NBA Investigating Kawhi Leonard‘s Endorsement Deal with Financial Firm Amid Potential Conflicts of Interest
NEW YORK – โ The NBA is investigating an โendorsement deal between Kawhi Leonard andโค Aspiration, a financialโ firm with ties to Losโ Angeles Clippers owner Steve Ballmer, raising complex legal questions about potential conflictsโ of interest. โTheโฃ league’s inquiry โcenters on weather the agreement violates rules prohibiting teams or owners โfrom directly benefiting from player endorsements.
The deal, reportedly worth millions, came under scrutiny after Aspiration co-founder Joseph Sandberg was charged โคwith wireโ fraudโฃ in connection with a โข$248 million โscheme to defraud investors โandโค lenders, according to the Department of โขJustice. While theโ NBA lacks subpoena power and cannot compel testimony fromโข individuals outsideโฃ the league, it is leveraging its internal โขexpertise โ- including seasoned โattorneys โขlike Commissioner โAdam silver and executives Rick Buchanan, Danโข Rube, and Dan Spillane – to gather facts.โฃ league officials can request testimony andโ evidence, such as emails and โคtexts, from Ballmer and โClippers โpersonnel.The core issueโ revolves around the NBA’s regulations regarding endorsements. โขGenerally, the league permits player endorsements even from companies with ownership connections, provided there is sufficient separationโ between the โฃteam andโฃ the endorsing entity. โExamplesโค cited includeโ houston Rockets owner Tilman Fertitta’s ownership of Landry’s, wich has endorsement deals with โขplayers like โขjalen green, and Mark Cuban’s ownership โof Bregman’s Beer. Similarly, when Michael jordan owned the Charlotte Hornets, players โlike Kemba Walker and Cody Zeller heldโ endorsement deals with โNike’s Jordan Brand.
Though, โคthe involvement of Sandberg andโฃ the allegations of fraud complicate the situation. Even with Sandberg’s potential cooperation, his credibility is in question as he awaits sentencing.
The increasing presenceโ of private equity inโข professional sports adds another layer of complexity. โThe NBA, NHL, MLB, and MLS allowโ up to โค30% franchiseโ ownershipโข byโค private equity โขfirms, while the NFL permits up to 10%. This structureโ means teams โcan have numerous minority owners with investments in companies potentially seeking endorsement deals โwith players. Leagues are expected to exerciseโฃ reasonable judgment โwhen policing such arrangements, especially givenโข players’ โcollectively bargained rights to โpursue endorsements.
The NBA investigation is expected โto be thorough and deliberate, โgivenโ theโฃ multifaceted nature of theโ case. The league โขis proceeding cautiously, recognizing that โคa definitive conclusion will require โcareful examination of all available evidence.