Sources: NBA OK’d Clippers’ Aspiration sponsorship deal in 2021

The NBA vetted and approved a $300 million sponsorship deal between the LA Clippers and Aspiration in 2021, months before the green banking company signed a separate deal with star Kawhi Leonard that has triggered a salary cap-circumvention investigation by the league, multiple sources told ESPN.

Two sources with direct knowledge of the arrangement said the Clippers submitted the 23-year agreement to the NBA for approval before it was announced in September 2021, as required under league rules because it contained a jersey patch component, the sources said.

The agreement also included signage in the team’s yet-to-be-completed arena in Inglewood, the sources said. In April 2022, Aspiration reportedly signed a separate, $28 million sponsorship deal with Leonard that was not subject to NBA review, per the league’s collective bargaining agreement.

The NBA is investigating whether the Clippers and owner Steve Ballmer violated league rules by circumventing the salary cap to compensate Leonard. Following reports of the allegations, NBA commissioner Adam Silver initially said he had “never heard of the company Aspiration before,” then later revised his comments to say he was “aware of the brand.”

The NBA does not require teams to submit all sponsorship agreements for review. But some types of sponsorships, including jersey patches and signage that is viewable on television broadcasts, are subject to heightened rules or approval by the league. Sponsorships with companies tied to cannabis, gaming and energy drinks are also subject to league review.

“Teams vet their own sponsorship partners and negotiate their own sponsorship agreements,” NBA spokesperson Mike Bass said in a statement to ESPN. “Given the jersey patch’s inclusion on player jerseys and its level of exposure across game telecasts, the league reviews and approves jersey patch arrangements pursuant to league rules that are intended to avoid potential brand issues or conflicts with league partnerships.”

A Clippers spokesperson referred questions about the league’s process to the NBA.

A sponsorship deal for a team’s jersey patch requires explicit approval of the NBA, according to official league documents obtained by ESPN. The 2021-22 league operations manual specifies that a team “must notify, and obtain the approval of, the NBA” before entering into such an arrangement and that “a team cannot announce any Patch arrangement unless the applicable Patch Sponsorship Agreement, Jersey Patch and announcement have been approved in advance by the NBA.”

The manual devotes roughly four pages to policies regarding patch sponsorship arrangements. It states that teams must submit such terms to the NBA in advance of any announcement.

The manual even dictates a patch’s size and location on the uniform, stating, “The dimensions of the Jersey Patch may be adjusted slightly, as approved by the NBA.”

The manual also specifies provisions that must be included in a contract between a team and patch sponsor. One of those provisions states that the league or the team can terminate the deal if the sponsor “becomes involved in any controversy or scandal that has or may have a negative effect on the business, reputation or the public’s perception of [the team] or the NBA.”

In September 2021, the same month that the Clippers announced their deal with AspirationBallmer invested $50 million in the California-based company, according to podcaster and journalist Pablo Torre.

In April 2022, Aspiration reached a four-year, $28 million endorsement deal with Leonard, an agreement that an unnamed employee who purportedly worked for the banking company told Torre “was to circumvent the salary cap.”

In an interview with ESPNBallmer denied that he had knowledge of the endorsement contract that Aspiration eventually signed with Leonard or that he directed the company to do so. NBA rules do not prohibit teams from introducing team sponsors or companies to players, but teams aren’t allowed to be involved in subsequent negotiations. Per the collective bargaining agreement, the league does not review sponsorship deals with players.

The Aspiration logo was scheduled to be on the Clippers’ jerseys at the start of the 2023-24 season after the team’s deal with Honey expired, but it didn’t appear. In January 2024, Bloomberg News reported that Aspiration was the subject of a Department of Justice and Commodity Futures Trading Commission investigation into whether the company misled customers. At the time, the Clippers told Bloomberg that the team had terminated its sponsorship agreement with Aspiration “last season.”

Aspiration filed for bankruptcy this March with a reported debt of $170 million. The company said at the time that it owed the Clippers $30 million, the most of all its creditors.

In August, Aspiration co-founder Joe Sanberg pleaded guilty to two counts of wire fraud. Federal prosecutors said Sanberg defrauded investors and lenders out of $248 million by fraudulently obtaining loans, falsifying bank and brokerage statements, and concealing that he was the source of some revenue booked by the company.

Ballmer told ESPN that he had been reviewing his interaction with Aspiration as part of his and the team’s cooperation with the DOJ investigation into the company.

“These were guys who committed fraud,” he said. “Look, they conned me. They conned me. I made an investment in these guys thinking it was on the up-and-up, and they conned me at this stage.”

Multiple sources familiar with the league’s sponsorship-vetting process said the review centers on the credibility of the company and its ability to deliver on its financial commitments.

It’s unclear whether the league conducted any further reviews of the Clippers-Aspiration agreement after approving the initial deal.

The league has hired law firm Wachtell Lipton, Rosen & Katz to investigate whether the Clippers circumvented salary cap rules. People familiar with the process suggested the probe could take months, perhaps not concluding until after the 2026 NBA playoffs.

But those same people also noted that, per the terms of the NBA’s collective bargaining agreement, Silver is not solely responsible for deciding whether the Clippers will be punished, depending on the findings.

Rather, Wachtell Lipton will present its findings to the league office, and Silver will have to decide, based on those findings — or lack thereof — whether to bring any potential evidence to a neutral arbitrator appointed by the NBA and the National Basketball Players Association, the people said.

The arbitrator would then examine what Silver brought forth and decide the next step. The arbitrator could either grant Silver the authority to punish the Clippers or decide that there isn’t enough evidence to merit any discipline and deny him the ability to levy penalties against the team.

“The burden is on the league if we’re going to discipline a team, an owner, a player or any constituent members of the league,” Silver told reporters following the league’s board of governors meetings in Midtown Manhattan in mid-September. “I think as with any process that requires a fundamental sense of fairness, the burden should be on the party that is, in essence, bringing those charges.”