Introduction

Elite athletes can be franchise-changing, but when off-court demands swing into the extraordinary, GCs must tread carefully. The Kawhi Leonard saga, marked by no-show deals, ownership stakes, and endorsements with minimal obligations, offers a vital case study. Striking a balance between acquiring talent and safeguarding integrity, compliance, and long-term reputation is critical.

In many organizations, General Counsel may not have a direct seat at the table when player contracts are negotiated as that role often belongs to the General Manager, President of Operations, or another senior executive depending on the team’s management structure. However, the GC should still be clued in, especially when unconventional or high-risk demands surface. Even if legal is not directly negotiating the deal, compliance with league rules and corporate governance requirements remains a legal function.

When things go wrong, the fallout isn’t limited to sport operations, it becomes an organizational crisis, with potential financial penalties, sanctions, and reputational damage. These risks can be mitigated by ensuring that all relevant stakeholders, including the GC, are informed and involved early in the process. This article serves as a brief primer for GCs, Associate GCs, and other Compliance and Risk Management components to a sports organization/team of issues that may arise in contract negotiations.

Know Where the Line Is…and Don’t Cross It

Key Insight: Kawhi Leonard’s camp (via his uncle, Dennis Robertson) reportedly requested a partial ownership stake in the Toronto Maple Leafs and other MLSE-affiliated companies, plus $10 million per year in “no-show” sponsorship income, essentially endorsements without any promotional or appearance obligations[1].

Implications:

• Ownership requests tied to team parent companies may exceed what leagues and corporate governance allow.

  
  

• 'No-show' income, even outside standard contracts, may trigger legal and ethical scrutiny from league bodies.

  
  

Action Steps for GCs and Associate CGCs:

• Maintain an up-to-date understanding of league rules governing permissible compensation and benefits.

  
  

• Establish internal policies for evaluating off-court offers, ensuring full transparency and compliance.

  
  

Don’t Undermine Promotional Obligations

Key Insight: Leonard's camp reportedly stated, “We don’t want to do anything,” rejecting promotional activity while expecting substantial compensation.

Implications:

• Offers structured to require no effort from the talent may look suspiciously like cap circumvention.

  
  

• Such agreements risk league action, as seen with this year’s NBA investigation into a $28 million “no-show” deal with Aspiration.

Action Steps:

• Any endorsement or sponsorship compensation must be tied to verifiable deliverables i.e., appearances, promotional content, etc.

  
  

• Ensure agreements include enforceable performance clauses with measured deliverables.

  
  

Evaluate Requests Through a Governance Lens

Key Insight: Some of Leonard's demands mirrored what he later allegedly received via Aspiration, raising eyebrows about patterns across negotiations.

Implications:

• Recurring patterns of high-level off-court requests suggest possible strategies to evade compensation limits, albeit informally.

  
  

• Failing to scrutinize such demands may expose the organization to regulatory risk.

Action Steps:

• Consult procurement, compliance, and legal teams before entertaining unconventional proposals.

  
  

• Insist on documented rationales and compliance reviews before entering unusual agreement structures.

  
  

Leverage Firmness as a Negotiation Tool

Key Insight: The Raptors ultimately declined the ownership and no-show sponsorship proposals, while the Clippers opted for a different path and, consequently, now face an investigation.

Implications:

• A principled approach can protect both reputation and financial fairness.

  
  

• Some teams may capitulate and risk long-term consequences.

Action Steps:

• Set clear limits in advance: e.g., “No ownership requests; endorsements must require deliverables.”

  
  

• Consider conditional offers: e.g., a performance bonus only if off-court obligations are fully met.

  
  

Build a Compliance-First Framework

Components to Include:

• Strict Internal Approval Protocols: Ensure non-standard proposals pass legal, compliance, and leadership review

  
  

• Deliverable-Based Agreements: Define specific, verifiable expectations tied to compensation

  
  

• Audit and Reporting Mechanisms – Highlight off-field agreements in regular oversight reports

  
  

• Education & Training: Keep front-office personnel and agents informed about permissible compensation types

  
  

Goal: Mitigate risk while still offering attractive packages; favor transparency and enforceability.

Communication Is Key

Best Practices:

• Tactfully push back on “no-show” proposals: “We’re happy to connect you with sponsors provided there’s a clear agreement for promotional activity.”

  
  

• Use negotiation as an opportunity to set tone: "We value your talent; we just need mutual accountability."

  
  

Monitor the Broader Landscape

Why It Matters:

• The Kawhi-Aspiration investigation remains active, with possible penalties including fines or pick forfeitures.

  
  

• Historical precedent (e.g. Timberwolves–Joe Smith case) highlights long-term risks of hidden agreements.

  
  

Action Steps:

• Stay informed on ongoing league rulings and investigations.

  
  

• Adapt internal policies promptly when enforcement thresholds shift.

Conclusion: Win Without Losing

In elite athlete negotiations, structure matters as much as star power. By embedding compliance, transparency, and enforceability into every deal, GCs can help their organizations secure top-tier talent without sacrificing integrity or exposing themselves to avoidable risk.

Stephon Burton, aka “Your Favorite Creator’s Favorite Lawyer,” is a DC and PA licensed attorney with Sneakers & Streetwear Legal Services, a Business and Intellectual Property law firm focusing on Fashion, Sports, and Entertainment. He can be contacted via email at [email protected], or on LinkedIn and X (formerly Twitter).

[1] For further reading, see: Doug Smith, 'Inside Kawhi Leonard’s bizarre list of secret demands from Raptors and how they line up with Clippers scandal,' Toronto Star, September 9, 2025. Available at: https://www.thestar.com/sports/raptors/inside-kawhi-leonard-s-bizarre-list-of-secret-demands-from-raptors-and-how-they-line/article_9f1b0398-0ebd-4193-bc06-798efda95023.html (note: article is behind a paywall; a subscription is required to access the full text).