the star forward eventually got with the company Aspiration. According to Arthur, the demands made by Leonard’s uncle and representative, Dennis Robertson, included $10MM per year in extra sponsorship income.

The Raptors weren’t permitted to negotiate or have any involvement in those off-court sponsorship deals, but suggested there would be corporate sponsors eager to have Leonard as a promoter. However, they were told by Leonard’s camp that he didn’t want to have to do anything for that extra money, such as filming advertisements or making promotional appearances.

“That’s when the Raptors realized Leonard wasn’t asking to be introduced to Toronto’s lucrative corporate community,” Arthur writes. “They were being asked to arrange no-show jobs, and arrange no-investment investments. (They) rejected both proposals.”

Arthur previously reported that Leonard’s camp asked for a stake in the NHL’s Toronto Maple Leafs, who share an ownership group with the Raptors.

Leonard and the Clippers are being investigated by the NBA after reports indicated that Aspiration – a Clippers sponsor that received a $50MM investment from team owner Steve Ballmer – agreed to pay the two-time Finals MVP $28MM, plus an additional $20MM in company stock.

While it was ostensibly an endorsement deal, Leonard wasn’t contractually obligated to actually do anything to earn that $28MM, which represented an unusually high amount for any sort of off-court sponsorship agreement. The league is looking into whether the Clippers were essentially funneling money to Leonard via Aspiration in order to circumvent the salary cap.

Here are a few more notes on the subject:

• Appearing on NBA Today on Monday (Twitter video link), ESPN’s Ramona Shelburne reported that Aspiration offered almost double the $550MM that Intuit did for the naming rights to the Clippers’ arena, but the Clippers opted to go with the more well-established brand. “That gives you an indication of the kind of money that (Aspiration) was throwing around back in those days,” Shelburne said.
• During that same NBA Today segment (Twitter video link), ESPN’s Dave McMenamin said that a Clippers source likened a tampering violation to a speeding ticket and salary cap circumvention as a “murder charge,” the implication being that the team knows not to cross that red line. The team has conveyed that it is “welcoming” the NBA’s investigation into the matter, McMenamin adds.
• Eric Pincus of Bleacher Report explores three potential outcomes of the NBA’s investigation into the Clippers and Leonard, ranging from the Clippers getting off scot-free to the organization (and Leonard) facing a Timberwolves/Joe Smith-style punishment. When the NBA learned in 2000 that the Timberwolves had entered into an illegal contract with Smith to circumvent the cap, it fined the organization $3.5MM, took away five first-round picks (two were later returned), and voided Smith’s contract.

Following up on Pablo Torre’s report on the possibility of salary cap circumvention involving the Clippers and star forward Kawhi Leonard, John Karalis of Boston Sports Journal provides some fascinating additional details, citing a “high-level” source who says Leonard made a side deal with the company Aspiration to receive an additional $20MM in company stock on top of the $28MM from his original endorsement agreement.

Co-founder Andrei Cherny didn’t run the $28MM endorsement deal Leonard signed by the company’s board of directors, according to Karalis, who says the agreement was presented to Aspiration’s executive team “as is,” without consulting them or giving them an opportunity to be involved in negotiations. If the executive team had been privy to the talks, it would have advised against the deal, Karalis explains, since management viewed it as a “poor use of cash resources.”

While Cherney signed the deal against the wishes of management, Aspiration’s marketing and management teams saw “no brand synergy” with Leonard and and opted against using his services, preferring to work with climate-focused influences, Karalis continues.

Regarding the $50MM that Clippers owner Steve Ballmer invested in Aspiration, Karalis says that investment was described as having been made with “light-to-no diligence” and came at a rate higher than the one Oak Tree Capital Management had paid during the company’s rounds of fundraising. As Karalis observes, it wouldn’t have been unusual for a well-known investor like Ballmer to be offered a discounted share price, since his involvement would create positive buzz for the company. Instead, the $11 he paid per share was a dollar higher than what Oak Tree paid.

Here’s more on the Leonard situation:

• Although the Clippers asserted in a statement on Wednesday night that there’s “nothing unusual or untoward about team sponsors doing endorsement deals with players at the same time,” rival executives who spoke to Sam Amick of The Athletic pointed out that Ballmer’s investment in Aspiration and the size of Leonard’s endorsement deal are red flags on their own, even before taking into account the fact that the star forward did no promotional work for the company. “This (sort of endorsement deal) does not happen,” one general manager told Amick.
• Executives who discussed the issue with Chris Mannix of SI.com conveyed a similar sentiment. “If this is what it looks like, I think (commissioner) Adam (Silver) has to make an example of them,” one team executive said.
• It’s worth noting that the Clippers were previously investigated in 2019 due to rumors that Leonard’s uncle Dennis Robertson was asking teams for improper benefits during Kawhi’s free agency negotiations that summer. John Gambadoro of Arizona Sports 98.7 (Twitter link) hears that Leonard was seeking an extra $15MM in endorsement money from the Raptors that offseason, while Bruce Arthur of The Toronto Star cites sources who say “Uncle Dennis” was asking for an ownership stake in the NHL’s Toronto Maple Leafs during talks with the Raptors.
• Nate Jones, who works as an agent and marketer at Goodwin Sports, shared some insights into the situation in a Twitter thread, explaining why the Clippers, Ballmer, and Leonard may all have plausible deniability if there’s no smoking gun laying out a quid pro quo arrangement. Still, as Kurt Helin of NBC Sports relays, citing Zach Lowe’s podcast, the NBA’s Collective Bargaining Agreement allows for cap circumvention to be proven by circumstantial evidence if the terms of a deal “cannot rationally be explained in” another way.