How a Fraudulent Startup Pulled the Clippers Into Chaos
Kawhi Leonard reportedly got paid $28 million for a no-show job. But were the Clippers intentionally circumventing the salary cap or did they get scammed?
Pablo Torre’s latest investigation could be the NBA’s biggest scandal in decades, potentially leading to the loss of draft picks, voided contracts, or a sale of the Clippers.
For those who missed it, Torre uncovered 3,000 pages of exclusive documents during his seven-month investigation. What he found is that Clippers star Kawhi Leonard signed a $28 million endorsement deal for a "no-show job" with a fraudulent tree-planting company, which was funded by $50 million from Clippers owner Steve Ballmer. In other words, Torre’s investigation raises allegations that Clippers owner Steve Ballmer may have circumvented the NBA’s salary cap to pay Leonard more than permitted — conduct the league has described in other cases as a “cardinal sin.”
The entire podcast is worth a listen. But I also think this story needs more context. So today, I will explain precisely what is going on. We’ll start by summarizing the key findings from Pablo’s investigation, but then I want to give you all some background on how this works around the NBA. Leonard isn’t the only NBA player signing endorsement deals with team sponsors. It’s sort of an unspoken part of the process.
There is also a much larger story surrounding the company itself — how it defrauded investors, whether Steve Ballmer would have been aware of the payments, what the NBA might do about it, and how this could impact other players around the league.
This is a fascinating story because it sheds light on an issue that everyone knows is happening but never discusses publicly. There is a paper trail of private emails, and millions of dollars changed hands behind the scenes. But more importantly, the details provide an inside look at how modern sports franchises operate financially.
This newsletter is a little bit longer than usual, but no space is wasted. Let’s go.