It was clear that Kawhi Leonard had questionable endorsement deals with two different Los Angeles Clippers sponsors before the NBA announced a draconian punishment against the team.
The official report shows there were four different endorsement deals, and the Clippers’ conduct was far more egregious than previously imagined.
Clippers had a clear quid pro quo with Kawhi Leonard’s endorsements
It was clear since the NBA’s investigation began one year ago that Leonard’s deal with Clippers sponsor Aspiration was strange. The deal, for four years and $28M, was far above what Aspiration paid its other celebrity endorsers and didn’t require Leonard to do anything at all to earn his massive payday.
That may not have been the most blatant example of the Clippers’ cheating. According to the report from Wachtel, Lipton, Rosen & Katz, Clippers president of business operations Gillian Zucker initiated deals for Leonard with Boingo Wireless, Daktronics and Lipton Insurance in the summer of 2020, worth $18M in total. None of those deals was publicly announced.
What makes the deals even shadier is that each of those companies signed multi-million consulting agreements with the Clippers either just before or on the same day as they made their deals with Leonard. Two of those companies received $10M “consulting fees” up front — and none of the three companies normally charged for consulting services.
In other words, the companies paid Leonard and were immediately compensated for doing so by the Clippers. Or it was an enormous, improbable coincidence.
Clippers acceded to Kawhi Leonard’s agent’s demands
The report alleges that Dennis “Uncle Dennis” Robertson pressured the Clippers to provide illegal off-court benefits in early 2020, requests that were never reported to the NBA. Instead, Zucker made introductions to companies at a highly unusual time — June 2020, in the middle of the COVID-19 pandemic, with the NBA shut down.
None of the three companies had ever given a celebrity endorser anything comparable to what they paid Leonard, who had “minimal performance obligations” with each company. All he did was make a single visit to a military base and, on one other occasion, sign memorabilia. For that, he got $18M.
A Clippers executive specified that he wanted Daktronics to give Leonard a two-year endorsement deal for $6M in order to win the bid for the Intuit Dome’s scoreboard contract. Less than a year later, the Clippers informed Daktronics that they would be spending more on the scoreboard — and that Daktronics should pay Leonard $2M more for the second year as a result.
With Aspiration, the Clippers agreed to pay it $7M per year for a “sustainability services” contract with the Forum, purchased by Ballmer in 2020. That’s the same amount that Aspiration was paying Leonard in cash each year, along with $5M annually in equity.
The Clippers are still proclaiming their innocence, but at some point they’ll need to provide a reasonable explanation for the mountain of evidence the NBA uncovered about their financial dealings with Leonard and their sponsors.
Until then, it’s hard not to see the Clippers’ activities as calculated, widespread and brazen. If what’s in the NBA’s independent report isn’t salary-cap circumvention, it’s hard to imagine what is.
