Washing Up the Clippers' Punishment, with Henry Abbott

Did ESPN get sold fake news? How much did Steve Ballmer lie? What did Kawhi really know? And what's NOT in the NBA's report? A punch-drunk Pablo calibrates his cynicism to explain unanswered questions from his former editor and fellow skeptic. Plus: The Windhole, honoring the webinar... and journalism in the shower. • Subscribe to TrueHoop by Henry Abbott https://www.truehoop.com/ • Previously on PTFO: Reacting to Clippers Judgment Day https://pod.link/1685093486/episode/NmE5OGM1Zjk5Yjg1NWExZmQzYTkwMTM5 Further reading: • "Pablo Torre 1, Mark Cuban 0" https://www.wsj.com/opinion/pablo-torre-mark-cuban-los-angeles-clippers-nba-ffe5bb01 (The Wall Street Journal) • "Sources: NBA has no evidence Ballmer funneled money to Leonard via sponsors" https://www.espn.com/nba/story/_/id/49639157/nba-la-clippers-aspiration-investigation-steve-ballmer-kawhi-leonard (ESPN) • "Summary Report of Independent Investigators Concerning the LA Clippers and Kawhi Leonard" https://www.wlrk.com/docs/Report_of_Independent_Investigators_Concerning_the_LA_Clippers_and_Kawhi_Leonard.pdf (Wachtell, Lipton, Rosen & Katz) (Pablo Torre Finds Out is independently produced by Meadowlark Media and distributed by The Athletic. The views, research and reporting expressed in this episode are solely those of Pablo Torre Finds Out and do not reflect the work or editorial input of The Athletic or its journalists.) Hosted on Acast. See acast.com/privacy https://acast.com/privacy for more information.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Pablo Torre?

  Welcome to Pablo Torre Finds Out. I am Pablo Torre and today we're gonna find out what this sound is.

• 0:06Speaker 01

  Does that not expose Steve Ballmer as a liar?

• 0:09Pablo Torre?

  Right after this.

• 0:14Speaker 02

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• 1:10Pablo Torre?

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• 1:51Pablo Torre?

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• 2:17Pablo Torre?

  I want to get to the whole, like, sweep of this story, but through your brain, Henry Abbott. And thank you for coming back and vibrating with a similar level of excitement. I want to have you here and have you ask me questions, and I will do my best to also pose, I think, questions that have not been said otherwise. And I don't want to call this a mailbag. It's not what this is.

• 2:40Speaker 01

  This is not a mailbox. Yeah.

• 2:42Pablo Torre?

  Despite it being shiny. Not a mailbox, your skull. I do also want to say that this story is unfolding in the sort of funhouse mirror way in which I go to the newsstand this morning, because I support print journalism, and I pick up a copy of The Wall Street Journal, and I flip to my favorite section personally, which is the opinion section, because I am fiscally conservative, famously.

• 3:12Speaker 01

  For sure you are.

• 3:13Pablo Torre?

  And this is the headline in one of the--

• 3:16Speaker 01

  Oh, I love that. Pablo Torre, one, Mark Cuban, zero.

• 3:22Pablo Torre?

  I just want to know what got boxed out--

• 3:25Speaker 01

  Yeah.

• 3:26Pablo Torre?

  --of the op-ed page in this morning's Wall Street Journal.

• 3:28Speaker 01

  No Bitcoin today. Yeah.

• 3:30Pablo Torre?

  Somewhere Scott Besant is furious.

• 3:32Speaker 01

  Yeah, yeah, yeah.

• 3:32Pablo Torre?

  But this is the sort of strange, I would say, realignment that's happening now?

• 3:38Speaker 01

  It is. Well done. This is actually wrong, though, because it's for sure Mark Cuban minus one. I re-listened to it with an uncharitable heart and feeling a little prejudgy about Mark Cuban, who I found to be kind of overbearing and annoying in these conversations with you.

• 3:52Pablo Torre?

  No.

• 3:52Speaker 01

  I-- there's a part where you said, "Yeah, but they didn't advertise any of these deals," and he just lost himself with how much you don't understand about business and activations and business-to-business and direct-to-consumer and all this just horse [BLEEP]. But then in the Wachtell report, they're just like, "Oh, they never activated, which makes no sense." And now Mark Cuban's publicly like, "Hey, good job, Pablo." It's like, "Oh, because Wachtell said it. Now it's real?" Like, it was obvious a year ago.

• 4:17Pablo Torre?

  And that's the kernel of why we're talking.

• 4:19Speaker 01

  Yeah.

• 4:20Pablo Torre?

  What did we learn from the Wachtell report? What is yet to be discussed? How do we explain what is, by any reasonable metric, the largest punishment in NBA history and in contention for what is, depending on how you tally up, the $30 million that Ballmer has been fined, plus the year suspension that he has from his own building, plus Gillian Zucker, president of business, a year suspension, Lawrence Frank, president of basketball, six months, five first-round draft picks, according to Ballmer's letter to Adam Silver, in which he is threatening litigation. There's a lot happening here. That's a $50 million legal fee to the aforementioned Wachtell, Lipton, Rosen, and Katz, which has helped save long-form writing--

• 5:03Speaker 01

  Thanks.

• 5:03Pablo Torre?

  --as you have the stack in front of you.

• 5:05Speaker 01

  It's a lot.

• 5:06Pablo Torre?

  So where should we start in the timeline here? Because people have been coming to me, and I love that they are coming to me with questions on the back of the report. But as you say, we've been at this, and there's so much more. And even Wachtell also says, "There is so much more."

• 5:22Speaker 01

  Well, you and I spoke recently on the phone, and I was impressed by the howitzer of, like, unpublished information that resides within you. And so I feel my job here is to open some of those portals and just let it go, right?

• 5:35Pablo Torre?

  As my former editor at ESPN--

• 5:37Speaker 01

  Yeah.

• 5:38Pablo Torre?

  This is a very funny conversational dynamic that you've just described, given the larger dynamic that we're about to get into.

• 5:45Speaker 01

  We're good. We're gonna fill the hour. No problem. This is what I'm very confident about.

• 6:06Speaker 01

  So first thing, let's talk about the ESPN article, right? So August 17th, Don Van Natta, Baxter Holmes, Ramona Shelburne, people that you and I used to work with and know well and respect, published a story that began, "The NBA has found no evidence showing LA Clippers under Steve Ballmer funneled money through team sponsors to pay Kawhi Leonard in order to circumvent the salary cap," according to three people with knowledge of discussions with the two sides. And then there was a later paragraph that said, talking about Boingo and Daktronics, that said, "But like aspiration, there's no evidence that Ballmer funneled money through these companies." And how does that sit with you now?

• 6:44Pablo Torre?

  The question that I get asked most often is along these lines. How did we go from the public interpretation being Steve innocent, no evidence, to there were four companies that he was doing parallel schemes with to circumvent the salary cap, and here is 35 pages of evidence, in addition to our 14, then 15, now 16-part series on this thing? And I think people need to understand that when we've been reporting this story on this show, we have been interviewing lots and lots of people, human sources, who've been extraordinarily clear from the start what this was, including in a federal whistleblower

• 7:26Pablo Torre?

  complaint filed in 2023 under penalty of perjury. And so I remember where and when I read the ESPN story. Because this is embarrassing for me personally, I was in the shower.

• 7:37Speaker 01

  That is a little weird. Yeah.

• 7:38Pablo Torre?

  I'm a guy who sometimes needs to glance at his phone for journalistic reasons while I am, I guess, cleaning myself.

• 7:45Speaker 01

  I'm not gonna say I've never done that, but I've never talked about it in such a public forum before.

• 7:50Pablo Torre?

  I regret doing this already, but I want to be very detailed and transparent about how this article ended up cleaning the reputation, it seems, of the richest owner in American sports. And when I look at what that headline was and what is implied, I just want to say the framing of this, that's the thing that's crazy to me. What this was in retrospect, according to my reporting, as well as the Wachtell report, was the Clippers' legal case in response to these findings presented as if these were the findings.

• 8:29Speaker 01

  Mm-hmm.

• 8:30Pablo Torre?

  And so when they say, "No evidence," Henry, this whole thing has evidence in it. We have provided evidence.

• 8:40Speaker 01

  It's from the first episode. I just feel like, how could anybody say there's no evidence?

• 8:44Pablo Torre?

  The framing didn't pass the smell test to me. And I say that also because ESPN did not reach out for comment from me before they went with the story. Afterwards, I submitted a comment that said, effectively, "We stand by our reporting. We look forward to the NBA's ruling. Our investigation continues." That wasn't included, for whatever reason. But what I can tell you is that the Clippers, behind the scenes for a year, have been mounting an aggressive PR campaign through their head of public relations, Chris Wallace, who is the comms guy across everything, who reports directly to Steve Ballmer and Gillian Zucker

• 9:25Pablo Torre?

  and Lawrence Frank. He's a C-suite-level guy with relationships throughout the league. He is very active on the internet.

• 9:32Speaker 01

  He used to work at the league.

• 9:33Pablo Torre?

  He's a guy that people know.

• 9:35Speaker 01

  Yeah.

• 9:35Pablo Torre?

  And then they also, and this is important as well, hired a crisis PR person, whose job was to shop around the most exculpatory version of events to reporters.

• 9:46Speaker 01

  Mm-hmm.

• 9:47Pablo Torre?

  And I just would like to point out that this ESPN story was not the first time they got the framing of the story wrong. This was the through line of how they saw this from the start. And they were not alone. And I want to be generous insofar as I say, I think, according to my reporting, and according to the Clippers' statement, Henry, which was released within an hour of the ESPN story coming out, and the Clippers' statement was, again, a recitation of what in retrospect seems to be their legal case. This is about failure to supervise, which is bull [BLEEP]. This is about no evidence, which is now we can tell, bull [BLEEP]. That was something that they fed to these reporters, our former

• 10:32Pablo Torre?

  colleagues at ESPN, while the Clippers themselves knew that this was not it. There was more. And I think, according to the reporting, that the ESPN story was a bit of information asymmetry--

• 10:50Pablo Torre?

  And I would imagine that if I'm one of those reporters, I would be furious that this is how we were sold a bill of goods and it ended up being, in fact, based on the evidence, the opposite of the way it was framed.

• 11:05Speaker 01

  It's clever because I don't think these are reporters who would just write what they were told to write.

• 11:10Pablo Torre?

  Agreed.

• 11:11Speaker 01

  They're reporters. And there is insider-y stuff in that story, right? They had some real sourcing about these meeting between Rick Buchanan of the NBA and David Kelly.

• 11:20Pablo Torre?

  Yeah.

• 11:21Speaker 01

  Who's Ballmer's attorney.

• 11:22Pablo Torre?

  David Kelly is his attorney at O'Melveny, Ballmer's personal attorney. David Kelly, also a different David Kelly, head of the NBA Players Association.

• 11:31Speaker 01

  And isn't one of them like a movie producer? Isn't there a movie producer, David Kelly?

• 11:34Pablo Torre?

  We're in the David Kelly universe.

• 11:36Speaker 01

  I'm surprised at how the NBA handled this too, though. I mean, you and I have both been part of many stories where you check in with NBA PR about something sensitive and there's a whole menu of ways they might respond. Often it involves yelling in four-letter words and belittling your personality and this kind of stuff. But this was a new one for me where they, you know, with three top known national writers.

• 11:57Pablo Torre?

  Yeah, and Sean Sharania also contributed reporting to this thing.

• 11:59Speaker 01

  I think it was five, really.

• 12:00Pablo Torre?

  Bobby Marks, another guy.

• 12:03Speaker 01

  Former Nets executive, yeah.

• 12:04Pablo Torre?

  Who worked with Lawrence Frank.

• 12:06Speaker 01

  Oh, good point.

• 12:06Pablo Torre?

  When he was there. The Clippers' web of connections through their front office, which by the way, their front office is massive.

• 12:12Speaker 01

  Yeah.

• 12:13Pablo Torre?

  It's not just the comms guy, it's not just the crisis PR guy that I hired, who I will get to at some point in this series.

• 12:18Speaker 01

  Let's do it.

• 12:18Pablo Torre?

  Because the crisis PR guy is so fascinating to me because these are the sort of dark arts dudes who spin behind the scenes that are called in for these campaigns. But the point is, even outside of that, they have lots of friendships and relationships. And you listen to all of the other ESPN reporters and they tell you, Brian Windhorst, who I also respect and have worked with for years, what he says is that Clippers officials looked him in the eye.

• 12:46Speaker 01

  Oh, they got him in the eye. Now we're good.

• 12:51Pablo Torre?

  Right in the.

• 12:51Speaker 01

  Right in the wind hole, yeah. That was inappropriate.

• 12:57Pablo Torre?

  Brian, I apologize for your former editor.

• 13:00Speaker 01

  That's on me. That's on me, Brian, sorry.

• 13:04Pablo Torre?

  But they looked in the whites of these reporters' eyes and said, there's nothing here. In fact, this dumb podcast has it backwards. That's what the implication of that story was. And so, look, why did it happen? And what does it say? It happened because there was clearly what the article, this is, this part of the article, I think, might have had the most important word in it. It was spirited. Rick Buchanan and David Kelly, Ballmer's David Kelly, spirited discussions, negotiations even, around what this was.

• 13:46Pablo Torre?

  And as soon as that article came out, what you discerned was that the Clippers and the NBA are in fact fighting right now. And so, why do they handle it this way?

• 13:54Speaker 01

  Yeah.

• 13:55Pablo Torre?

  It's because for the first time in public view, Henry, as I calibrate my cynicism, the Clippers and Adam Silver's league office and Wachtell Lipton were on opposite sides of this dynamic and their incentives were not aligned. And that spilled out into the public view. And so then, the next question is, so what does this say about where this punishment is headed?

• 14:20Pablo Torre?

  And that's where what I'm able to report now is that, yeah, Steve Ballmer was fundamentally uninterested in settling.

• 14:28Speaker 01

  This is the non-settlement settlement. This is what you get when you don't bargain.

• 14:32Pablo Torre?

  The NBA was looking forward to settling, for this to not be five first-round picks and $30 million and all these suspensions. This is what you get when you don't settle. And also, in some former fashion, when you actively try to tell a version of events that is not what is reflected in the reality of this report, which I am told, Steve Ballmer and Team Ballmer, legal team and the Clippers, they were not told a punishment, but they were told, here's what we got. And if you don't go forward to negotiate, given that, you end up getting the biggest

• 15:16Pablo Torre?

  punishment in the history of the NBA within a scope. That is so relatively narrow.

• 15:24Speaker 01

  You mean that there's more?

• 15:26Pablo Torre?

  There's more. And by the way, so people have also asked, like, what changed?

• 15:29Speaker 01

  Right.

• 15:29Pablo Torre?

  As a result of the ESPN story? Were they waiting on the public to react so that they could decide what to do? I am not going to yet wade into that. What I will simply say is that before this report came out, I was fully confident, based on my reporting, that we were not going to get 35 pages.

• 15:48Speaker 01

  Right.

• 15:49Pablo Torre?

  We would just get a cover sheet, a summary of findings, a ruling.

• 15:54Speaker 01

  They don't have to release the report. They just don't.

• 15:57Pablo Torre?

  And that would come on the backs of a settlement.

• 15:59Speaker 01

  Right.

• 16:00Pablo Torre?

  The whole point was to settle.

• 16:01Speaker 01

  Right.

• 16:02Pablo Torre?

  And after that ESPN story in which Mike Bass comes out, chief comms guy for the NBA, and he says, numerous and significant inaccuracies, the question was raised by the league itself, what was significant and what was inaccurate?

• 16:16Speaker 01

  Right.

• 16:17Pablo Torre?

  And now we got a 35-page document. And that is why I am grateful that this played out exactly the way it did. Because we got to see some of what the NBA knew.

• 16:30Speaker 01

  It's a real story of power in that one of the biggest executions of power you can have in sports is getting top reporters to write your narrative, right? And so, card played and it totally backfired. As you're describing it, this was contributory to this massive punishment.

• 16:49Pablo Torre?

  It was part of how the Clippers were defending themselves. And it was desperate in a way that the NBA ultimately rebuked with a clarity that I can't recall. I don't recall a fight like this happening that leads to consequences like this. Everybody would prefer that this not get out there.

• 17:09Speaker 01

  It's sort of like mommy and daddy, you're fighting and you don't want the kids to know. It's like, bad job, guys. Now everybody knows.

• 17:16Pablo Torre?

  And I can tell you as well, according to my reporting, that the NBA has been mystified by Steve Ballmer's refusal to come to the table and negotiate. And what I will say to that is, imagine now that there is in fact more. Imagine now that this report, and I loved reading this report, I just got to say, I found it well-written, I found it well-reasoned, I found it fascinating. I didn't agree with everything, but I noticed what decisions were being made and why. And the context to understand all of this is, if there is more, and this annoying podcast

• 18:01Pablo Torre?

  continues to report.

• 18:02Speaker 01

  It's gonna.

• 18:04Pablo Torre?

  How do we make it so that we can limit the blast radius?

• 18:10Speaker 01

  Right.

• 18:10Pablo Torre?

  While also getting enough to get the story in our rearview mirror? And now, if you're Steve Ballmer, just remember, according to this report and ours, you know that there's more. And you also are facing a civil suit in Los Angeles by 11 aspiration investors, Henry. The centerpiece of which is, you did not disclose publicly your real interests in this company, which you propped up to support your NBA deception, this cap survention fraud. And therefore, these 11 investors are suing Steve Ballmer for fraud in civil court that is proceeding right now. And I should also point out that Ballmer's same attorney, his personal attorney, who sent that very scary letter to Adam Silver, David N. Kelly, he has called the allegations

• 18:55Pablo Torre?

  about his client in the civil suit, quote, "based on sensational and patently false assertions made in a sports podcast."

• 19:04Speaker 01

  Hmm.

• 19:05Pablo Torre?

  End quote.

• 19:05Speaker 01

  It does sound shady, yeah.

• 19:08Pablo Torre?

  Don't listen to those guys. There is an SEC probe into aspiration, which is part of the original sin of this whole series as we've laid it out. There is an SEC probe into Daktronics. Given that Daktronics, in an earnings call, their CFO said last week, hours before the NBA released this report and this punishment, that they are getting, Daktronics is getting inquiries from the SEC requesting information, and they are cooperating and taking it seriously.

• 19:37Speaker 01

  And they said they provided documents to the Department of Justice, too. The Clippers did, I believe, at one point. So there's something, something's going on there.

• 19:42Pablo Torre?

  Yeah.

• 19:42Speaker 01

  That's never good.

• 19:43Pablo Torre?

  The DOJ had probed aspiration. Joe Samberg, the co-founder, is already convicted and sentenced 14 years in federal prison for wire fraud. So there is a lot of stuff in real life. Let's separate sports life and quote-unquote "real" life, although I think that we're seeing how important they are to each other. There's other stuff, man, that Steve Ballmer might even be more worried about in terms of his liability. And so, what I have to offer, everybody in the league who is wondering, why is Steve Ballmer behaving this way? Why is he refusing to compromise and admit anything? I would say that everyone should think about what happens when you admit anything in the sports context.

• 20:27Pablo Torre?

  What happens to the SEC probes? What happens to the civil suit? In which, by the way, Discovery, absent a settlement there, will yield even more documents relevant to all of these things. So is Ballmer fighting because he can't concede ground in the other stuff?

• 20:59Pablo Torre?

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• 22:33Pablo Torre?

  You're reading this report. What stuck out to you in terms of the scheme?

• 22:37Speaker 01

  So I first read it, my first take was, ooh, there's a lot of juice in here. This is more sauce than you usually get in a sports investigation report that's released to the public. And then I read it a second time. I think I'm now up to like four or five times. But the second time, I was like, man, there's a lot that's not here, which struck me as maybe along the lines of what you were just saying, which is, the league doesn't want Ballmer in trouble with the SEC, or whatever the other real-life things are.

• 23:05Pablo Torre?

  And it's not their interest.

• 23:06Speaker 01

  Not their interest.

• 23:07Pablo Torre?

  They don't get paid to get owners in trouble with the federal government?

• 23:12Speaker 01

  To be honest, the first thing that struck out to me was, laid in the game, walked up and found one credible source who might be able to establish that this money was paid to these firms for the purposes of giving it to Kawhi? Like, that was in your first episode. I think you had nine, including-

• 23:32Pablo Torre?

  By the end of it.

• 23:33Speaker 01

  Yeah.

• 23:33Pablo Torre?

  Nine sources at Aspiration who had tested-

• 23:35Speaker 01

  Talking with their voice modulated. And not to mention, did you mention, maybe before or earlier, the whistleblower report? Which is also what the [bleep] not mentioned in this thing? What? So that means to me, they met and they negotiated. This is what, to me, most likely, Rick Buchanan and our guy from O'Melveny were negotiating was, what can we put in there? What has to come out? And this whistleblower report didn't make it. I have a bullet list of other things that didn't make it, but those are the big ones to me. The notion that maybe this money went from point A to point B to point C for the purposes of going from point A to point C? Come on.

• 24:20Pablo Torre?

  The maybe is a generous maybe.

• 24:23Speaker 01

  It's so generous.

• 24:24Pablo Torre?

  And they didn't need to go beyond to levy the punishment, which is what I keep on thinking, which is, how could you have a scope? We've been saying the whole time, an independent investigation is not truly independent. This is outside counsel hired by a league, by any corporation.

• 24:36Speaker 01

  Right.

• 24:36Pablo Torre?

  They obey the scope given to them. They are working for their client. And that scope was narrow. The scope did not go beyond 2022.

• 24:43Speaker 01

  Right.

• 24:44Pablo Torre?

  The scope did not assess, according to the command effing that I keep on doing. They did not address Ballmer's personal investment of $50 million and what that meant for this company. They did not mention Dennis Wong.

• 24:58Speaker 01

  Which was unbelievable. To me, for me personally, I was in the gym. That was episode two. And look, I found episode one very, very convincing. I was predisposed to believe you as a journalist, and I knew that there was tons of work behind the scenes that made me believe it was more, et cetera. So I was trying to listen through the ears of a regular listener who didn't know you and believe in your process so much.

• 25:19Pablo Torre?

  Yes, yes, yes.

• 25:20Speaker 01

  And the moment that I was like, who could possibly disagree? It was the Dennis Wong moment in episode two. And the fact that, I mean, and you had a guy who worked at Aspiration saying how crazy the company was going down. They're firing people, they're in full crisis. This guy invests, and then they, like, nine days later, or whatever it was, transfer the money to Kawhi. That was, just, no one could possibly explain that to me in a way that makes sense. Or they should try. But the fact that they didn't try, I'm like, wow, this isn't the truest version of events.

• 25:49Pablo Torre?

  So by the way, this is relevant because Steve Ballmer has used a couple of alternate governors when he's not available to go to the big board of governors meeting. And that's happening, by the way, next week here in New York City, and I can't wait.

• 26:00Speaker 01

  It's gonna be so fun.

• 26:01Pablo Torre?

  So the question is, okay, Ballmer is banned for a year. Guess who else is banned for a year? His alternate governor, that he sometimes uses, Gillian Zucker. Other alternate governor, because he is the 1% holder of the team, the only limited partner in a strange arrangement that is not replicated anywhere else in the NBA, because no guy typically owns 99% of the team except for the richest guy in American sports, who happens to have, by the way, at last check, I miscalculate this all the time. I'm like $145 billion per Microsoft stock. Dude has $174 billion, thanks to Microsoft stock, right now. That guy can't make it, Gillian can't make it. Is Dennis Wong gonna be there?

• 26:38Speaker 01

  Great question.

• 26:39Pablo Torre?

  Is one question I have. And Dennis Wong, by the way, you say, thankfully, because I typically am the only one who has to yell about Dennis Wong, episode two of our series. But when he puts in the 1.99, and Kawhi gets paid the 1.75, nine days later, after he's been months late. And now we know in the report, by the way, what it's like when Kawhi doesn't get his money.

• 27:02Speaker 01

  It's a little salty.

• 27:02Pablo Torre?

  You hear from his reps.

• 27:04Speaker 01

  You do.

• 27:05Pablo Torre?

  You hear from Dennis Robertson. You get, without any ambiguity, a sense of how important this is to Team Kawhi.

• 27:13Speaker 01

  And the business office won't go get it? Then they go to Lawrence Frank, right?

• 27:16Pablo Torre?

  And they go, we've produced texts. Mitch Frankel, who's, by the way, I'm just gonna command F here. Yeah, he comes up a couple of times, but no punishment for Mitch Frankel.

• 27:26Speaker 01

  True.

• 27:27Pablo Torre?

  I'll just put a pin in that for now.

• 27:29Speaker 01

  Oh, you mean the guy who owns the Rhode Island Football Club?

• 27:33Pablo Torre?

  R.I.F.C. part-owner Mitch Frankel to you. Kawhi's actual licensed agent, who is no longer representing him, incidentally, even though he is not being punished in the text of this report, also interesting. We have communications. But I think the communication that Wachtell gives us, which I am deeply grateful for, is something that I had heard about. So Henry, if you could turn to page 30.

• 27:55Speaker 01

  Oh, I see where we are here, yeah.

• 27:57Pablo Torre?

  So we're in March of 2022, Henry, here on page 30. And Mr. Sandberg texted the following to the business agent, who, at Ms. Zucker's suggestion, had worked on the Leonard/Aspiration endorsement agreement.

• 28:11Speaker 01

  "If the forum agreement isn't fixed, I will tear up the Clippers' contract. We will do nothing with Kawhi, and we will go into litigation. Should I call Dennis and Kawhi and tell them the deal is off because we got [bleeped]? If the agreement isn't signed tomorrow, that's happening next. And I swear to God, I'll be totally honest with Dennis and Kawhi about why we aren't doing a deal with them."

• 28:31Pablo Torre?

  End quote. Later in the text chain, though, Joe Sandberg makes clear that he had communicated this message, additionally, to Clippers' executive personnel. Not just the agent that they mutually shared, which was quite convenient for purposes of information sharing, but he goes on.

• 28:47Speaker 01

  "I told Scott Sandberg they'll need to break the deal with Kawhi and explain why, which is that we got [bleeped] by the Clippers. Scott asked me not to do that. But if this isn't signed by tomorrow, there will be no choice but to do that. Kawhi deal is not happening without this forum deal. Spoke again just now with Alex, that's Alex Swinberg, then Clippers' general counsel, and Eric Chan, who's the CFO. And they have no solution. If this isn't fixed, we are burning this whole relationship to the ground. Do you understand how serious this is? This is the ballgame. If this isn't fixed, the Clippers, Ballmer, Sandberg/Aspiration relationship is being burned to the ground, and so is the Clippers/Kawhi relationship. Zero chance there was a Kawhi deal if this isn't fixed. You know that, right?"

• 29:30Pablo Torre?

  End quote. Wachtell goes on to say, right after, "Internal communications among Clippers executives confirmed that they were aware of the linkage between the forum agreement, this is the LA Forum, this is Murphy's Bowl LLC,"

• 29:43Speaker 01

  Another thing that's not in the document.

• 29:45Pablo Torre?

  "The LLC Steve Ballmer personally started to mask his identity, according to the District Attorney's Office in LA, when he acquired all of the land needed for Intuit Dome and the LA Forum was part of that deal. I digress. Clippers executives confirmed that they were aware of the linkage between the forum agreement and the Leonard/Aspiration endorsement agreement, being asserted by Aspiration." And then it goes on to say, "In a March 30, 2022 message sent to Brant Vaughn, then chief investment officer of Mr. Ballmer's personal business office, who has come up in our series before, Mr. Chan, the CFO, stated, Henry, quote,

• 30:19Speaker 01

  "Sandberg's last comment was, if we don't sign this deal, he will sue Steve, the Clippers, and burn everything down. But let's chat when you can. He will also call Kawhi and tell them how the Clippers screwed everything."

• 30:29Pablo Torre?

  That is the CFO to Steve Ballmer's chief investment officer, personally. It goes on. And in a March 31, 2022 email exchange between these same parties, Mr. Chan stated,

• 30:42Speaker 01

  "Steve knows that when this deal blows up, Joe is calling Kawhi and telling him his $12 million deal is no longer because of Clippers' management, right? I think so, but just double-checking."

• 30:54Pablo Torre?

  Me too. I am just double-checking. So why do I bring this up now? After you mentioned Dennis Wong? That was March 30, 2022. "Most generously, the Clippers are learning that they have partnered with a guy who is going to exhibit scammer-like behaviors. Remember, Ballmer puts in the $50 million personally in 2021. Aspiration has a $300 million jersey patch sponsor, founding sponsor, deal with the Clippers in 2021, right?"

• 31:27Pablo Torre?

  March of 2022, this all happens. Kawhi signs his contract with Aspiration, which we published in episode one in April of 2022. They go forward with that contract days later. And guess what happens? As the months proceed, and Aspiration enters default, is being probed by the SEC and FINRA as it's firing its employees left and right, all of which my two sources put on tape under voice modulation. Dennis Wong says, "I will be the only outside investor to donate $1.99 million nine days before Kawhi Leonard gets paid $1.75

• 32:11Pablo Torre?

  by this broke-ass company that is being probed by the SEC and FINRA is in default. And I know these things because it's disclosed in the purchase agreement, which we published on the show with his signature on it. He knew it. And he knew the background of this because he was the limited partner of the Clippers. According to our reporting, he knew this.

• 32:32Speaker 01

  Right.

• 32:33Pablo Torre?

  And then, Henry, in March of '23, while you know this is how Joe Sandberg operates, what else happens? Steve Ballmer puts in $10 million more dollars with those same disclosures, with the same knowledge that this company is an enormous cluster [BLEEP]. And when they put that in, they don't put it in as if, you know what? This is a good opportunity for a discount. We're going to negotiate a good rate for ourselves because we know all of this. They go in as if this company is exactly as real and exactly as normal as everyone presumed when they were the anchor investors in the headlines on CNBC

• 33:17Pablo Torre?

  back in the fall of '21, when Steve Ballmer became the most famous investor in Aspiration in the first place.

• 33:23Speaker 01

  Right.

• 33:24Pablo Torre?

  Because there's no doubt what this was. And so, by the way, does this seem like evidence that reflects knowledge by Steve Ballmer of a cap surconvention scheme? If you read on, and I credit all of the effort that went in, all the $50 million of billable hours that went into this because I gotta renegotiate with Levittard.

• 33:45Speaker 01

  You didn't get that kind of money for this?

• 33:46Pablo Torre?

  Unfortunately not.

• 33:47Speaker 01

  Weird.

• 33:47Pablo Torre?

  Unfortunately not. However, where this goes now, right? Because the investment stuff, that flow, wasn't even in here. I don't even need that. And so then, at this point in the story, you're saying, "All right, hey, man, but that's a scam company." That was the Clippers' main public defense. But that was a scam company doing scam things. We got scammed. Everyone got scammed. And I say as well, of course, yes, there was a scam, but you trusted the scammer on a different scam. And we know that also because there were three other schemes. And so how do we get to this report? It's 35-page tonnage. One entity that did participate with the NBA is Daktronics, which has lots of NBA clients. They build the Jumbotron's.

• 34:32Pablo Torre?

  They need to rely on the NBA's good graces to let them operate, presumably, in their buildings. And so what we get from them brings to life what we had reported on the show about Daktronics and how this multimillion-dollar hidden thing. It's the parallel version of this, but with this caveat, which I did not fully appreciate as it recurs. This wasn't just a story about paying Kawhi Leonard. This was a story about businesses the Clippers were negotiating with to become partners in the Intuit Dome. And hanging in the balance, Henry, was the actual Jumbotron-Halo board contract itself. You learned this.

• 35:15Pablo Torre?

  A reported $100 million contract that saves Daktronics, according to earlier episodes we did, was contingent.

• 35:23Speaker 01

  They didn't think they would get the deal if they didn't sign up for this. First, a deal with Kawhi, and then a renegotiated deal with Kawhi, right?

• 35:31Pablo Torre?

  And that's how you kind of know what's going on.

• 35:32Speaker 01

  That looked a little bad. Yeah.

• 35:34Pablo Torre?

  We're going to come back for more. I'm going to need you to pay Kawhi more, but we're going to up the amount that we pay you.

• 35:40Speaker 01

  And what does a phrase for it?

• 35:41Pablo Torre?

  Spend back.

• 35:42Speaker 01

  Spend back? Is that what it is? I was like, oh, my God. You know the industry's in a bad position when it has a handy little term for this.

• 35:50Pablo Torre?

  It's like, hey, we're going to spend back the money that you give us. We'll spend it on you.

• 35:56Speaker 01

  Yeah.

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• 38:27Speaker 01

  One thing that really happened here that I'd like you to weigh in on is Ballmer spent most of the year saying that he was scammed by Joe Sandberg. And Cuban took this line, too. Meaning, like, you give your money to a guy like that, who knows what happens to it? Everyone else is innocent. And that was the rationale for a long time. That's Steve Ballmer on ESPN TV talking to Ramona Shelburne. And that's all gone now. They're no longer saying that. Why? Because there were four companies, not one. But to me, like, does that not expose Steve Ballmer as a liar?

• 39:04Pablo Torre?

  I think it's even more effective, actually, on the did he lie question to just cite the report. This is page 26. "Henry, based on the foregoing evidence, investigators find these statements to be inaccurate at best with respect to Mr. Ballmer." End quote. So just to give us the spectrum of best to worst here, inaccurate is the best version. I think you can now imagine what the worst might resemble.

• 39:34Speaker 01

  Let me read this. Our friend John Hollinger. I know the most boring and stupid part of this is this argument about introductions and what does the CBA allow and blah, blah, blah. I don't care about any of that, to be totally honest. I will only say that John Hollinger worked for the Grizzlies for seven years and--

• 39:51Pablo Torre?

  As a C-suite guy.

• 39:53Speaker 01

  He was a VP, yeah. And he wrote recently on The Athletic, "I can't vouch for anyone else's experience, but in seven years with the Memphis Grizzlies, the, quote, 'ordinary' practice happened with me zero times, probably because, as the report notes, it's illegal, and everyone knows this. Teams are periodically reminded about that by the league in case they forgot. There was one time in my tenure that the topic even came up, and it was immediately communicated to the person who asked it, would be blatant cap surconvention that would put us at risk of getting Joe Smithed by the league office."

• 40:23Pablo Torre?

  Yeah. This is what the NBA's position was, it turns out, early. It was, this is a novel interpretation of what the rule is. 2015, you're punished for cap surconvention. You're fined. DeAndre Jordan, Lexus, team sponsor. This is all now a familiar kind of attempt. 2019, of course, is when the Lakers and the Raptors accuse Dennis Robertson of asking for these things that have now been borne out in this report, as well as in my reporting. So when all of this starts happening during the pandemic, it's not just that the rules are obvious to everyone. They are particularly obvious to the people who broke cap surconvention rules in 2015 and were investigated and warned in 2019. And were apparently,

• 41:08Pablo Torre?

  per the NBA's version of events here, were shown what I can only imagine are the equivalent of what we got to click through as like webinars. Is this cap surconvention?

• 41:20Speaker 01

  The effect of those webinars was Gillian Zucker wrote these like easily disprovable emails that were phrased as if they had just-- the firm had asked for an introduction, even though there was nine days of communications with an unnamed business agent. And by the way, let's talk about that for one second. Why not name the business agent?

• 41:37Pablo Torre?

  Yeah.

• 41:38Speaker 01

  What a weird move. Why protect that person?

• 41:40Pablo Torre?

  What Wachtell offers for their explanation is, quote, "certain cooperating individuals and entities requested confidentiality or non-disclosure commitments as a precondition to providing information." Those are decisions that I don't share.

• 41:55Speaker 01

  Yeah.

• 41:56Pablo Torre?

  We will continue to investigate and report who all of these characters are.

• 42:00Speaker 01

  But if you're protecting a source, presumably from retribution from Ballmer, Ballmer knows who that agent is already. That person was hired by Gillian Zucker, right? So to me, it seems to me like, ah, this feels like the league just saying, like, let's not air all of our dirty laundry.

• 42:16Pablo Torre?

  "Let's not air all of our dirty laundry" is a really important way to view this. And it takes us, by the way, to Kawhi.

• 42:23Speaker 01

  That's what I was about to bring up. Yeah. Yeah, so he got $700,000 fine, which feels dissatisfying. Are you dissatisfied by that?

• 42:31Pablo Torre?

  The guy is the, in some ways, we did not have him centered in the story, weirdly. We had, of course, Ballmer and the Clippers centered because of the investment flows and the federal investigation stuff, which we always ranked as like, that seems the most interesting. But Kawhi is the reason why the Clippers were doing all of this. He and his representative Uncle Dennis Robertson and his agent Mitch Frankel and his whole squad, they extracted an unprecedented amount. So $48 million guaranteed by aspiration, 28 in salary, 20 in equity. Plus, according to Wachtell's accounting, with Boingo, with Daktronics,

• 43:15Pablo Torre?

  with Lockton Insurance, he got at least 18 million.

• 43:19Speaker 01

  That's a lot.

• 43:19Pablo Torre?

  66 million off the books before we get to the unacknowledged expenses, right, that were not-

• 43:27Speaker 01

  Specifically called out, as Cap's secretary mentioned, that they gave him all these stuff that they said was worth a lot.

• 43:33Pablo Torre?

  Yeah.

• 43:34Speaker 01

  And I'm wondering, like, did he pay that back?

• 43:36Pablo Torre?

  Well, when I read all of that, again, my brain went right back to the companies. And I was like, wait a minute. So he got fake no-show, and that's, by the way, the other part of this. These are all fake jobs, obviously. We can now say that clearly. Wachtell confirms he did almost nothing except for one autograph signing.

• 43:53Speaker 01

  And he went to one military base.

• 43:54Pablo Torre?

  But maybe he signed some autographs for some memorabilia at some point.

• 43:57Speaker 01

  Yeah.

• 43:58Pablo Torre?

  And in exchange, he got 66.

• 43:59Speaker 01

  What, we're thinking like hour and a half of work?

• 44:01Pablo Torre?

  If that.

• 44:01Speaker 01

  Something like that. That's a great rate.

• 44:03Pablo Torre?

  So you're at $66 million plus the expenses, plus whatever else, because this timeline ends in 2022, right? Rhode Island Football Club, that's January 2024. He makes those LLCs then, ahead of his next extension, a submax extension with the Clippers, right? Point being that what Kawhi got is vast when it comes to precedent for how cap circumvention schemes have revealed themselves to the public. So, yeah, this is a slap on the wrist, just in terms of the financial accounting of it. $700,000 against the 66 that you were pledged via these fake jobs.

• 44:45Pablo Torre?

  And by the way, I should say, where does my attention go when I hear about the fake jobs? They go actually to the fake consulting services that the companies that were the funnels got. It wasn't just fake jobs for Kawhi, it was fake jobs for the literal companies that were giving him the fake jobs. That was how A to B to C tracked. And so anyhow, Kawhi personally, $700,000 fine, no voiding of the contract. And he, according to a statement, is off to Toronto, peace out.

• 45:17Speaker 01

  He's sorry that people in his circle had bad judgment, though.

• 45:20Pablo Torre?

  I gotta find this quote because it's just, I want it on a T-shirt.

• 45:26Pablo Torre?

  Here we go. Quote, "I accept full responsibility for lapses in judgment by people within my inner circle."

• 45:33Speaker 01

  I'm so sorry, I was trying to buy idiots. Yeah.

• 45:35Pablo Torre?

  Notably, to his credit, though, not something that Steve Ballmer has said.

• 45:40Speaker 01

  That's true. But that's not that much credit. I can't give Kawhi like-

• 45:44Speaker 01

  But to me, like, at least, so in the scope of how the NBA constitution works and how the rules work-

• 45:50Pablo Torre?

  Yes, yes.

• 45:50Speaker 01

  Kawhi's supposed to try to get everything he can. And the place it's supposed to stop is what John Hollinger is describing, right?

• 45:56Pablo Torre?

  The people who have to click through the webinars.

• 45:58Speaker 01

  The people who click through the webinars have to honor the webinar or at least pretend to honor the webinar.

• 46:03Pablo Torre?

  Please pretend to honor the webinar. That's the last webinar slide. Will you pretend to honor this webinar?

• 46:09Speaker 01

  You have to get at least three out of five on the multiple choice, you know? Like Kawhi doesn't have that job. Now, did Uncle Dennis and Kawhi engage in very schemey stuff? Did they ask stuff that made everyone uncomfortable? Was this egregious? Yes. Am I worried about a flood of that moving forward because of Kawhi's illicit income? No, because I think players have always wanted money.

• 46:29Pablo Torre?

  Exactly right. You have, in this league, and you cover this all the time on Truehoop, you have these incentives that conflict, but maybe if they're all being investigated for, accounted for, they can balance into something resembling competitive balance.

• 46:47Speaker 01

  That's what we like to watch. Yeah.

• 46:48Pablo Torre?

  Players want money, teams must abide by the rules. Let's throw the ball up.

• 46:55Speaker 01

  Yeah, yeah.

• 46:56Pablo Torre?

  And in this case, Kawhi got what feels like a slap on the wrist because, not merely that philosophical framework that I personally also enjoy,

• 47:08Pablo Torre?

  this is where it becomes very clear why the Wachtell report is not the same thing as reporting, as journalism. This report, in all the ways it's left out stuff, but introduced new things. This report, in all the ways in which it was very careful around Kawhi and issued him a punishment, according to the NBA's discretion, that seems disproportionate to his centrality to the story. What this reflects is the sort of negotiated settlement that might be available to you if you say things like, quote, "I accept full responsibility for lapses in judgment by people within my inner circle."

• 47:50Speaker 01

  Yeah, you got like a 5,000% discount on the fine if you play along in this manner, is what you're saying.

• 47:57Pablo Torre?

  Well, what happens because of this settlement, as we've talked about, is the union, which had previously saber rattled almost as loudly as the Clippers, in ESPN's own reporting, by the way, which is so interesting. The union threatened, we're not, I believe that David Kelly, we quoted him on a previous show. He even said something to the extent of, "We don't think there's a there there" when it comes to what this investigation was finding in terms of the Clippers' liabilities. They identified themselves on the same side as the Clippers. But then, when presented with these findings,

• 48:35Pablo Torre?

  the union, which represents Kawhi, they say, discretion is the better part of valor. Let's settle. Let's accept that. Let's get what we want. And in the process, guess what's off the table? Arbitration.

• 48:50Speaker 01

  Right.

• 48:51Pablo Torre?

  Which was the thing that Steve Ballmer was threatening from the start through all of these media proxies. We're going to go to arbitration on this.

• 48:57Speaker 01

  And this was a confusing part of the story because it turns out you can only go to arbitration for the players' dispute, right? Like Ballmer can't go to arbitration. Is that correct?

• 49:05Pablo Torre?

  Yes, because collective bargaining and the CBA document, 500 pages in all of its glory, indicates that, yes, this must be activated by the player and his union.

• 49:14Speaker 01

  Yeah.

• 49:15Pablo Torre?

  And so once they agree that there were-

• 49:18Speaker 01

  It's a pretty good deal for Kawhi.

• 49:20Pablo Torre?

  I mean, all you gotta do is tell the truth enough.

• 49:24Speaker 01

  Yeah.

• 49:25Pablo Torre?

  And so one question as a result would be, so what did Kawhi really know and what has he done? And I've seen this theory proffered by Shams Charania on ESPN, for instance, saying he didn't know anything about this cap circumvention scheme.

• 49:38Pablo Torre?

  And I just gotta keep on pointing out that, in fact, his signature is on the documents.

• 49:43Speaker 01

  Either Uncle Dennis stole $66 million, in which case he'd probably, Kawhi, be suing him. Or this guy got the money. All of this rule breaking was for the purposes of the money going to one place, and he got it. It's very unusual that people have a secret backroom deal and that the person who gets the proceeds of that isn't in the backroom. Very unusual.

• 50:06Pablo Torre?

  I dare say that one of the things that I really like to do in the course of reporting this story is hold everybody to the standards of being an adult. Steve Ballmer, you're not a little baby with $174 billion. You're a guy overseeing the thing that you care about more than any other in which you've measured the distance between toilets in the building. And here, of course, we have knowledge of your knowledge now. With Kawhi, same standard. You're 35 years old. And I'm not saying that you will not make it past the pearly gates because you did cap circumvention. Let's leave that aside. Let's leave all the real world implications aside.

• 50:48Pablo Torre?

  I just think it's insane for you to be signing documents over and over again and then claim, "I didn't know about this," especially when you were also in meetings alongside your uncle in which you were asking for this. And by the way, in Wachtell's report, they do have this one point that I thought was really interesting, talking about, what did they include? What did they not include? They did include this part. And I want you to quote this, Henry, for me. If you may turn to page 25.

• 51:16Speaker 01

  Over the course of negotiations for the Leonard Aspiration endorsement agreement, the amounts of the cash and equity components were swapped at Mr. Leonard's request. So the final agreement required Aspiration to pay Mr. Leonard $7 million in cash and $5 million equity per year for four years, a total of $48 million.

• 51:33Pablo Torre?

  Yes. So what is this saying? Originally, according to Wachtell, Aspiration said, "Hey, how about $7 million in equity per year, but $5 million in cash over those four?" And this is saying, "Mr. Leonard requested the opposite. Give me the cash. I want that more."

• 51:51Speaker 01

  It does say Mr. Leonard's request specifically. That sounds like Mr. Leonard.

• 51:55Pablo Torre?

  And you'll notice that Wachtell Lipton is very attentive to minute detail.

• 52:00Speaker 01

  They are.

• 52:01Pablo Torre?

  This is kind of what you get paid the big bucks for. And so they had him on this. And was there more? Let's just say that our inquiry also continues.

• 52:17Pablo Torre?

  Henry Abbott, thank you for hopefully clarifying some things for our audience through your curiosity. And I gotta hit the shower, I think.

• 52:28Speaker 01

  I knew it was gonna get weird at the end. I just knew it. Yeah. It was my pleasure. Thank you for having me.

• 52:42Speaker 01

  This has been Pablo Torre Finds Out, a Meadowlark Media production.

• 52:48Speaker 01

  And I'll talk to you next time.

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