Semi-OT: Pablo Torre Investigation into Kawhie/Clippers

[Evil_Headband]

Cuban can shoot holes in Torre’s correlation/causation argument all he wants - it still doesn’t explain why the company was paying Kawhi to do nothing.

Aspiration got nothing from that arrangement, they didn’t even make the partnership public.

You just have to go: who benefited from paying Kawhi? And I have yet to hear a compelling argument that doesn’t indict the clippers

I'm not convinced it was intended to be a no show contract. The CEO who signed the deal, Andrei Cherny, said it wasn't. It's possible that they expected Kawhi to do things but, for whatever reason, it didn't turn out that way.

Read on Twitter

This dude is a huge liar and three of his execs contested this exact statement. If they expected Kawhi to do things, why not announce the deal?

I have two questions for you:

1. I'll post the "execs" letter below. What part of Cherny's statement is being contested? I think they both can be true.

2. What brings you to the conclusion that Cherny is a "huge liar"?

Read on Twitter

[dougthonus]

1. I'll post the "execs" letter below. What part of Cherny's statement is being contested? I think they both can be true.

2. What brings you to the conclusion that Cherny is a "huge liar"?

The three executives seem to be saying:
- This deal was not vetted by anyone except Cherny
- After it was signed without any vetting process, marketing tried to find something for Kawhi to do
- No one thought this made any sense at the time, and when Cherny was gone, they abandoned it

Maybe both statements can both be true, but the subjective outcome would still seem to be this was not a legitimate contract. Cherny saying the executives didn't discuss the salary cap, why would they? That would make no sense for Aspiration to discuss the salary cap.

[Evil_Headband]

1. I'll post the "execs" letter below. What part of Cherny's statement is being contested? I think they both can be true.

2. What brings you to the conclusion that Cherny is a "huge liar"?

The three executives seem to be saying:
- This deal was not vetted by anyone except Cherny
- After it was signed without any vetting process, marketing tried to find something for Kawhi to do
- No one thought this made any sense at the time, and when Cherny was gone, they abandoned it

Maybe both statements can both be true, but the subjective outcome would still seem to be this was not a legitimate contract. Cherny saying the executives didn't discuss the salary cap, why would they? That would make no sense for Aspiration to discuss the salary cap.

There was an email obtained by The Athletic about this and written about in the September 12 article by Mike Vorkunov. I won't paste it since it's behind a paywall. The email was from co-founder Joe Sanberg to the leadership team. In it, Sanberg mentions that Cherny (the CEO) "judged the deal to be not worth doing". He also mentioned in the email that the $20 million of stock to be given to Kawhi would be his (Sanberg's). I think it's clear that this deal was Sanberg's even if Cherny ended up signing off.

I agree that requirements for Leonard to do things may have been abandoned due to the lack of organizational buy-in. But I see a big difference here. Was it a deal designed to be a no show deal from the start or was it a deal that was designed for Kawhi to do things but not enforced? If it's the latter, I think it hurts Pablo's circumstantial case. To be sure, there are other things we could discuss about the deal not least of which is the high dollar amount. However, we first have to believe it possible that this may not have been intended to be a no-show contract.

[dougthonus]

There was an email obtained by The Athletic about this and written about in the September 12 article by Mike Vorkunov. I won't paste it since it's behind a paywall. The email was from co-founder Joe Sanberg to the leadership team. In it, Sanberg mentions that Cherny (the CEO) "judged the deal to be not worth doing". He also mentioned in the email that the $20 million of stock to be given to Kawhi would be his (Sanberg's). I think it's clear that this deal was Sanberg's even if Cherny ended up signing off.

While the person making the deal has changed, this makes the deal itself sound even more shady. A desperate founder gave up his own personal stock to Kawhi in a deal that made no sense and was vetted by no one, in order for Balmer to inject a ton of cash.

I agree that requirements for Leonard to do things may have been abandoned due to the lack of organizational buy-in. But I see a big difference here. Was it a deal designed to be a no show deal from the start or was it a deal that was designed for Kawhi to do things but not enforced? If it's the latter, I think it hurts Pablo's circumstantial case. To be sure, there are other things we could discuss about the deal not least of which is the high dollar amount. However, we first have to believe it possible that this may not have been intended to be a no-show contract.

Not sure I follow you:
- The deal was made with no prior vetting by anyone in the company, violating their own internal policies and controls
- The deal was made with no plan on how to use Kawhi or take advantage of it with the marketing department
- The deal was made for 10% of the cash raise they just had on a company that was on the verge of bankruptcy (ie doesn't fiscally make sense)
- The cost of the deal came out of an owner's pocket directly and didn't see related to the business ops of the firm
- There is no substantiative evidence they ever planned to use Kawhi and did not actually ever use Kawhi
- Kawhi on the surface would seem like a terrible fit for this type of marketing deal, he has no tie in to the company, industry, and isn't a noteworthy endorser of products, or known as a speaker

This sounds exactly like money laundering whether Cherny is being honest or not honest. Maybe its all on Sanberg and Cherny did leave because he knew this stuff was shady and he's not a bad guy, but that doesn't make anything about this deal seem legitimate.

[Ccwatercraft]

I'm not sure if any of you are following Mark Cuban on Twitter regarding all this. He is making a compelling case for Ballmer and Wong being scammed including lies and falsified data that would have been provided to them. Cuban is a must read to fully follow this story.

Of course, this doesn't answer the question of why Sanberg would have agreed to this Kawhi marketing contract. We have heard nothing from the Kawhi camp. Sanberg won't talk about this but my understanding is the NBA law firm can talk to Kawhi's agent. I'm not sure how much they will learn from him.

Most likely situation is Ballmer and the Clippers are cleared of wrongdoing. Time will tell though. Maybe there is a smoking gun out there.

I kinda think Cuban is a douche, so following a douche/douche story feels weird

My general opinion is that other owners might not want to dig too deep because at least a handful do similar stuff now.

My fear is that if they aren't severly punished along with Kawai being suspended for an extensive period of time, this gives the green light for other teams to pull the same stunts.

At that point why even have a salary cap.

[LateNight]

1. I'll post the "execs" letter below. What part of Cherny's statement is being contested? I think they both can be true.

2. What brings you to the conclusion that Cherny is a "huge liar"?

The three executives seem to be saying:
- This deal was not vetted by anyone except Cherny
- After it was signed without any vetting process, marketing tried to find something for Kawhi to do
- No one thought this made any sense at the time, and when Cherny was gone, they abandoned it

Maybe both statements can both be true, but the subjective outcome would still seem to be this was not a legitimate contract. Cherny saying the executives didn't discuss the salary cap, why would they? That would make no sense for Aspiration to discuss the salary cap.

There was an email obtained by The Athletic about this and written about in the September 12 article by Mike Vorkunov. I won't paste it since it's behind a paywall. The email was from co-founder Joe Sanberg to the leadership team. In it, Sanberg mentions that Cherny (the CEO) "judged the deal to be not worth doing". He also mentioned in the email that the $20 million of stock to be given to Kawhi would be his (Sanberg's). I think it's clear that this deal was Sanberg's even if Cherny ended up signing off.

I agree that requirements for Leonard to do things may have been abandoned due to the lack of organizational buy-in. But I see a big difference here. Was it a deal designed to be a no show deal from the start or was it a deal that was designed for Kawhi to do things but not enforced? If it's the latter, I think it hurts Pablo's circumstantial case. To be sure, there are other things we could discuss about the deal not least of which is the high dollar amount. However, we first have to believe it possible that this may not have been intended to be a no-show contract.

Just to put this all in context: George Clooney reportedly made $40m to be the face of Nespresso. That’s a big endorsement deal contract and it involves him doing like every ad for them and appearing in all their promotions.

I think we are in a weird place because NBA salaries are out of control - but this Kawhi payment is insane. To sign someone to this deal with no real idea how to use them is just not at all believable. It would be one of the worst examples of corporate malfeasance ever

[dougthonus]

My general opinion is that other owners might not want to dig too deep because at least a handful do similar stuff now.

My fear is that if they aren't severly punished along with Kawai being suspended for an extensive period of time, this gives the green light for other teams to pull the same stunts.

I'm not sure how much this is happening, because if it was happening all over the board, the league should be littered with contracts that don't make sense, but you don't really see that.

It's not that I think people are above doing shady things, I for sure think they would, just that you should see teams that are in tax trouble signing players way better than should go there for vet min salaries to avoid 5x luxury tax payments and have that money filtered via a 3rd party or bitcoin payment or something else with some narrative about how player X paid way under market value just wants to win.

[jnrjr79]

1. I'll post the "execs" letter below. What part of Cherny's statement is being contested? I think they both can be true.

2. What brings you to the conclusion that Cherny is a "huge liar"?

The three executives seem to be saying:
- This deal was not vetted by anyone except Cherny
- After it was signed without any vetting process, marketing tried to find something for Kawhi to do
- No one thought this made any sense at the time, and when Cherny was gone, they abandoned it

Maybe both statements can both be true, but the subjective outcome would still seem to be this was not a legitimate contract. Cherny saying the executives didn't discuss the salary cap, why would they? That would make no sense for Aspiration to discuss the salary cap.

There was an email obtained by The Athletic about this and written about in the September 12 article by Mike Vorkunov. I won't paste it since it's behind a paywall. The email was from co-founder Joe Sanberg to the leadership team. In it, Sanberg mentions that Cherny (the CEO) "judged the deal to be not worth doing". He also mentioned in the email that the $20 million of stock to be given to Kawhi would be his (Sanberg's). I think it's clear that this deal was Sanberg's even if Cherny ended up signing off.

I agree that requirements for Leonard to do things may have been abandoned due to the lack of organizational buy-in. But I see a big difference here. Was it a deal designed to be a no show deal from the start or was it a deal that was designed for Kawhi to do things but not enforced? If it's the latter, I think it hurts Pablo's circumstantial case. To be sure, there are other things we could discuss about the deal not least of which is the high dollar amount. However, we first have to believe it possible that this may not have been intended to be a no-show contract.

A lot of people have been saying things generally in line with the bolded above, but IMO it's not true. The test here isn't whether it was a no-show deal or not. It's whether the deal was fair market value for the services rendered. $28 million is wildly higher than FMV, even if Kawhi had ended up cutting a few ads for the company or whatever.

By contrast, Robert Downey Jr. (who is way more famous than Kawhi) received less than $2 million and actually promoted the company.

[Evil_Headband]

There was an email obtained by The Athletic about this and written about in the September 12 article by Mike Vorkunov. I won't paste it since it's behind a paywall. The email was from co-founder Joe Sanberg to the leadership team. In it, Sanberg mentions that Cherny (the CEO) "judged the deal to be not worth doing". He also mentioned in the email that the $20 million of stock to be given to Kawhi would be his (Sanberg's). I think it's clear that this deal was Sanberg's even if Cherny ended up signing off.

While the person making the deal has changed, this makes the deal itself sound even more shady. A desperate founder gave up his own personal stock to Kawhi in a deal that made no sense and was vetted by no one, in order for Balmer to inject a ton of cash.

I agree that requirements for Leonard to do things may have been abandoned due to the lack of organizational buy-in. But I see a big difference here. Was it a deal designed to be a no show deal from the start or was it a deal that was designed for Kawhi to do things but not enforced? If it's the latter, I think it hurts Pablo's circumstantial case. To be sure, there are other things we could discuss about the deal not least of which is the high dollar amount. However, we first have to believe it possible that this may not have been intended to be a no-show contract.

Not sure I follow you:
- The deal was made with no prior vetting by anyone in the company, violating their own internal policies and controls
- The deal was made with no plan on how to use Kawhi or take advantage of it with the marketing department
- The deal was made for 10% of the cash raise they just had on a company that was on the verge of bankruptcy (ie doesn't fiscally make sense)
- The cost of the deal came out of an owner's pocket directly and didn't see related to the business ops of the firm
- There is no substantiative evidence they ever planned to use Kawhi and did not actually ever use Kawhi
- Kawhi on the surface would seem like a terrible fit for this type of marketing deal, he has no tie in to the company, industry, and isn't a noteworthy endorser of products, or known as a speaker

This sounds exactly like money laundering whether Cherny is being honest or not honest. Maybe its all on Sanberg and Cherny did leave because he knew this stuff was shady and he's not a bad guy, but that doesn't make anything about this deal seem legitimate.

There is an important thing to keep in mind about how Aspiration was being run. It has become clear that Sanberg, in practice, had tremendous control of the organization including over the board of directors. Sanberg was also someone who hid the truth, provided fake documents, lied to investors, etc. I don't think failure to follow internal policies and controls meant much to him. He was going to do what he felt like he needed to do.

Instead of cap circumvention, I think it is feasible that Sanberg felt desperate and simply negotiated a bad deal. Keep in mind he also offered the Clippers twice what Intuit did for naming rights on the new stadium. If he thought the relationship with Ballmer and the Clippers was critical, I can see how getting a deal with their superstar player would also seem critical in his eyes.

Now, we know what happened when he brought back this deal to the management team. They hated it, including Cherny. Did Sanberg decide to use his own equity to get Cherny (and maybe others) to go forward? I think this is possible.

If we believe Cherny, we also know there were discussions to use Kawhi in marketing. We don't know for sure why nothing happened. I personally think it could have been some combination of the management team not being on board, shifting priorities, and, perhaps, even Kawhi being difficult to work with. But we don't know. I just see it as a possibility other than it being a planned no show contract from the beginning.

[Evil_Headband]

The three executives seem to be saying:
- This deal was not vetted by anyone except Cherny
- After it was signed without any vetting process, marketing tried to find something for Kawhi to do
- No one thought this made any sense at the time, and when Cherny was gone, they abandoned it

Maybe both statements can both be true, but the subjective outcome would still seem to be this was not a legitimate contract. Cherny saying the executives didn't discuss the salary cap, why would they? That would make no sense for Aspiration to discuss the salary cap.

There was an email obtained by The Athletic about this and written about in the September 12 article by Mike Vorkunov. I won't paste it since it's behind a paywall. The email was from co-founder Joe Sanberg to the leadership team. In it, Sanberg mentions that Cherny (the CEO) "judged the deal to be not worth doing". He also mentioned in the email that the $20 million of stock to be given to Kawhi would be his (Sanberg's). I think it's clear that this deal was Sanberg's even if Cherny ended up signing off.

I agree that requirements for Leonard to do things may have been abandoned due to the lack of organizational buy-in. But I see a big difference here. Was it a deal designed to be a no show deal from the start or was it a deal that was designed for Kawhi to do things but not enforced? If it's the latter, I think it hurts Pablo's circumstantial case. To be sure, there are other things we could discuss about the deal not least of which is the high dollar amount. However, we first have to believe it possible that this may not have been intended to be a no-show contract.

A lot of people have been saying things generally in line with the bolded above, but IMO it's not true. The test here isn't whether it was a no-show deal or not. It's whether the deal was fair market value for the services rendered. $28 million is wildly higher than FMV, even if Kawhi had ended up cutting a few ads for the company or whatever.

By contrast, Robert Downey Jr. (who is way more famous than Kawhi) received less than $2 million and actually promoted the company.

Mark Cuban mentioned that around the time of the deal, in the crypto space, Tom Brady got a contract of $55 million over three years requiring 20 hours of his time per year. Steph Curry got a similar deal for $35 million.

Now, obviously, Kawhi Leonard doesn't have the marketability that those two have. However, I suspect these were the benchmarks. Not Downey's deal.

To be clear, this was a terrible, stupid deal for many reasons. However, organizational leaders make terrible, stupid deals sometimes. We should know, we're Bulls fans!

[jnrjr79]

There was an email obtained by The Athletic about this and written about in the September 12 article by Mike Vorkunov. I won't paste it since it's behind a paywall. The email was from co-founder Joe Sanberg to the leadership team. In it, Sanberg mentions that Cherny (the CEO) "judged the deal to be not worth doing". He also mentioned in the email that the $20 million of stock to be given to Kawhi would be his (Sanberg's). I think it's clear that this deal was Sanberg's even if Cherny ended up signing off.

While the person making the deal has changed, this makes the deal itself sound even more shady. A desperate founder gave up his own personal stock to Kawhi in a deal that made no sense and was vetted by no one, in order for Balmer to inject a ton of cash.

I agree that requirements for Leonard to do things may have been abandoned due to the lack of organizational buy-in. But I see a big difference here. Was it a deal designed to be a no show deal from the start or was it a deal that was designed for Kawhi to do things but not enforced? If it's the latter, I think it hurts Pablo's circumstantial case. To be sure, there are other things we could discuss about the deal not least of which is the high dollar amount. However, we first have to believe it possible that this may not have been intended to be a no-show contract.

Not sure I follow you:
- The deal was made with no prior vetting by anyone in the company, violating their own internal policies and controls
- The deal was made with no plan on how to use Kawhi or take advantage of it with the marketing department
- The deal was made for 10% of the cash raise they just had on a company that was on the verge of bankruptcy (ie doesn't fiscally make sense)
- The cost of the deal came out of an owner's pocket directly and didn't see related to the business ops of the firm
- There is no substantiative evidence they ever planned to use Kawhi and did not actually ever use Kawhi
- Kawhi on the surface would seem like a terrible fit for this type of marketing deal, he has no tie in to the company, industry, and isn't a noteworthy endorser of products, or known as a speaker

This sounds exactly like money laundering whether Cherny is being honest or not honest. Maybe its all on Sanberg and Cherny did leave because he knew this stuff was shady and he's not a bad guy, but that doesn't make anything about this deal seem legitimate.

There is an important thing to keep in mind about how Aspiration was being run. It has become clear that Sanberg, in practice, had tremendous control of the organization including over the board of directors. Sanberg was also someone who hid the truth, provided fake documents, lied to investors, etc. I don't think failure to follow internal policies and controls meant much to him. He was going to do what he felt like he needed to do.

Instead of cap circumvention, I think it is feasible that Sanberg felt desperate and simply negotiated a bad deal. Keep in mind he also offered the Clippers twice what Intuit did for naming rights on the new stadium. If he thought the relationship with Ballmer and the Clippers was critical, I can see how getting a deal with their superstar player would also seem critical in his eyes.

Now, we know what happened when he brought back this deal to the management team. They hated it, including Cherny. Did Sanberg decide to use his own equity to get Cherny (and maybe others) to go forward? I think this is possible.

If we believe Cherny, we also know there were discussions to use Kawhi in marketing. We don't know for sure why nothing happened. I personally think it could have been some combination of the management team not being on board, shifting priorities, and, perhaps, even Kawhi being difficult to work with. But we don't know. I just see it as a possibility other than it being a planned no show contract from the beginning.

Overpaying a player in a sponsorship deal to make the Clippers happy is cap circumvention.

[jnrjr79]

There was an email obtained by The Athletic about this and written about in the September 12 article by Mike Vorkunov. I won't paste it since it's behind a paywall. The email was from co-founder Joe Sanberg to the leadership team. In it, Sanberg mentions that Cherny (the CEO) "judged the deal to be not worth doing". He also mentioned in the email that the $20 million of stock to be given to Kawhi would be his (Sanberg's). I think it's clear that this deal was Sanberg's even if Cherny ended up signing off.

I agree that requirements for Leonard to do things may have been abandoned due to the lack of organizational buy-in. But I see a big difference here. Was it a deal designed to be a no show deal from the start or was it a deal that was designed for Kawhi to do things but not enforced? If it's the latter, I think it hurts Pablo's circumstantial case. To be sure, there are other things we could discuss about the deal not least of which is the high dollar amount. However, we first have to believe it possible that this may not have been intended to be a no-show contract.

A lot of people have been saying things generally in line with the bolded above, but IMO it's not true. The test here isn't whether it was a no-show deal or not. It's whether the deal was fair market value for the services rendered. $28 million is wildly higher than FMV, even if Kawhi had ended up cutting a few ads for the company or whatever.

By contrast, Robert Downey Jr. (who is way more famous than Kawhi) received less than $2 million and actually promoted the company.

Mark Cuban mentioned that around the time of the deal, in the crypto space, Tom Brady got a contract of $55 million over three years requiring 20 hours of his time per year. Steph Curry got a similar deal for $35 million.

Now, obviously, Kawhi Leonard doesn't have the marketability that those two have. However, I suspect these were the benchmarks. Not Downey's deal.

To be clear, this was a terrible, stupid deal for many reasons. However, organizational leaders make terrible, stupid deals sometimes. We should know, we're Bulls fans!

There is no reason to throw out Downey's deal (or Leonoardo DiCaprio's) as a useful metric of what Aspiration actually thought was reasonable to spend on promotional activity.

The crypto stuff involves way more $$$ than Aspiration and isn't really a good "comp" IMO. And at least those folks actually had to make ads!

[Evil_Headband]

While the person making the deal has changed, this makes the deal itself sound even more shady. A desperate founder gave up his own personal stock to Kawhi in a deal that made no sense and was vetted by no one, in order for Balmer to inject a ton of cash.



Not sure I follow you:
- The deal was made with no prior vetting by anyone in the company, violating their own internal policies and controls
- The deal was made with no plan on how to use Kawhi or take advantage of it with the marketing department
- The deal was made for 10% of the cash raise they just had on a company that was on the verge of bankruptcy (ie doesn't fiscally make sense)
- The cost of the deal came out of an owner's pocket directly and didn't see related to the business ops of the firm
- There is no substantiative evidence they ever planned to use Kawhi and did not actually ever use Kawhi
- Kawhi on the surface would seem like a terrible fit for this type of marketing deal, he has no tie in to the company, industry, and isn't a noteworthy endorser of products, or known as a speaker

This sounds exactly like money laundering whether Cherny is being honest or not honest. Maybe its all on Sanberg and Cherny did leave because he knew this stuff was shady and he's not a bad guy, but that doesn't make anything about this deal seem legitimate.

There is an important thing to keep in mind about how Aspiration was being run. It has become clear that Sanberg, in practice, had tremendous control of the organization including over the board of directors. Sanberg was also someone who hid the truth, provided fake documents, lied to investors, etc. I don't think failure to follow internal policies and controls meant much to him. He was going to do what he felt like he needed to do.

Instead of cap circumvention, I think it is feasible that Sanberg felt desperate and simply negotiated a bad deal. Keep in mind he also offered the Clippers twice what Intuit did for naming rights on the new stadium. If he thought the relationship with Ballmer and the Clippers was critical, I can see how getting a deal with their superstar player would also seem critical in his eyes.

Now, we know what happened when he brought back this deal to the management team. They hated it, including Cherny. Did Sanberg decide to use his own equity to get Cherny (and maybe others) to go forward? I think this is possible.

If we believe Cherny, we also know there were discussions to use Kawhi in marketing. We don't know for sure why nothing happened. I personally think it could have been some combination of the management team not being on board, shifting priorities, and, perhaps, even Kawhi being difficult to work with. But we don't know. I just see it as a possibility other than it being a planned no show contract from the beginning.

Overpaying a player in a sponsorship deal to make the Clippers happy is cap circumvention.

I think I recall reading that. You are technically right. However, in practice, the NBA isn't going to penalize a team for a player signing a marketing deal that they weren't involved with.

[jnrjr79]

There is an important thing to keep in mind about how Aspiration was being run. It has become clear that Sanberg, in practice, had tremendous control of the organization including over the board of directors. Sanberg was also someone who hid the truth, provided fake documents, lied to investors, etc. I don't think failure to follow internal policies and controls meant much to him. He was going to do what he felt like he needed to do.

Instead of cap circumvention, I think it is feasible that Sanberg felt desperate and simply negotiated a bad deal. Keep in mind he also offered the Clippers twice what Intuit did for naming rights on the new stadium. If he thought the relationship with Ballmer and the Clippers was critical, I can see how getting a deal with their superstar player would also seem critical in his eyes.

Now, we know what happened when he brought back this deal to the management team. They hated it, including Cherny. Did Sanberg decide to use his own equity to get Cherny (and maybe others) to go forward? I think this is possible.

If we believe Cherny, we also know there were discussions to use Kawhi in marketing. We don't know for sure why nothing happened. I personally think it could have been some combination of the management team not being on board, shifting priorities, and, perhaps, even Kawhi being difficult to work with. But we don't know. I just see it as a possibility other than it being a planned no show contract from the beginning.

Overpaying a player in a sponsorship deal to make the Clippers happy is cap circumvention.

I think I recall reading that. You are technically right. However, in practice, the NBA isn't going to penalize a team for a player signing a marketing deal that they weren't involved with.

Sure, I think the NBA won't punish the Clippers if they can somehow demonstrate they had no knowledge of Kawhi getting the sweetheart deal. (I don't think that's what will actually be revealed, but who knows?)

They could still punish Kawhi, though.

[LateNight]

There was an email obtained by The Athletic about this and written about in the September 12 article by Mike Vorkunov. I won't paste it since it's behind a paywall. The email was from co-founder Joe Sanberg to the leadership team. In it, Sanberg mentions that Cherny (the CEO) "judged the deal to be not worth doing". He also mentioned in the email that the $20 million of stock to be given to Kawhi would be his (Sanberg's). I think it's clear that this deal was Sanberg's even if Cherny ended up signing off.

I agree that requirements for Leonard to do things may have been abandoned due to the lack of organizational buy-in. But I see a big difference here. Was it a deal designed to be a no show deal from the start or was it a deal that was designed for Kawhi to do things but not enforced? If it's the latter, I think it hurts Pablo's circumstantial case. To be sure, there are other things we could discuss about the deal not least of which is the high dollar amount. However, we first have to believe it possible that this may not have been intended to be a no-show contract.

A lot of people have been saying things generally in line with the bolded above, but IMO it's not true. The test here isn't whether it was a no-show deal or not. It's whether the deal was fair market value for the services rendered. $28 million is wildly higher than FMV, even if Kawhi had ended up cutting a few ads for the company or whatever.

By contrast, Robert Downey Jr. (who is way more famous than Kawhi) received less than $2 million and actually promoted the company.

Mark Cuban mentioned that around the time of the deal, in the crypto space, Tom Brady got a contract of $55 million over three years requiring 20 hours of his time per year. Steph Curry got a similar deal for $35 million.

Now, obviously, Kawhi Leonard doesn't have the marketability that those two have. However, I suspect these were the benchmarks. Not Downey's deal.

To be clear, this was a terrible, stupid deal for many reasons. However, organizational leaders make terrible, stupid deals sometimes. We should know, we're Bulls fans!

It’s not the time, it’s what you do with their likeness. Maybe Tom Brady didn’t have a huge time commitment but he was in multiple ads. Like, Michael Jordan doesn’t actually have to do much for Nike, but they are licensing his likeness so they pay him tons of money. This is why the Kawhi thing is so egregious - it would not have taken long to put up an ad with his face on it or have him release a social post. They could’ve done it without him even showing up. They didn’t do any of that

[jnrjr79]

A lot of people have been saying things generally in line with the bolded above, but IMO it's not true. The test here isn't whether it was a no-show deal or not. It's whether the deal was fair market value for the services rendered. $28 million is wildly higher than FMV, even if Kawhi had ended up cutting a few ads for the company or whatever.

By contrast, Robert Downey Jr. (who is way more famous than Kawhi) received less than $2 million and actually promoted the company.

Mark Cuban mentioned that around the time of the deal, in the crypto space, Tom Brady got a contract of $55 million over three years requiring 20 hours of his time per year. Steph Curry got a similar deal for $35 million.

Now, obviously, Kawhi Leonard doesn't have the marketability that those two have. However, I suspect these were the benchmarks. Not Downey's deal.

To be clear, this was a terrible, stupid deal for many reasons. However, organizational leaders make terrible, stupid deals sometimes. We should know, we're Bulls fans!

It’s not the time, it’s what you do with their likeness. Maybe Tom Brady didn’t have a huge time commitment but he was in multiple ads. Like, Michael Jordan doesn’t actually have to do much for Nike, but they are licensing his likeness so they pay him tons of money. This is why the Kawhi thing is so egregious - it would not have taken long to put up an ad with his face on it or have him release a social post. They could’ve done it without him even showing up. They didn’t do any of that

Yep, and this is why "we were gonna have him do stuff, but just didn't get around to it" is so unpersuasive. There was plenty they could do without Kawhi having to lift a finger, like merely announcing Kawhi was a sponsor of the company. It's pretty telling they kept his sponsorship deal secret.

[dougthonus]

There is an important thing to keep in mind about how Aspiration was being run. It has become clear that Sanberg, in practice, had tremendous control of the organization including over the board of directors. Sanberg was also someone who hid the truth, provided fake documents, lied to investors, etc. I don't think failure to follow internal policies and controls meant much to him. He was going to do what he felt like he needed to do.

I will take your word for it. I don't think this is really all that relevant from the NBA's perspective.

Instead of cap circumvention, I think it is feasible that Sanberg felt desperate and simply negotiated a bad deal. Keep in mind he also offered the Clippers twice what Intuit did for naming rights on the new stadium. If he thought the relationship with Ballmer and the Clippers was critical, I can see how getting a deal with their superstar player would also seem critical in his eyes.

Now, we know what happened when he brought back this deal to the management team. They hated it, including Cherny. Did Sanberg decide to use his own equity to get Cherny (and maybe others) to go forward? I think this is possible.

If we believe Cherny, we also know there were discussions to use Kawhi in marketing. We don't know for sure why nothing happened. I personally think it could have been some combination of the management team not being on board, shifting priorities, and, perhaps, even Kawhi being difficult to work with. But we don't know. I just see it as a possibility other than it being a planned no show contract from the beginning.

Cherny said there were discussions with Marketing, but the other executives said those discussions were only made AFTER the deal was signed, not before the deal was signed. Ie, we made this deal, figure out something to do here.

It's literally 100x more plausible that he gets on Balmer's good side by funneling this money (not illegal from his end or an issue that matters at all to him) in order to get some money. While he's doing "NBA money laundering", there is nothing illegal about that. It violates the CBA, but aspiration isn't bound by (nor cares about) the CBA. So for Sanberg, this is a totally legit deal. I take money from Balmer and I give it to Kawhi, and I take a cut, and figure out how to use him after the fact.

Nothing is wrong about that from Sanberg's perspective or Aspiration's perspective, the only problem is for Balmer/Clippers/NBA.

[jnrjr79]

There is an important thing to keep in mind about how Aspiration was being run. It has become clear that Sanberg, in practice, had tremendous control of the organization including over the board of directors. Sanberg was also someone who hid the truth, provided fake documents, lied to investors, etc. I don't think failure to follow internal policies and controls meant much to him. He was going to do what he felt like he needed to do.

I will take your word for it. I don't think this is really all that relevant from the NBA's perspective.

Instead of cap circumvention, I think it is feasible that Sanberg felt desperate and simply negotiated a bad deal. Keep in mind he also offered the Clippers twice what Intuit did for naming rights on the new stadium. If he thought the relationship with Ballmer and the Clippers was critical, I can see how getting a deal with their superstar player would also seem critical in his eyes.

Now, we know what happened when he brought back this deal to the management team. They hated it, including Cherny. Did Sanberg decide to use his own equity to get Cherny (and maybe others) to go forward? I think this is possible.

If we believe Cherny, we also know there were discussions to use Kawhi in marketing. We don't know for sure why nothing happened. I personally think it could have been some combination of the management team not being on board, shifting priorities, and, perhaps, even Kawhi being difficult to work with. But we don't know. I just see it as a possibility other than it being a planned no show contract from the beginning.

Cherny said there were discussions with Marketing, but the other executives said those discussions were only made AFTER the deal was signed, not before the deal was signed. Ie, we made this deal, figure out something to do here.

It's literally 100x more plausible that he gets on Balmer's good side by funneling this money (not illegal from his end or an issue that matters at all to him) in order to get some money. While he's doing "NBA money laundering", there is nothing illegal about that. It violates the CBA, but aspiration isn't bound by (nor cares about) the CBA. So for Sanberg, this is a totally legit deal. I take money from Balmer and I give it to Kawhi, and I take a cut, and figure out how to use him after the fact.

Nothing is wrong about that from Sanberg's perspective or Aspiration's perspective, the only problem is for Balmer/Clippers/NBA.

FWIW, you could pretty plausibly make a civil claim out against Aspiration in those circumstances for tortious interference with contractual relations. Every state will have its own tortious interference caselaw and it may differ to some extent, but generally speaking, it requires:

- A valid contract between the plaintiff and a third party exists.
- The defendant has knowledge of that contract.
- The defendant has the requisite intent to induce the third party to breach the contract with the plaintiff.
- The defendant lacks justification to induce that breach.
- The breach causes damages to the plaintiff.

Sometimes "the process is the punishment" as they say, so even if the NBA didn't ultimately prevail, they might inflict some pain if they did it. Well, not now, since Aspiration is defunct, but otherwise, it could theoretically do so. And I guess I could see a universe where they might think about it, just to dissuade other companies from doing the same sort of stuff, if cap circumvention really is a cardinal sin as Silver has suggested.

[dougthonus]

FWIW, you could pretty plausibly make a civil claim out against Aspiration in those circumstances for tortious interference with contractual relations. Every state will have its own tortious interference caselaw and it may differ to some extent, but generally speaking, it requires:

- A valid contract between the plaintiff and a third party exists.
- The defendant has knowledge of that contract.
- The defendant has the requisite intent to induce the third party to breach the contract with the plaintiff.
- The defendant lacks justification to induce that breach.
- The breach causes damages to the plaintiff.

Sometimes "the process is the punishment" as they say, so even if the NBA didn't ultimately prevail, they might inflict some pain if they did it. Well, not now, since Aspiration is defunct, but otherwise, it could theoretically do so. And I guess I could see a universe where they might think about it, just to dissuade other companies from doing the same sort of stuff, if cap circumvention really is a cardinal sin as Silver has suggested.

Clearly down side street here, but off the cuff, I'd think:
1: Hard to say the defendant would have enough knowledge of the contract. Do you think Aspiration knows the intricacies of the CBA?
2: Hard to see the league suing individual companies over this, feels like way worse PR for them than they'd want to deal with.

So I'd say maybe this is a technical risk, but probably not a practical one.

[dougthonus]

I think I recall reading that. You are technically right. However, in practice, the NBA isn't going to penalize a team for a player signing a marketing deal that they weren't involved with.

If the overpayment was some small amount with quid pro quo in there some how, probably not.

When the overpayment is literally 100% of the fee, and the owner is directly paying that fee to the company, so it is straight pass through, I think that's different.

We'll see what Silver decides to do of course, like I said earlier, in the end Silver reports to the 30 owners. His actions will be determined largely by what the other owners collectively want to happen. If they all have the same bodies buried somewhere else, they may want this to go away (or enough of them do), if this is a huge outlier, they may want to burn Balmer badly.

Only a small amount of this (IMO anyway) is really relevant to what fans think should happen. The league will create a narrative to explain to fans, but the outcome will be driven by what the other owners want to happen IMO.