The Clippers and Raptors agreed to terms on June 30 on a blockbuster trade that will send Kawhi Leonard back to Toronto, but three days after the moratorium, the deal still hasn’t been made official.
On Thursday, the two teams explained why, announcing that the trade is on hold until after the NBA has completed its investigation into allegations that the Clippers circumvented the salary cap to pay the star forward via a no-show endorsement deal with the now-bankrupt green energy banking company Aspiration.
“For the past 10 months, our organization has fully cooperated with an NBA investigation, participating in dozens of interviews, providing tens of thousands of documents, and facilitating access to our staff,” the Clippers said in a statement to ESPN’s Shams Charania (Twitter link). “While the process has been challenging, we have remained committed to transparency.
“On June 30, we reached an agreement in principle to trade Kawhi Leonard to the Toronto Raptors. We have since been informed that the trade can only be finalized if the Raptors’ ownership group assumes the risk of penalties related to Kawhi’s contract that could theoretically result from the ongoing investigation.
“The investigation is ongoing, and we expect the trade to be finalized following its conclusion.
“At the heart of this investigation are Joe Sanberg and Aspiration. We did not funnel money to Kawhi Leonard through Aspiration. Like many sophisticated investors, financial institutions, and business partners, we were victims of a fraud initiated by Sanberg, who has been convicted and sentenced to 14 years in prison.
“We recognize the uncertainty this has created and the impact it has had on our team, our fans, the Raptors organization, their fans, and the players whose futures remain affected while this process continues. We remain confident that, when the facts are evaluated fairly and thoroughly, the NBA will confirm exactly what we have said from the beginning: We have not done what we are accused of doing.”
The Raptors put out their own brief statement in which they, like the Clippers, say they expect to move forward with the trade once the NBA’s investigation wraps up (Twitter link via Blake Murphy of Sportsnet.ca):
“Regarding our planned trade with the L.A. Clippers for Kawhi Leonard, the NBA league office informed us that as a result of the ongoing investigation involving the Clippers, we would assume the risk of any potential outcome of the investigation impacting Kawhi. In light of this, we will wait until the league’s investigation is complete.
“The Raptors remain eager to bring Kawhi back to Toronto and look forward to a swift resolution for our players, our organization, and our fans.”
It has been over 10 months since the NBA hired the law firm Wachtell, Lipton, Rosen & Katz to investigate Aspiration’s ties to the Clippers, owner Steve Ballmer, and Leonard. The probe was opened after podcaster and investigative journalist Pablo Torre reported that Ballmer was among the company’s investors and that Leonard agreed to lucrative endorsement deal that didn’t require him to actually do any endorsement work for the company.
Torre spoke to Aspiration employees who described the arrangement as salary cap circumvention designed to pay Leonard beyond his NBA salary. The Clippers have steadfastly denied those allegations, contending that Ballmer and Leonard separately reached agreements with the company – a team sponsor – and insisting that Ballmer was the victim of fraud, while Kawhi’s unusual endorsement deal was the result of Aspiration’s mismanagement.
NBA commissioner Adam Silver suggested at a press conference in early June that the investigation was nearing its end, but he didn’t provide a definitive timeline and there haven’t been any updates from the league since then.
Depending on the league’s findings, it’s not entirely out of the question that Leonard’s contract could be voided, which would throw a serious wrench into the trade agreement between the Clippers and Raptors. That has long been considered a long-shot scenario, but the possibility of fines or lost draft picks for the Clippers remains very much in play, so it makes sense that the Raptors would have no interest in assuming the risk of those penalties themselves.
With well over two months until training camps begin, there’s no urgency to complete the trade immediately, and the Clippers and Raptors both expressed optimism within their statements that it’ll get done sooner or later. Still, this is a situation worth monitoring closely in the coming days and weeks, and will only further increase the anticipation for the eventual announcement of the NBA’s findings.
If and when the deal gets done, it’ll send Brandon Ingram, Gradey Dick, and a series of draft assets, including two future unprotected first-round picks, to the Clippers.
