Semi-OT: Pablo Torre Investigation into Kawhie/Clippers

[jnrjr79]

The larger question is how commonplace is this type of practice? Is it isolated to Kawhi or do other franchises also do this for star players? It's a huge scandal regardless.

I think the amount of money and Ballmers very public connection to the company are what stand out here.

I imagine teams do work with sponsors to get players involved - Bulls with Zenith eyewear and ads featuring Coby and Ayo come to mind.

But Ballmer being on record giving the company $50m and then the company giving Kawhie $28m and paying for sponsorship in the stadium all seem like Ballmer giving the company money to benefit the Clippers, and in the case of Kawhi, circumvent cap rules.

The $28m for Kawhi is also outrageous. It's reported that it's more than all other spokespeople/celebrity endorsements deals combined - including Drake, Rober Downey Jr, Leo Dicaprio, Cindy Crawford, and others.

And those endorsements actually did things for the company - even if something as simple as doing the voiceover for an ad.

Right - to me, there are some crucial differences here. Ballmer wasn't getting Kawhi an endorsement deal. Ballmer was just paying Kawhi to do nothing. I assume teams help players secure endorsements all the time, but they are in fact actual endorsement deals and the team owners aren't funding them.

And it probably doesn't help that Aspiration itself was apparently committing so much fraud that it went bankrupt and the founder was arrested. Not great optics for the league.

[Ice Man]

I am VERY surprised that we have not already encountered cases like this. Under-the-table promises are the obvious workaround for teams facing salary caps, and there are a lot of subtle ways to do that. My guess is not that the Kawhi situation is unique, but quite the opposite -- that such deals are relatively common practice, but for whatever reason this one has surfaced.

[Dan Z]

I said this in the general board. If this is true then why pay him an additional 28 million in a shady deal? Was Kawhi really going to say no to the deal they already offered him? Where else was he going to go?

To my understanding, this was back in 2019, so the Lakers were in play and Toronto was also trying to keep him.

A Toronto fan on the general board replied (with links) saying that Presti and Masai talked about a trade involving Westbrook and George but Masai didn't want to include Siakam.

If that's true, then they didn't offer Kawhi as much as LA did (even if you take out the shady 28 million deal).

As for the Lakers I don't remember what their team was like at that time. Had they already traded for AD? What was their cap space like?

I still don't think he had many options and LA was already giving him a lot by making that trade for George (plus offering him a 3 year 103 million dollar deal).

[jnrjr79]

I said this in the general board. If this is true then why pay him an additional 28 million in a shady deal? Was Kawhi really going to say no to the deal they already offered him? Where else was he going to go?

To my understanding, this was back in 2019, so the Lakers were in play and Toronto was also trying to keep him.

A Toronto fan on the general board replied (with links) saying that Presti and Masai talked about a trade involving Westbrook and George but Masai didn't want to include Siakam.

If that's true, then they didn't offer Kawhi as much as LA did (even if you take out the shady 28 million deal).

As for the Lakers I don't remember what their team was like at that time. Had they already traded for AD? What was their cap space like?

I still don't think he had many options and LA was already giving him a lot by making that trade for George (plus offering him a 3 year 103 million dollar deal).

Re: the Lakers, they were considered the favorites to sign him. There was a report in The Athletic back at the time that Leonard’s uncle asked for *more* than a max contract, including a private plane for Kawhi and guarantees that he would earn a certain amount of off-court money. Jeanie Buss rebuffed those demands because they violated the CBA, which caused Kawhi to switch to the Clippers (who apparently, we’re now learning, were willing to break the rules).

LeBron and Davis were there, so this was an attempt to build a superteam.

You may run into a paywall, but there are a lot of details here if you can access it:

https://www.nytimes.com/athletic/1481876/2019/12/23/improper-requests-an-investigation-and-a-superstar-chase-gone-sideways-the-untold-stories-from-kawhi-leonards-free-agency-that-left-the-lakers-fuming/&ved=2ahUKEwixuv6Xwb2PAxW8K1kFHQTXFBsQFnoECCkQAQ&usg=AOvVaw2Dnl127owoqzE5ccX9A_VE

[kodo]

The larger question is how commonplace is this type of practice? Is it isolated to Kawhi or do other franchises also do this for star players? It's a huge scandal regardless.

I think the amount of money and Ballmers very public connection to the company are what stand out here.

I imagine teams do work with sponsors to get players involved - Bulls with Zenith eyewear and ads featuring Coby and Ayo come to mind.

But Ballmer being on record giving the company $50m and then the company giving Kawhie $28m and paying for sponsorship in the stadium all seem like Ballmer giving the company money to benefit the Clippers, and in the case of Kawhi, circumvent cap rules.

The $28m for Kawhi is also outrageous. It's reported that it's more than all other spokespeople/celebrity endorsements deals combined - including Drake, Rober Downey Jr, Leo Dicaprio, Cindy Crawford, and others.

And those endorsements actually did things for the company - even if something as simple as doing the voiceover for an ad.

Right - to me, there are some crucial differences here. Ballmer wasn't getting Kawhi an endorsement deal. Ballmer was just paying Kawhi to do nothing. I assume teams help players secure endorsements all the time, but they are in fact actual endorsement deals and the team owners aren't funding them.

And it probably doesn't help that Aspiration itself was apparently committing so much fraud that it went bankrupt and the founder was arrested. Not great optics for the league.

It's very common, but the player has to do something, anything. Westbrook's wealth comes from ownership stake in car dealerships...and I'm going to guess Russell doesn't know much about opening & running car dealerships. But his name is on the dealership. He just sold just one of his dealerships for $15M.

This a Sam Hinkie situation. Yes it happens, but when you are this brazen and out in the open and just spitting in Silver's face about it, he's going to have to take action.

[jnrjr79]

I think the amount of money and Ballmers very public connection to the company are what stand out here.

I imagine teams do work with sponsors to get players involved - Bulls with Zenith eyewear and ads featuring Coby and Ayo come to mind.

But Ballmer being on record giving the company $50m and then the company giving Kawhie $28m and paying for sponsorship in the stadium all seem like Ballmer giving the company money to benefit the Clippers, and in the case of Kawhi, circumvent cap rules.

The $28m for Kawhi is also outrageous. It's reported that it's more than all other spokespeople/celebrity endorsements deals combined - including Drake, Rober Downey Jr, Leo Dicaprio, Cindy Crawford, and others.

And those endorsements actually did things for the company - even if something as simple as doing the voiceover for an ad.

Right - to me, there are some crucial differences here. Ballmer wasn't getting Kawhi an endorsement deal. Ballmer was just paying Kawhi to do nothing. I assume teams help players secure endorsements all the time, but they are in fact actual endorsement deals and the team owners aren't funding them.

And it probably doesn't help that Aspiration itself was apparently committing so much fraud that it went bankrupt and the founder was arrested. Not great optics for the league.

It's very common, but the player has to do something, anything. Westbrook's wealth comes from ownership stake in car dealerships...and I'm going to guess Russell doesn't know much about opening & running car dealerships. But his name is on the dealership. He just sold just one of his dealerships for $15M.

This a Sam Hinkie situation. Yes it happens, but when you are this brazen and out in the open and just spitting in Silver's face about it, he's going to have to take action.

If the bolded is true, then no, it is not common, because the car dealership example does not in any way violate the CBA.

NBA player opens legitimate business on the side =/= NBA team owner pays player to pretend to be a product’s sponsor.

I’m sure teams assist all the time in connecting players with investment experts and by encouraging sponsors to sign their players to deals. Neither of those things is analogous to what happened here, if true.

[dougthonus]

I'd cancel Kawhi's contract, ban him for life, and fine the Clippers 500M dollars, and if Balmer balks at the fine, force him to sell the team.

The violation here is probably the most outrageous cap violation in the history of US sports that I'm aware of.

[jnrjr79]

The NBA has announced it is opening an investigation.

[Michael Jackson eating popcorn GIF]

[kodo]

Listened to the podcast. The guy got suspicious because the dummy company that routed the money was called "KL2 Holdings" are something, and Pablo thought "KL2? Isn't that Kawhi?"

Mastermind criminal geniuses aren't at work here.

[Dan Z]

To my understanding, this was back in 2019, so the Lakers were in play and Toronto was also trying to keep him.

A Toronto fan on the general board replied (with links) saying that Presti and Masai talked about a trade involving Westbrook and George but Masai didn't want to include Siakam.

If that's true, then they didn't offer Kawhi as much as LA did (even if you take out the shady 28 million deal).

As for the Lakers I don't remember what their team was like at that time. Had they already traded for AD? What was their cap space like?

I still don't think he had many options and LA was already giving him a lot by making that trade for George (plus offering him a 3 year 103 million dollar deal).

Re: the Lakers, they were considered the favorites to sign him. There was a report in The Athletic back at the time that Leonard’s uncle asked for *more* than a max contract, including a private plane for Kawhi and guarantees that he would earn a certain amount of off-court money. Jeanie Buss rebuffed those demands because they violated the CBA, which caused Kawhi to switch to the Clippers (who apparently, we’re now learning, were willing to break the rules).

LeBron and Davis were there, so this was an attempt to build a superteam.

You may run into a paywall, but there are a lot of details here if you can access it:

https://www.nytimes.com/athletic/1481876/2019/12/23/improper-requests-an-investigation-and-a-superstar-chase-gone-sideways-the-untold-stories-from-kawhi-leonards-free-agency-that-left-the-lakers-fuming/&ved=2ahUKEwixuv6Xwb2PAxW8K1kFHQTXFBsQFnoECCkQAQ&usg=AOvVaw2Dnl127owoqzE5ccX9A_VE

Interesting. If I was Ballmer and Kawhi had all these demands I'd just say no and be willing to walk away. He's just not worth it.

But I'm saying that as someone who never thought he was worth it because I never thought he'd be healthy enough to rely upon (which proved to be true).

LeBron, AD and Kawhi would've been interesting, but again Kawhi would need to be healthy for a playoff run.

It seems to me that this is a case of a billionaire who thinks he can do anything and an athlete who sees no problem with breaking the rules.

[sco]

Punish Kawhi by making him play out the rest of his career for the Bulls and Reinsdorf.

[drosestruts]

I'd cancel Kawhi's contract, ban him for life, and fine the Clippers 500M dollars, and if Balmer balks at the fine, force him to sell the team.

The violation here is probably the most outrageous cap violation in the history of US sports that I'm aware of.

NBA penalties for cap circumvention in the current CBA:

Fine of up to $4.5 million for a first offense.
Fine of up to $5.5 million for a second offense.
Loss of one first-round pick.
The possibility of voiding contracts that are involved in the circumvention.


I feel given the language in the CBA we won't see anything even comparable to the Joe Smith penalty - loss of 5 (later 3) first round picks, a fine, and voiding Smith's contract

The penalties listed above are actually quite soft

[boozapalooza]

My question: why not just pay Kawhi in Bitcoin? I’m guessing teams have already done this. Idk how you would track that.

Also, Pablo said he has Brunson/Knicks in his crosshairs up next…

[dougthonus]

I'd cancel Kawhi's contract, ban him for life, and fine the Clippers 500M dollars, and if Balmer balks at the fine, force him to sell the team.

The violation here is probably the most outrageous cap violation in the history of US sports that I'm aware of.

NBA penalties for cap circumvention in the current CBA:

Fine of up to $4.5 million for a first offense.
Fine of up to $5.5 million for a second offense.
Loss of one first-round pick.
The possibility of voiding contracts that are involved in the circumvention.


I feel given the language in the CBA we won't see anything even comparable to the Joe Smith penalty - loss of 5 (later 3) first round picks, a fine, and voiding Smith's contract

The penalties listed above are actually quite soft

It is outrageous that they defined a penalty in the CBA and made it so trivial. I wonder how big the "under the table" market is on players.

[chefo]

Forget about what the NBA does.

They used a non-profit as the pass-through to do that, a non-profit whose executives just pleaded guilty to wire fraud, etc. Given that the founders were high-level Democrat movers and shakers, I just don't see the Trump DOJ going easy on anybody involved, and I soon expect that these guys will be hearing from the IRS as well, because there's likely tax fraud as well.

If that happens, the Board of the non-profit is liable as well, and some ambitious prosecutor may be able to get all the way up to Ballmer. It sounds like they were sloppy and left quite the paper trail. Point being, Ballmer may have to go beg Trump to make this go away eventually and that will definitely come with strings attached.

[ImSlower]

Silver definitely is not having a good day. This story seems to be picking up steam all over NBA social media, or perhaps just the corners I see?

A completely blatant and egregious flaunting of the CBA. I think we all agree that deals involve some under-the-table stuff that goes on in tis league among many others (and other industries etc). But damn, $28 million on a total sham agreement? I remember rumors of him taking/courting extra deals back in that Which-LA-team-or-Toronto drama, and now here it is front and center.

I assume the final punishment(s) will be a slap on the wrist compared to Doug's recommendation, though that would be a hell of a draconian way to put the hammer down on this BS. Silver still has to come down hard; $5 million is a joke for Ballmer. I wonder if Leonard will face suspension as well as a contract void? Opening him to free agency out of nowhere will have a crazy impact on this off-season.

What a bonkers story.

[jnrjr79]

Forget about what the NBA does.

They used a non-profit as the pass-through to do that, a non-profit whose executives just pleaded guilty to wire fraud, etc. Given that the founders were high-level Democrat movers and shakers, I just don't see the Trump DOJ going easy on anybody involved, and I soon expect that these guys will be hearing from the IRS as well, because there's likely tax fraud as well.

If that happens, the Board of the non-profit is liable as well, and some ambitious prosecutor may be able to get all the way up to Ballmer. It sounds like they were sloppy and left quite the paper trail. Point being, Ballmer may have to go beg Trump to make this go away eventually and that will definitely come with strings attached.

Not that it makes a huge difference, but it does not appear that Aspire was a not-for-profit organization. Their website does not describe themselves as such (as opposed to other tree-planting companies) and their parent was planning an IPO.

Ballmer was an investor in Aspire, but I see no evidence he was on the board. Ballmer’s efforts to get around the CBA do not, to me, seem to have any immediately obvious criminal law implications.

[chefo]

Forget about what the NBA does.

They used a non-profit as the pass-through to do that, a non-profit whose executives just pleaded guilty to wire fraud, etc. Given that the founders were high-level Democrat movers and shakers, I just don't see the Trump DOJ going easy on anybody involved, and I soon expect that these guys will be hearing from the IRS as well, because there's likely tax fraud as well.

If that happens, the Board of the non-profit is liable as well, and some ambitious prosecutor may be able to get all the way up to Ballmer. It sounds like they were sloppy and left quite the paper trail. Point being, Ballmer may have to go beg Trump to make this go away eventually and that will definitely come with strings attached.

Not that it makes a huge difference, but it does not appear that Aspire was a not-for-profit organization. Their website does not describe themselves as such (as opposed to other tree-planting companies) and their parent was planning an IPO.

Ballmer was an investor in Aspire, but I see no evidence he was on the board. Ballmer’s efforts to get around the CBA do not, to me, seem to have any immediately obvious criminal law implications.

Hmm, interesting. I must have misunderstood. Non-profits are a huge problem from a tax perspective, if you lose the status, and that's without explicitly breaking laws.

So, they were a for-profit, tree-planting company that hired A-listers to convince people to use them to plant trees to atone for their guilty conscience of driving a V8 and flying private, while subverting NBA salary-cap rules on behalf of the 6th (or whatever) richest guy in the world? And somehow, they did not manage to impress upon Ballmer that if they go into bankruptcy, and the books become public, their CEO will be headed for jail and it will greatly impair Ballmer's multi-billion Clippers franchise? Life is stranger than fiction.

[jnrjr79]

Forget about what the NBA does.

They used a non-profit as the pass-through to do that, a non-profit whose executives just pleaded guilty to wire fraud, etc. Given that the founders were high-level Democrat movers and shakers, I just don't see the Trump DOJ going easy on anybody involved, and I soon expect that these guys will be hearing from the IRS as well, because there's likely tax fraud as well.

If that happens, the Board of the non-profit is liable as well, and some ambitious prosecutor may be able to get all the way up to Ballmer. It sounds like they were sloppy and left quite the paper trail. Point being, Ballmer may have to go beg Trump to make this go away eventually and that will definitely come with strings attached.

Not that it makes a huge difference, but it does not appear that Aspire was a not-for-profit organization. Their website does not describe themselves as such (as opposed to other tree-planting companies) and their parent was planning an IPO.

Ballmer was an investor in Aspire, but I see no evidence he was on the board. Ballmer’s efforts to get around the CBA do not, to me, seem to have any immediately obvious criminal law implications.

Hmm, interesting. I must have misunderstood. Non-profits are a huge problem from a tax perspective, if you lose the status, and that's without explicitly breaking laws.

So, they were a for-profit, tree-planting company that hired A-listers to convince people to use them to plant trees to atone for their guilty conscience of driving a V8 and flying private, while subverting NBA salary-cap rules on behalf of the 6th (or whatever) richest guy in the world? And somehow, they did not manage to impress upon Ballmer that if they go into bankruptcy, and the books become public, their CEO will be headed for jail and it will greatly impair Ballmer's multi-billion Clippers franchise? Life is stranger than fiction.

I was reading up on this a bit today, but still don’t totally understand what th nature of the fraud was the company engaged in. It appears there was an investigation into the fact that the company had planted far fewer trees than it had claimed. I assume there was other chicanery from the founders.

But yeah, it’s pretty funny that Kawhi used an identifiable LLC to do the deal and that that LLC gets scheduled among the company’s creditors when it went BK.

The thing that eludes me is why not have Kawhi just cut some stupid ad for the company so it looks like a legitimate sponsorship? Is it because it would draw more attention to Ballmer’s investment, or is it simple laziness/carelessness?

[SalmonsSuperfan]

Kawhi Leonard and

Steve Balmer are both scammers

This is fraudulent.

haiku2