In March 2023, LA Clippers proprietor Steve Ballmer invested nearly $10 million into monetary know-how and sustainability companies firm Aspiration, in keeping with authorized filings reviewed by The Athletic and corroborated by a former Aspiration government.
The beforehand unreported funding got here 18 months after Ballmer’s $50 million funding within the agency now on the coronary heart of an NBA investigation into whether or not Clippers star Kawhi Leonard made a aspect deal to avoid the NBA’s wage cap, allegations first reported by the “Pablo Torre Finds Out” podcast final week.
Ballmer’s $10 million infusion into Aspiration got here because the Los Angeles-based firm was hemorrhaging money, shedding staff and struggling to lift funds — and it got here simply three months after a $1.99 million funding by Dennis Wong, Ballmer’s school roommate and Clippers vice chairman, which was first reported by “Pablo Torre Finds Out” this week.
In accordance with the podcast’s report, Wong’s funding was quickly adopted by a $1.75 million cost by Aspiration to Leonard, who signed a $28 million contract with the corporate in April 2022.
Ballmer’s 2023 funding was a part of a fundraising spherical made up nearly totally of earlier Aspiration buyers, with Wong being the lone exception. The corporate hoped to lift $75 million in contemporary cash however got here up almost $9 million quick. A overwhelming majority of the shares have been purchased up by Aspiration co-founder Joe Sanberg and Ibrahim AlHusseini, one other Aspiration board member. Sanberg later agreed to plead responsible to fraud prices introduced by the Justice Division.
Ballmer’s first funding into Aspiration — a $50 million infusion alongside $265 million from OakTree Capital, a outstanding monetary agency — got here in December 2021, three months after Aspiration signed a cope with the Clippers price greater than $300 million to be a founding sponsor of the staff’s new enviornment and its jersey patch associate. The Clippers additionally signed an settlement to pay Aspiration greater than $50 million for carbon offsetting towards the objective of changing into carbon impartial, in keeping with a number of sources briefed on the deal.
Seven months later, Aspiration inked Leonard to a four-year, $28 million endorsement contract. Nearly instantly, Aspiration struggled to make its quarterly $1.75 million funds to Leonard, and when the corporate was late with a cost that fall, Leonard’s agent, Mitch Frankel, reached out to firm executives.
In December 2022, Wong invested nearly $2 million in Aspiration by DEA 88 Investments LLP. Days later, in keeping with reporting by “Pablo Torre Finds Out,” Aspiration paid Leonard $1.75 million.
Three months later, in keeping with courtroom paperwork in a civil swimsuit, Ballmer invested $9,999,997.92 within the firm. Aspiration had been struggling financially, with simply $12.2 million in money as of Feb. 17, 2023 and working by greater than $2 million every week. The Clippers declined to touch upon the March 2023 funding.
It’s unclear if Aspiration continued paying Leonard, who’s listed as a creditor in Aspiration’s chapter filings for $7 million, as are two firms representing the Clippers for a mixed $50 million.
Lengthy earlier than the connection between Leonard and Aspiration fell underneath public scrutiny, it brought on confusion inside the firm itself, in keeping with ex-employees who spoke with The Athletic. After Sanberg launched the thought, members of Aspiration’s government staff believed Leonard’s deal, which was by no means introduced publicly, held little worth to the corporate. A former Aspiration C-Suite government stated that the deal “materialized primarily out of the ether.”
As a part of the deal, Leonard additionally acquired $20 million in fairness through Aspiration shares that got here immediately from Sanberg.
“I’m personally contributing inventory to Kawhi to make this partnership attainable,” Sanberg wrote members of his management staff in a Could 2022 e mail obtained by The Athletic. “Aspiration’s CEO judged the deal to be not price doing. For avoidance of doubt, any and all profit to Aspiration from the Kawhi deal is being backed by my contributing my fairness to make this occur.”
As a part of the settlement, Sanberg additionally pressured the corporate to pay for charges incurred by Frankel, who didn’t reply to The Athletic‘s request for remark.
Whereas Aspiration executives initially traded concepts on easy methods to incorporate Leonard in advertising and marketing campaigns — together with in collaboration with Drake, a star shopper and endorser — it by no means did so. One government believed the famously laconic Leonard didn’t match as a spokesperson.
The contract specified that Leonard would, amongst different asks, take part in a single eight-hour day of manufacturing, one four-hour day of public relations, two one-hour neighborhood service occasions, one five-minute phase per week “in dialog with (Clippers) Coach Ty Lue” whereas he sat out the 2021-22 season recovering from an damage, “5 natural feedback/likes/RTs as requested by Aspiration” and three off-court initiatives.
However the deal, which allowed Aspiration to terminate it for trigger or if Leonard was not taking part in for the Clippers, additionally gave Leonard sign-off on the requests and allowed him to refuse to do something “not constant along with his beliefs.”
Emails between Aspiration executives obtained by The Athletic mirrored confusion and frustration with the contract. One advertising and marketing government emailed that the deal had “fairly large flags” whereas bemoaning that it solely assured Aspiration one eight-hour manufacturing day, including that Leonard’s lack of social media presence would “considerably hamper” the corporate’s potential to extract worth from the deal.
When reached by The Athletic this week, Andrei Cherny, Aspiration’s co-founder and CEO till 2022, disputed that Leonard had a no-show contract. He stated the beliefs clause is customary for superstar endorsements and that the corporate may finish the settlement if Leonard didn’t carry out on his finish.
“Within the months of dialogue amongst our executives earlier than signing the sponsorship, I don’t keep in mind conversations in regards to the NBA wage cap,” Cherny stated. “I signed the contract shortly earlier than I submitted my resignation, however earlier than I left there have been quite a few inner conversations in regards to the numerous issues Aspiration was planning on doing with Leonard as soon as the 2022-23 season started, together with emails from the advertising and marketing staff about their plans in simply the week earlier than my final day. I can’t communicate to what was executed or not executed after I left — or why.”
The contract was, nevertheless, a lot richer than Aspiration’s offers with different endorsers, in keeping with the previous government who associated that Leonardo DiCaprio and Robert Downey Jr. each acquired lower than $2 million in fairness, whereas Drake invested $4 million but additionally acquired carbon offsets.
Leonard by no means publicly promoted the corporate.
In March 2025, Sanberg was arrested and Aspiration filed for chapter. Sanberg has agreed to plead responsible to federal prices of defrauding buyers for $248 million. His subsequent plea listening to is subsequent week. An legal professional for Sanberg declined to remark.
In August, the Securities and Alternate Fee alleged that Sanberg inflated the corporate’s income and duped buyers, utilizing Aspiration shares to take out greater than $100 million in private loans. The SEC’s criticism pointed particularly to 2 buyers, together with one who purchased $50 million in shares between September and December 2021.
Aspiration staff stated that Sanberg constructed and maintained a relationship with Ballmer to persuade him to put money into the corporate. Throughout a deposition final October, when the Aspiration co-founder was requested whether or not he was the one who landed Ballmer as an investor, Sanberg invoked his fifth modification rights.
“They conned me,” Ballmer informed ESPN final week. “I made an funding in these guys, pondering it was on the up and up, they usually con me. At this stage, I’ve no potential to foretell why they may have executed something they did, not to mention the precise contract with Kawhi.”
Final week, the NBA introduced it had employed regulation agency Wachtell, Lipton, Rosen & Katz, which has beforehand performed league investigations into the Clippers and Phoenix Suns, to find out if Ballmer and the Clippers used Aspiration to avoid wage cap restrictions. Ballmer has denied wrongdoing and stated that other than introducing Leonard to the corporate, he didn’t know something about Leonard’s endorsement contract.
If, after the investigation and a ruling by an unbiased arbitrator, NBA commissioner Adam Silver determines the Clippers broke league guidelines, he has the power underneath the collective bargaining settlement to punish the staff and Ballmer by docking draft picks, implementing fines and even voiding Leonard’s deal.
At a information convention Wednesday following an NBA board of governors assembly, Silver stated he’ll search for greater than the “look of impropriety” to penalize the staff, including that the burden of proof is on the league.
“I believe the objective of a full investigation is to search out out if there actually was impropriety,” Silver stated. “In a public-facing sport, the general public at occasions reaches conclusions that later develop into utterly false. I might need anybody else in conditions Mr. Ballmer is in now — and Kawhi, for that matter — to be handled the identical manner I might wish to be handled if individuals have been making allegations in opposition to me. We’re not a courtroom of regulation on the finish of the day, both.”
(Photograph of Steve Ballmer by Jayne Kamin-Oncea-USA TODAY Sports activities)
