Yin-Yang Contract! Mysterious endorsement! Leonard s contract storm!

A seemingly calm summer, a bombshell exploded in the NBA.

senior journalist Pablo Torre publicly accused that there was a fake endorsement contract of up to 28 million yuan between the Clippers and the star Leonard, and the company involved was the environmental protection company Aspiration, which had invested in and signed high-sponsored with the team.

The allegations are directed at Aspiration, which was founded in Los Angeles in 2013. In 2021, Ballmer invested 50 million in his personal name. Almost at the same time, the Clippers also signed a 23-year sponsorship contract with Aspiration.

What's more subtle is that Aspiration also signed a four-year, 28 million endorsement contract with Leonard during this period. But the endorsement looks more like a name-name agreement, and according to the investigation, Leonard has done little public publicity for the brand. The terms of the

contract also give Leonard the final decision, which means that he can not attend any event for Aspiration, but he can still receive 7 million yuan every year. The payment cycle of this contract happens to be highly coincident with Leonard's timeline for playing with the Clippers.

The reporter also found in the Aspiration bankruptcy documents that Leonard's company was on the list of creditors, and there were still 7 million unpaid. This endorsement fee not only exists, but also leaves a legal record.

What's more amazing is that the testimony of Aspiration's former financial personnel showed that the company had bluntly stated that the money was a team's operation to avoid salary caps. Even when the company is in financial trepidation, payments to Leonard are still a priority. The media also followed up and revealed that in addition to the 28 million cash endorsement, Leonard also received an additional stock compensation of about 20 million through the shares of the founder of Aspiration.

Putting all the clues together, we can basically put forward several key points: In the context of money, Ballmer personally invested 50 million in Aspiration, and the Clippers also signed huge sponsorships with him; in the high endorsement, Leonard received 28 million cash endorsement + 20 million stocks, which was basically close to Ballmer's total investment; there was no publicity requirement in the endorsement contract, but the reward was generous and the contract term was bound to the timeline of the Clippers.

In addition, Leonard's company is listed as a creditor in the bankruptcy evidence, which is enough to prove that the contract is true; and Aspiration's internal employees even bluntly stated that this move is to avoid salary caps.

In short, this transaction seems to be a real compensation for fake endorsements. The Clippers paid through a third-party company to make up for the additional salary that could not be paid to Leonard under the labor and capital agreement.

Of course, it is not the first time that the Clippers and Ballmer have been caught in similar controversy. In the summer of 2015, in order to recruit Jordan Jr., they arranged a 200,000 endorsement contract with Lexus. In the end, this illegal recruitment was discovered by the league and the Clippers were fined 250,000.

In addition, doubts were already accompanied by Leonard's joining the Clippers. He had the opportunity to sign a maximum salary of 141 million yuan in four years, but chose 103 million yuan in three years. Later, in 2021, he did not maximize his salary as soon as possible, but chose to sign a short-term contract first and then a long-term contract. It is really hard for people not to doubt whether there is any hidden truth in these unreasonable cards.

The more attention comes from Uncle Leonard. He has previously been exposed in many negotiations to make demands beyond the scope of the labor-capital agreement, such as private jets, luxury homes and even team shares. Although the league did not give clear penalties, these precedents are ahead, and it is not difficult for the outside world to doubt whether Leonard's signing process is fully compliant.

In addition, this is not the first time the NBA has encountered a Yin-Yang contract. As early as the 1999-2000 season, the Timberwolves secretly promised to make up for the future with high salary in order to renew Joe Smith. As a result, the Timberwolves were fined 3.5 million yuan, confiscated five first-round picks, and their contracts were invalidated, which was the strictest punishment in NBA history.

Before 1983, big city teams such as the Lakers and the Knicks in the league had strong financial resources and were able to continue to spend money to sign stars, while small market teams could not keep up. In order to maintain fairness, the NBA and the Player Union negotiated and introduced a labor-management agreement in 1983, and decided to set up a salary cap, which stipulates that the total salary paid to players by the entire team shall not exceed the salary cap announced by the league every year.

On the other hand, only one principle was added to the agreement at that time:

No one may bypass the salary cap in a circumventive manner.

This sentence seems to be deterrent, but it is very simple, without any details, and does not list any violations of the behavior, and does not have clear punishment standards, which is more like a warning.

Because the NBA's free agent market was not big at that time, the players' bargaining chips were limited, and the league had never encountered any evasion methods. Until more than a decade later, with the activation of the free market and the contract amount soaring, this warning quickly became insufficient. Teams and agents were thinking about various gray areas, focusing on delaying payments, linking private companies, and even giving future commitments to achieve the effect of retaining people.

In order to avoid recurring similar incidents, the 1999 labor-management agreement expanded the evasion clause, listing specific prohibited behaviors, such as any unauthorized private agreement, third-party compensation payment, delayed payment of salary, future contract commitments or false endorsements, false positions and other disguised ways of paying salary. At the same time, there are specific penalties for violating these regulations.

After this, the NBA began to show a heavy penalty attitude. Since entering the 2000s, the team has a clear understanding of the consequences of this rule, and basically no one dares to play this Yin-Yang contract technique..

However, it was also at that time that the player's salary and endorsement market expanded rapidly, and the league began to notice a potential problem. Some teams arranged for players to retire and then join the team's senior management, but in fact, it might be the reissue of the salary they did not receive when they were active. If these measures are not controlled, they may become another hidden operation to pay wages in disguise.

By the summer of 2019, as soon as the free market opened, many contracts were signed in seconds, and some celebrity players announced their signing of big contracts within a few minutes of the market opening. How could such speed be discussed immediately when it is legally opened? Everyone knows that these contracts have actually been negotiated behind the scenes.

On the surface, it seems to be an issue of early negotiation, but in fact it also touched the alliance's red line for avoiding wages. Because if everyone ignores the regulations and completes negotiations in advance, then exchange of interests such as third-party sponsorship and future commitments may also be hidden in the process, and another private act of avoiding salary caps will occur.

Therefore, in 2019, the league did not directly modify the labor and capital agreement, but passed a series of law enforcement upgrade measures to increase the penalties, including increasing the fine for early contact with players to 10 million, the league can confiscate draft picks, and even directly revoke illegal contracts, randomly check the call records of teams, players, and agents, etc.

Although these measures are mainly aimed at early contact, they also have a substantial impact on wage avoidance assets. Once the league has the right to investigate call records, it is easier to detect internal violations of the team. After these chaos and the gray operations that the team has been constantly trying for many years, the League and the Players Guild decided to formally write the past lost standards into the provisions in the 2023 labor-management agreement, and the evasion clauses have begun to become more complete than before and the punishments are stricter.

First of all, the rules and regulations clearly include various avoidance methods such as fake endorsement, third-party investment, delayed payment, and arrangement of false positions after retirement. If a player and the company associated with the team boss sign an endorsement or consultant contract, the league can ask independent experts to evaluate whether the market exceeds the reasonable market. The excess is naturally included in the salary cap, or even the entire contract is revoked. The penalty standards have also been greatly improved, and the team can be fined up to 4.5 million to 5.5 million. In the most serious cases, the contract is directly declared invalid, the draft pick is escalated, and the first round is confiscated.

The combination of these measures means that the avoidance clause has been renovated in 1983, supplemented in 2005, and upgraded in 2019, and finally integrated into a complete system with almost no dead ends in 2023. It is not just a clause written on paper, but a line of defense that "can be checked and verified at any time and will be severely punished for violations."

Back to the dispute between the Clippers and Leonard, facing the allegations, the Clippers and Ballmer denied it immediately. The team stated that the partnership had already ended; Ballmer also bluntly stated in an exclusive interview with ESPN that he was a victim of the Aspiration scam, saying that he invested 50 million yuan and only accounted for less than 3% of the company's shares and had no substantial control; and the investment time does not match the time of Leonard's contract; Aspiration has also attracted many celebrities to invest, and he is not the only leader behind the scenes.

Then the former boss of the Mavericks, Cuban, also spoke for Ballmer. He believes that if Ballmer really wants to evade salary, he will naturally not let Aspiration go bankrupt and expose internal documents to the public. With Ballmer's wealth, he can completely fill the holes privately.

But anyway, doubts have arisen. It will take at least one month for the alliance to initiate a lawyer's investigation. By then, Ballmer needs to face all the team bosses inquiry at the Council, and this is a real inspection. The original intention of the

NBA salary cap is to give small market teams a chance to compete. But in reality, the combination of star players and big market teams can always give birth to a gray space. No matter how it is operated, it essentially revolves around a purpose:

How to give players more benefits without touching the upper limit? The

alliance is constantly patching rules, but it seems that it has not been able to catch up with market changes. Because of this, every revelation will cause the NBA to re-examine the labor and capital system and redefine the so-called fair competition.

At present, the final direction of this storm has not been revealed. Once the charge is established, the Clippers naturally face severe penalties and Leonard's reputation will also be impacted. Especially at the key nodes of alliance expansion, amplification of broadcasting markets, and globalization development, such scandals are obviously not good news.

(Doctor)