🏀 The Fascinating $28m Scandal Taking over the NBA

Some quick hitters today as there are some fascinating things happening in the world of sport that I must bring to you.

Later we will discuss Daniel Levy’s departure and I will show you some statistics that may shock you. But first, there is a massive scandal brewing in the NBA which has the potential to have incredible ramifications.

I do not typically speak on US Sports, but this one is too big to ignore. So let’s dive straight in…

For those unaware, there are 4 parties involved with this story:

1. Kawhi Leonard: One of the best NBA players of our generation

2. Steve Ballmer: One of the richest men in the world. Former CEO of Microsoft and owner of the LA Clippers (the team Kawhi plays for)

3. Aspiration: The startup at the centre of the scandal

4. Pablo Torre: Ex-ESPN host, turned independent content creator who revealed the entire thing

As you may know, in the NBA player salaries are tightly controlled by a salary cap. Owners cannot just top up a superstar’s wages with hidden perks or side deals as these arrangements would be outside of the league-wide salary cap structure.

This particular situation is explosive in nature because it looks like Clippers owner Steve Ballmer may have used his investment in the fintech start-up Aspiration to funnel $28m(!) to Kawhi Leonard. This $28m of course being, outside of the cap.

The timeline of everything is interesting:

• August 2021, Kawhi re-signed with the Clippers under a 4-year, $176 million deal. A massive contract but crucially it was less than the upper limit he could have pushed for. This deal was considered “team-friendly” at the time too as him “taking less” allowed the Clippers to sign other players around him

• September 2021: Steve Ballmer invests $50m of his own money into Aspiration

• April 2022: Kawhi’s company KL2 Aspire LLC, reportedly signs a $28m endorsement contract with Aspiration. A crucial note here is that it was a “no-show” deal. Kawhi didn’t appear in adverts, marketing campaigns, or post anything about them on social media. The payments were still made

• 2022–2024: Aspiration runs into trouble. The firm collapses, and its co-founder pleads guilty to fraud after milking investors out of $248m.

• September 2025: Journalist Pablo Torre exposes the details, suggesting the endorsement was effectively a disguised salary top-up. The NBA launches a full investigation, hiring top law firm Wachtell Lipton the same firm they used to oust Donald Sterling in 2009

The NBA takes salary-cap violations seriously. In 2000, the Minnesota Timberwolves lost FIVE YEARS of draft picks and were fined $3.5m for a secret contract they had with Joe Smith. That was quite the situation then and as you can see, there have been no other violations since!

That scandal was significantly smaller scale than this situation too.

Ballmer went on a ESPN this week to deny all claims. The evidence however, does seem quite compelling.

Meanwhile, Pablo Torre has become extremely popular online.

There is no real like-for-like equivalent in the Premier League as there is no salary cap structure. But last week I spoke about associate party transactions and how that is the one area in sport I think needs quick and intentional regulation. You can see why that type of thing is a problem in any league!

Elsewhere in the US, Julia Koch, widow of billionaire David Koch, has struck a historic deal to acquire 10% of the NFL’s New York Giants. On the surface this appears like a simple sports team acquisition but the reason why I’m writing about it today is for two reasons:

1. This acquisition values the NYGiants at $10 billion making it the highest valuation ever for an NFL franchise

2. Last year Julia Koch bought 15% of BSE Global, owners of the Brooklyn Nets, the Brooklyn Liberty and the Barclays Center. Deepening her ties to New York City

The broader trend I am noticing is that that modern elites are not just diversifying into sport but embedding themselves in key urban centres. Knighthead (a massive US asset management company) are entwining themselves with Birmingham here in the UK. Koch is already one of the city’s most prominent social and philanthropic figures in New York, she now holds influence across two of America’s biggest sports leagues.

I see a near future where owning teams is not enough. Owning venues and commercial real estate in the city is the real play and the real way to maximise shareholder value. I may create content around this soon.

Finally, someone who has maximised value better than anyone in the UK. This picture above is fascinating to me.

I am not a Spurs fan so I say this as a pure outsider but I have often thought the criticism of Daniel Levy to be somewhat unfair.

When he took charge, Spurs weren’t part of the conversation at the top. It was the “big four” and Spurs did not have the backing of a sovereign wealth fund or a Roman Abramovich. Levy still managed to push the club into what became the “big six.”

Yes, there was some fortune in Gareth Bale and Harry Kane emerging at the same club for almost nothing, but instead of cashing out early and letting them go to rivals, he held firm. That gave Spurs the foundation to build a side that finished in the top four as consistently as anyone.

On top of that, he delivered a world-class stadium and grew commercial revenues to a point where Spurs are now a secure top Premier League club. It’s weird to say this now but Spurs could easily have slipped into the cycle we’ve seen at Aston Villa, Newcastle or Everton, battling relegation or even dropping into the Championship… but they never once did.

He hasn’t delivered as many trophies as supporters would like, but he has delivered stability and financial strength and consistent European football. Spurs are now in a fantastic position to build for many years to come.

Food for thought.

See you next week.