FBI Arrests NBA Players, Coaches in Sports Gambling Scheme

Summary

Bloomberg Business of Sports

Episode: FBI Arrests NBA Players, Coaches in Sports Gambling Scheme

Date: October 24, 2025

Hosts: Michael Barr, Vanessa Perdomo, Damian Sassauer
Guests: Miles Miller (Bloomberg Senior Reporter), Ira Budway (Bloomberg Global Sports Business Reporter), Danny Berger (Bloomberg TV Host)

Episode Overview

This episode dives into breaking news of a massive illegal sports gambling ring involving NBA players and coaches, the NBA’s apparent investigative failings, implications for league integrity, and the links to organized crime. The show also examines the Clippers' salary cap controversy with Kawhi Leonard, and closes with a segment on the business strategy behind Carlyle’s high-profile sponsorship of the Oracle Red Bull F1 racing team.

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Key Segments & Discussion Points

1. Major Illegal NBA Gambling Bust

[02:35 – 13:43]

• Over 30 people across 11 states arrested in connection with a large-scale illegal gambling scheme.
• Included both current & former NBA players/coaches; Miami Heat guard Terry Rozier and Portland’s head coach Chauncey Billups among most prominent names.
• Two intertwined schemes:
  1. Using inside, non-public NBA info (e.g., injuries, sitting out games) to place profitable bets.
  2. Running rigged underground poker games using advanced technology tied to organized crime families.

Notable Quotes:

• “This is a case that is stunning and should shake NBA fans.” – Michael Barr [04:17]
• “This is a criminal indictment that charges that NBA players, current and retired, were involved in two separate schemes.” – Miles Miller [04:34]
• “You wouldn’t say throwing a game, but removing yourself from a game early so that another party is able to make money.” – Miles Miller [04:38]
• “How the NBA was not able to find this is beyond me.” – Miles Miller on NBA’s failed internal probes [06:41]

Insights:

• Federal probes began in 2019, culminating in the coordinated nationwide arrests.
• NBA’s internal investigations failed to catch wrongdoing, even when external betting monitoring flagged suspicious activity.
• FBI and organized crime agencies uncovered connections with multiple New York mafia families.
• The probe is ongoing; more revelations expected, possibly affecting other leagues.

Memorable Moment:

• Joseph Nosella, U.S. attorney: “...The non public information included when specific players would be sitting out future games or when they would pull themselves out early for purported injuries or illnesses.” [03:35]
• “The Waterfront Commission is...really focused on the mob. They’re involved in this investigation into NBA players who are doing bets...taking themselves out of games...Can throw a game. That should not be overlooked.” – Miles Miller [09:12]

Underground Poker & Organized Crime Crossovers

[10:21 – 13:43]

• Mafia used X-ray machines and hidden cameras to read cards in illicit poker clubs.
• Damon Jones (former NBA player) named as the direct connector between NBA insiders and organized crime for both schemes.
• NBA players used both to attract high rollers and enforce collection of gambling debts.

Notable Quote:

• “You’re playing on an X-ray machine and you could see what cards were being dealt...Organized crime...is still alive and well in New York.” – Miles Miller [10:44]

---

2. Discussion: NBA’s Investigation Approach & Implications

[06:41, 07:34, 08:55, 09:12]

• NBA’s investigative processes called into question; failed to detect or publicize misconduct, despite third-party findings and external red flags.
• Broader question posed: Should all league internal investigations be scrutinized, in light of failures to act in past cases (e.g., Clippers’ salary cap investigation)?

Notable Quotes:

• “If the NBA is led to do their own investigations into this and it leads to nothing, and then you’ve got all of these feds standing up there and saying, we found something...There is much more to this.” – Miles Miller [07:52]

---

3. Clippers, Kawhi Leonard, and NBA Salary Cap Violations

[15:43 – 28:05]

• NBA investigating potential salary cap circumvention by the LA Clippers in connection with a side endorsement deal for Kawhi Leonard.
• Focus on owner Steve Ballmer’s involvement, the possible use of outside sponsorships as “off-books” player payments, and the precedent set by previous NBA enforcement (Timberwolves/Joe Smith, Donald Sterling).

Key Discussion Points:

• Adam Silver in a precarious position: must investigate/disciple owner, but also works for the owners collective.
• Allegations center around $28M deal between Leonard and Aspiration, a failed fintech company linked to Ballmer.
• Potential punishments include lost draft picks, fines, voided contracts, or—less likely—contract voiding for players.

Notable Quotes:

• “The league has recently launched an investigation...over allegations that they have circumvented or tried to circumvent the salary cap. And that is a big deal in, in the NBA. It’s kind of as, as Commissioner Silver once called it, a cardinal sin.” – Ira Budway [16:22]
• “You could look at the salary cap as a nuisance. He really wants the Clippers to win. He can only spend $155 million...that is why the NBA has salary cap circumvention rules.” – Ira Budway on Ballmer [22:44]
• “The mere appearance of impropriety wouldn’t be enough here.” – Ira Budway [27:17]

Memorable Segments:

• Historical context comparing the current investigation with 1999’s Joe Smith/T’Wolves case [18:45–19:32].
• Discussion about what would constitute evidence of wrongdoing and the complexity of punishing star players versus owners [23:31 – 25:42].

---

4. Feature: The Business Behind Carlisle x Oracle Red Bull Racing’s F1 Partnership

[30:39 – 42:47]

• Carlisle becomes official investment management partner of Oracle Red Bull Racing—a groundbreaking sponsorship between global private equity and F1.
• Exclusive clip of Danny Berger’s interview with Harvey Schwartz (Carlisle CEO) and Laurent Mekies (Oracle Red Bull Team Principal):
  • Both emphasize “performance obsession,” global reach, and the strategic evolution of sports sponsorship as an avenue to new client bases.
  • PE firms shifting from “exclusive club” mentality to public-facing brand recognition, seeking high-net worth individuals and broader audiences through sports tie-ins.

Notable Quotes:

• “Everything about Oracle Red Bull Racing is about performance, execution, excellence. That part was very easy to see and very easy to relate to as a firm.” – Harvey Schwartz [32:50]
• “It felt like a very, very nice little connection.” – Laurent Mekies [33:22]
• “This is literally the opposite. Right? Like, they’re throwing money at it. And it’s a very different Carlyle and a different industry in general ... Now something has changed. They want to sell it [to high-net worths], not just have it bought by institutions.” – Danny Berger [35:53]

Business Context:

• F1’s surging U.S. popularity post-Netflix’s “Drive to Survive” creates fertile ground for global financial branding.
• Oracle pays $60M+ a year for Red Bull sponsorship; F1’s Apple TV deal further demonstrates skyrocketing media values.
• PE firms (Blue Owl, Apollo) increasingly appear as sponsors. Private capital is branding itself as “friendly, sporty”—aiming at a younger, more diverse, and global audience.

Memorable Moments:

• Playful banter about generational shifts in F1 fandom and rapid sports-business transformation [41:01, 41:37]
• “...I myself am a huge F1 fan. I watch every single race, and I am a woman in my 30s...I am maybe not what you typically picture...but I am increasingly becoming what the F1 fan looks like after the success of Drive to Survive.” – Danny Berger [39:36]

---

Timestamps for Important Segments

• NBA Gambling Arrests, Details, and Impact: [02:35 – 13:43]
• NBA Salary Cap Controversy & Clippers: [15:43 – 28:05]
• F1 Business Feature: Carlisle & Oracle Red Bull: [30:39 – 42:47]

---

Conclusion

This episode delivers a gripping look at how illicit gambling, lax oversight, and organized crime threaten league integrity—and how business and branding strategies in global sports are being transformed by the entry of private capital. The team’s engaging, informed tone blends breaking news urgency with in-depth business perspective, and the guest segments (especially Miles Miller and Danny Berger) provide invaluable context and storytelling for sports fans and industry watchers alike.

---

Transcript

[Michael Barr]

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[Vanessa Perdomo]

Bloomberg Business of Sports From Bloomberg Radio.

[Michael Barr]

This is the Bloomberg Business of Sports where we explore the big money issues in the world of sports. I'm Michael Barr.

[Damian Sassauer]

I'm Damian Sass.

[Vanessa Perdomo]

And I'm Vanessa Perdomo.

[Michael Barr]

Coming up on the show, we Talk at Little F1. Our colleague Danny Berger from Bloomberg Television got a chance to sit down with Carlisle CEO Harvey Schwartz and Oracle Red Bull Racing Team principal Laurent Mekies about their new partnership and the Oracle Red Bull Racing team's recent success.

[Damian Sassauer]

We'll hear a portion of Danny's conversation with Swartz and Mekies from the sidelines of the Formula One Grand Prix in Austin, Texas.

[Michael Barr]

All that and more is on the way on the Bloomberg Business of sports. But we've got news this week of a major illegal sports betting scheme going on in the NBA.

[Vanessa Perdomo]

That's right, Michael. More than 30 people across 11 states were arrested in connection to a sprawling gambling scheme that involved current and former NBA players and coaches.

[Damian Sassauer]

That's right, Vanessa. Miami Heat guard Terry Rosier and Portland Trailblazer head coach Chauncey Billups were among those arrested as part of two separate criminal gambling schemes.

[Michael Barr]

Now, according to the allegations, one scheme involved using non public information about players and teams to make bets, and the other involved a nationwide scheme that allegedly used special technology to rig poker games.

[Vanessa Perdomo]

Both of these schemes went far and beyond the NBA and involved organized crime families.

[Michael Barr]

On Thursday, FBI Director Cash Patel held a press conference announcing the bust alongside several federal officials, including interim U.S. attorney for the Eastern District of New York Joseph Nosella, who detailed the schemes.

[Miles Miller]

Between December 2022 and March 2024, these defendants perpetrated a screen a sch to defraud by betting on inside non public information about NBA athletes and teams. The non public information included when specific players would be sitting out future games or when they would pull themselves out early for purported injuries or illnesses.

[Michael Barr]

That is U.S. attorney Joseph Nosella in an FBI presser on the massive illegal gambling scheme of allegations involving both former and current NBA players.

[Vanessa Perdomo]

For more on what we know about the scheme, we welcome Bloomberg Senior reporter Miles Miller.

[Michael Barr]

Miles Miller, welcome to the Bloomberg Business of sports. I wish it was on a happier note, but this is very serious. And you know it's serious when the House Minority Leader Hakeem Jeffries says that this is a case that is stunning and should shake NBA fans. Tell us about it.

[Miles Miller]

Yeah. So this is a criminal indictment that charges that NBA players, current and retired, were involved in two separate schemes. You've got the one scheme that involves NBA players being involved in sports betting. And basically you wouldn't say throwing a game, but removing yourself from a game early so that another party is able to make money off of that. In this instance, we're told by Brooklyn prosecutors that the Miami Heat guard Terry Rozier was one of the people who was responsible for this. And it goes back to a game he played when he was on his.

[Michael Barr]

Former team back in 2023.

[Miles Miller]

Exactly. And he went out saying that his ankle was hurting, his foot was hurting. But prosecutors say in this case, the truth of the matter was that, you know, he knew someone was placing a bet that would go a certain way and the only way to facilitate that happening would be for him to leave the game. You may be thinking, why are federal prosecutors in Brooklyn interested in this? And you know, the reason is this goes back to 2023. We're going back to the case involving Johnte Porter. Now. The reason why he is so central to this case is because he had said that he had a gambling addiction and that was the reason why he had gotten involved in some of these illegal sports betting schemes. And then what happens, you know, you know, a good thing is going on, so you bring your friends into it. And that is what prosecutors are alleging. The reason why these NBA players were involved was because, you know, they have a central link in, in one NBA player.

[Vanessa Perdomo]

It's really, it's really unbelievable, all of the moving parts to this story. And like you had mentioned, this incident that happened with Terry Rozier in 2023. He was under investigation at the time in 2023. And the NBA found that there was what their conclusion was nothing illicit had happened at the time. But now it comes back around. When you found out this new information, was there any indication that it was this big? And there were so many moving parts to this.

[Miles Miller]

Yeah, you should have seen, I mean, you see the, the, I mean, if you saw the press conference, you saw how many people were involved in the case. Right. This is a wide ranging case that started in 2019. So they've been working on this case for quite some time. To your question about this, it boggles the mind that the, that the NBA says that they closed their investigation and they found no wrongdoing. When you see very clearly the wrongdoing that was found by federal prosecutors here. The one thing that's important to note is that federal prosecutors have said that the NBA is cooperating in this case. But how is it that you hire an external law firm and you have folks look into this? I mean, they had a, an end up. There was an independent firm that looks into sports betting irregularities and found the bet and found the specific amount of money tied to it. So how the NBA was able, was not able to find this is beyond me.

[Vanessa Perdomo]

Does that then bring up the conversation of do they now have to look at every investigation that the NBA has taken place of? Now we're talking, we're talking about the Kwai Leonard and Clippers investigation that's going on right now about cap circumvention. Do they then have to look at all of the things the NBA has said that they've investigated and come up with no conclusion.

[Miles Miller]

You know, the U.S. attorney, I think, was. Was very clear this is an ongoing investigation. And I thought what the FBI director said was really interesting, that this is a major scandal and historic when it comes to the NBA. This is not the last we'll hear of this investigation, because it's very clear that if the NBA is led to do their own investigations into this and it leads to nothing, and then you've got all of these feds standing up there and saying, we found something. And it involves, in one instance, the first four of the five crime families in New York, you know, and talking about organized crime, the Mafia in New York. There is much more to this. And it didn't just. It's not just these three players that are named here. They're going to continue doing this investigation. And it is clear that an FBI agent's retiring. You're going to have people retiring from the Eastern District who worked on these cases. They'll probably go join the NBA. They'll probably go join some of these law firms to start looking into these sports books and figuring out just what's happening as it relates to players and how players are using the sportsbooks.

[Damian Sassauer]

Miles, is this only the beginning? Are we just scratching the surface of the impact of sports gambling on major sports? I gotta believe that the NFL, Major League Baseball, they too have had, quote, unquote reports that, you know, maybe this player was taking himself out of games or they were doing some referees, et cetera. You know, Is there more coming?

[Miles Miller]

Oh, there's certainly more coming, and certainly from the Eastern District. Right. I think it was important to note that this happened in Brooklyn because of the prior case. And all it shows me is that it's going to continue to happen. You know, we asked about college basketball and college sports, and they said college sports wasn't involved in this. But that's not to say that this kind of scheme won't happen when it comes to college sports. He said that the sports books are the victims in this case. But it's going to be incumbent on these sports books to figure out who's making these. These wagers and figure out if there's any corruption happening when these wagers are happening. One more thing that's interesting. The Waterfront Commission was involved in this. The Waterfront Commission is one of the oldest law enforcement agencies in the country, really focused on the mob. They're involved in this investigation into NBA players who are doing bets or who are involved in Betsy, where they take themselves out of games or go sick or, you know, can throw a game. That is something that should not be overlooked.

[Michael Barr]

And this is more than just prop bets in the game. I mean, this, the allegations of that are bad enough. This goes now into the underground poker games where you've got X ray machines that they're ledging here have been used to read cards. I mean, and the mafia families made millions off of this, according to what the officials are saying.

[Miles Miller]

Yeah, I've got them in my bag. I should have brought them with me. The court documents here, literally you can see through the table. And they had cameras under the table. So what, that basically you're playing on an X ray machine and you could see what cards were being dealt. They're watching hand signals, they've got surveillance in the room, they've got manipulated card machines. All of this happening on Washington street, down in the west side of Manhattan and on Lexington Avenue not far from where we are. So it's really interesting that organized crime, and I say Italian organized crime, that's what they're calling it, is still alive and well in New York. And how are they able to make their money by running these rigged games? And in some of the cases, you see people saying, hey, listen, what you did was wrong. You took my money and that kind of thing. And these people who are losing tens of millions of dollars, you know, what do they do? It's the first thing they do. They call the FBI and they say, hey, listen, I was taken and here's who did it, and here's how I, how it all came together. And all the text messages are right there, plain as day, showing how the scheme worked.

[Michael Barr]

And Vanessa, during that press conference, they were saying one person got taken for $1.5 million in a poker game. And they were like, hey, wait a minute, what's going on here? And then when you didn't pay, according to the allegations, the crime family, they got tough.

[Vanessa Perdomo]

They, they became the crime family.

[Miles Miller]

Right? Yeah.

[Vanessa Perdomo]

So I. Miles, can you just connect the dots there on how that organized crime and the poker games relate to this NBA investigation?

[Miles Miller]

Right. The easiest way to explain it is that Damon Jones, a former NBA player, is connected in both schemes. He was connected to the scheme that involved, you know, non public information and players going out on injuries or illnesses, pulling themselves from games. And he was involved in the, in the card situation where you could see cards on X ray machines and all of that kind of stuff. He's the link between the NBA and organized crime. In this instance, he's the one who was a connector of those dots. In addition to that, when it comes to the card games, you know, they would use these NBA players to get, you know, high quality folks in. Oh, you've got this NBA player who's going to be, you know, sitting in the game or he's a face card, right? Oh, you know, I'll get to take a picture with him and I'll get to spend time, you know, maybe I'll have a drink with him. And then also trying to use these NBA players to basically enforce when they lose all this money to say, hey, you need to pay these guys back, it's not all right. And if you have a big celebrity telling you to do that, you're going to find any way to do it so that you're not in any more trouble.

[Damian Sassauer]

Our thanks to Bloomberg senior reporter Miles Miller for joining us.

[Michael Barr]

Up next, we stick with the NBA and some controversy surrounding Clippers star Kawhine Leonard. For Damian Sassauer and Vanessa Perdomo, I'm Michael Barr. You are listening to the Bloomberg Business of Sports Bloomberg Radio around the world. The FIFA World Cup 26 is coming to North America next summer. It's the ultimate celebration of sports and culture and an opportunity to elevate your company. Get closer to where business meets the beautiful game with a premium hospitality package. Build partnerships in the best seats and suites. Achieve goals over world class food and beverage. Get closer to wins on and off the pitch. Register interest@hospitality FIFA.com interest in the heat of battle.

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See mint mobile.com this is Bloomberg Business OF Sports From Bloomberg Radio.

[Michael Barr]

This is the Bloomberg Business of Sports Sports where we explore the big money issues in the world of sports. I'm Michael Barr.

[Damian Sassauer]

I'm Damian Sassauer.

[Vanessa Perdomo]

And I'm Vanessa Perdomo.

[Damian Sassauer]

On top of the illegal gambling probe we learned about this week, there's also some controversy brewing in LA with Clippers star Kawhi Leonard.

[Vanessa Perdomo]

The NBA is investigating whether the Clippers were able to work around the league's salary cap to get extra money to Leonard.

[Michael Barr]

Oh, dear. Joining us now to talk about it is Bloomberg News global sports business reporter Ira Budway Iraq. Welcome back to the Bloomberg Business of sports.

[Ira Budway]

Good to be here.

[Michael Barr]

You said in your article NBA commissioner Adam Silver has a Steve Ballmer problem. Explain that.

[Ira Budway]

Well, the league has recently launched an investigation into the, into Ballmer and the Clippers over allegations that they have circumvented or tried to circumvent the salary cap. And that is a big deal in, in the NBA. It's kind of as, as Commissioner Silver once called it, a cardinal sin. And so he's gonna have to get to the bottom of this. But it's a very tricky situation when you're dealing with disciplining owners in any sports league because you work for the owners as a commissioner. So he's in, he's in a bit of a pickle.

[Vanessa Perdomo]

I mean, it's interesting because he came into the league, Adam Silver, I mean, when he came into the league and was, you know, started as commissioner, he essentially came in and based fired one of the owners, banned them for life, banned Donald Sterling for life, which is the team that Steve Ballmer then buys. But he did that pretty swiftly and without any issues. Right. Kind of seemed like everyone was on his side. Donald Sterling was in the wrong. But this is very different. Do you think this is probably the hardest thing he's had to deal with and trying to make a decision on this. If he is found guilty, I mean.

[Ira Budway]

It is very different. And we should be clear that Sterling got in trouble for making racist comments that were recorded, which is a lot different than trying to get around the salary cap. But I think, you know, it's interesting going back to that moment 11 years ago when Silver banned Sterling for life, which led to Sterling having to sell the Clippers and the buyer was Steve Ballmer. That was interesting because at the time, even though nobody thought Sterling was in the right or really should own this team, it was a question whether Silver had the authority to force him to sell. And he was just three months into his tenure and he figured out a way to make it happen. And it was pretty bold. First he did the lifetime ban, and then they switched the ownership to Sterling's wife. And then that led to the sale. So he managed to force a sale without sort of forcing this question in front of the owners of whether that was allowed. Now he's got a thing where Ballmer is the wealthiest owner in the league and he's been very active, he's a huge fan, he's front row, he's always loud, he's very well known, former CEO of Microsoft. He just spent $2 billion of his own money to build a new arena for the Clippers, the Intuit Dome that's supposed to host the All Star Game in February. So it's a very tricky thing because salary cap circumvention is a big deal because if, if teams are doing it, then your salary cap kind of doesn't really exist.

[Damian Sassauer]

Well, Ira, we're talking about the integrity of the league here, right? And so, you know, you're bringing us back to the sterling still in 2014. I want to bring you back to 1999. I want to bring you back to the Joe Smith fiasco because that, to my knowledge, is the last time we had salary capsule convention. And the penalty, if I remember, on the Timberwolves was absolutely massive. I mean, I think they took four or five first rounders. If they do that in today's day and age, which I'm not suggesting they would, but there is precedent there. I mean, that could just pummel the team for a decade as the David Stern era. Yeah. So, I mean, like. So is that, is that really what's at risk here? I mean, that is a mass. I mean, this Clippers are one of the most, forgive me if I'm wrong, I don't know the number, but valuable franchises in the NBA, right. I mean, top 10 for sure. But so, I mean, what would that do to that? I mean, it's got to be not a good thing.

[Ira Budway]

Yeah, I mean, Silver has Broad Liberty, Hill Broad Liberty to penalize the Clippers. And there is a set of penalties outlined in the bylaws in the collective bargaining agreement that include stripping draft picks and Joe Smith. You're right, they took away five first rounders. Timberwolves got some of those back later, but yeah, they can do a lot. And also he has. Silver has Liberty under the NBA rules to punish owners just for doing things that act contrary to the interests of the league. So it really depends what this investigation discovers. So right now, they've got Wachtel looking into it. If they come back and they show very strong evidence that Ballmer was aware of this, that the Clipper somehow directed this, and this is a side contract or an endorsement contract with Kawhi Leonard that's under question, that if the Clippers were involved, then, yeah, I think the punishment could be pretty severe because you have to disincentivize this behavior. So you could be talking about lost draft picks, you could be talking about millions of dollars in fines, and you could be talking about voided contracts. So there's a lot of ways that they can go. It could really damage the Clippers.

[Damian Sassauer]

So let me ask you this. Back in 1999, did David Stern consult with other owners about that penalty that was. I mean, I don't know the answer. Right. Because my question is Silver works for the 30 NBA teams, not just the Clippers. Right. So there are 29 other owners out there, all of whom might want to see Ballmer get the max penalty, while others might not because it might have an impact on their own franchise valuation. So my question is, do you think that Silver would at least take counsel from some of the other team owners with whom he works for?

[Ira Budway]

Yeah, it's a very tricky question. I think right now he's probably saying, let's let this investigation play out. He needs that to say, we commit. We paid for this independent investigation. We want to see what it says. What is the evidence beyond what's been publicly presented by Pablo Torre in his podcast? And can we corroborate that? And can we figure out what's really going on here? But, yeah, what's interesting is the other owners are also torn, I think, right? Because on the one hand, they are Ballmer's competitors. They are his rivals. They want to beat him. Cap circumvention is a form of cheating. They would be pissed about that, in theory. On the other hand, they are Ballmer's partners. They all share 1/30 of an interest in this league, and they don't necessarily want the league to be damaged. And they also don't want a precedent where the commissioner has a free hand to punish owners because they're an owner, too. Right? And so as his partners in the business, they might like to see this go away with a slap on the wrist. As his rivals on the court, they might like to see the full weight of the law brought down on Ballmer. So that is, I think, exactly the dynamic that Silver's going to have to navigate in this moment.

[Michael Barr]

I had forgotten until you had written it that the NBA salary cap has been in place since 1984. Now, today, it is at $155 million per franchise. Quite frankly, Ira, that's not much in today's league.

[Ira Budway]

I think if you look at how much money some of these owners have, Ballmer estimated net worth $175 billion. For him, you could look at the salary cap as a nuisance. He really wants the Clippers to win. He can only spend $155 million. You can go over that through various exceptions. You can pay the luxury tax and so on, but you're really limited in what you can spend. And that is why the NBA has salary cap circumvention rules, because they know that these incentives are in place that Ballmer and other owners might really want to spend more than they're allowed to win. Right. And so, yeah, that is the trick here is can you enforce your salary cap, which is there for competitive balance and to control costs for the league and for owners?

[Vanessa Perdomo]

All right, I'm curious, like, if this is really what are they looking for? What is harsh evidence here? Can actually find it? Do they want to find it or is this going to be something like we've seen before that makes huge headlines, but nothing really comes of it? Like when the Astros got caught sign stealing and they kind of just skated over it or.

[Ira Budway]

Yeah, I mean, it's really interesting. I do think the league wants to get to the bottom of it. What's at stake here is there's this company, Aspiration, it's now bankrupt. Its leader was brought up on federal charges for fraud in one of its co founders. He's agreed to plead guilty. But this company, Aspiration, that did like Climate Finance, they did a deal with the Clippers to be a partner in the Intuit Dome, and Ballmer invested 50 million in them back in September of 2021. And then after that, Aspiration did a deal with Kawhi Leonard, an endorsement deal for four years, 28 million. What's fishy about that deal is Leonard never really did anything in public to endorse Aspiration. Right. And so it looks like pay to play, potentially.

[Vanessa Perdomo]

And it said he had to stay a Clipper.

[Ira Budway]

Yeah. According to Pablo Torre, who broke the story on his podcast, the contract allows him to not do anything. As long as he's on the Clippers, he gets paid. And so what Wachtel is going to have to figure out here is why did Aspiration do that? That's the central mystery.

[Damian Sassauer]

Wasn't Kawhi Leonard a supermax to begin with?

[Ira Budway]

So he was on a four year, $176 million contract extension with the Clippers, which was an interesting choice. He signed that in 2021. He could have done a shorter deal. He could have to get to a bigger contract sooner. He could have done a bigger deal at that moment. It was sort of a middle path. But yeah. So he. This side deal, if it is in fact a side deal, and that's what. That's what we need to figure out. Is Aspiration doing this on behalf of the Clippers? Is it a way to pay Kawhi off the books? Or were they just doing what looks like a really stupid endorsement deal right on its face or a smart endorsement.

[Damian Sassauer]

Deal from the perspective of Kawhi Leonard?

[Ira Budway]

Right. Kawhi Leonard, yeah. Why not take it? It's $28 million for what looks like a no show kind of arrangement, you know, over four years. But I think that's what you got to solve here. Is there another explanation for why Aspiration is doing this deal? Now, this is a company that did do a lot of fraudulent stuff, including some. Some funny dealings with influencers and other celebrities. So maybe there are other explanations here. It's also possible, and this is just me speculating like that Aspiration wanted to do this for the Clippers without the Clippers knowing it. Right. That they were like, oh, they would love it if we did a deal with Kawhi and we paid him more than he's worth because that would, you know. But the Clippers never asked for any of this. What Ballmer has said is I made the introduction, right? I was an investor in Aspiration. Kawhi Leonard is my player. I put the two together and they went off and made a deal that I didn't know about, that had no control over, and I didn't know the terms. So that's what. That's what we got to sort through.

[Michael Barr]

Now, I should add, first of all that Mr. Ballmer said that, look, I didn't do anything wrong.

[Ira Budway]

Right?

[Michael Barr]

Clippers are saying we didn't do anything wrong.

[Ira Budway]

And Kawhi Leonard saying.

[Michael Barr]

Saying the same thing. I didn't do anything wrong. And even Adam Silver, when it came out in the press conference afterwards, said, look, the burden of proof that something went wrong is on the league.

[Ira Budway]

Yes.

[Michael Barr]

I mean, I don't. Forgive me for using a. It's like a Perry Mason case, you know, it's like, okay, you gotta prove that this actually happened. The bad dealings.

[Ira Budway]

Yeah. So he said basically the mere appearance of impropriety wouldn't be enough here. And so that is really the question. It's kind of like what is the. It's not a legal case in the sense of it's just up to the league enforcing its own rules. So what are the, how much evidence do they need? What do they, what is the burden of proof? Is it beyond a reasonable doubt? Like this is all basically what Silver is going to have to look at, what they come back with and make those choices. You know, it's not a court of law. It's, it's a, it's an NBA commissioner.

[Vanessa Perdomo]

Well, we've been talking a lot about what would happen to Steve Ballmer in that decision. But if this is found to be true, what would happen to Kawhi? Like is there something that would happen to him?

[Ira Budway]

I mean, theoretically they could void his contract. I think, I doubt that would be the outcome here. I think they'd want to punish the franchise and the owner. You know, that's just my guess.

[Vanessa Perdomo]

Our thanks to Ira Budway for joining us. He's Bloomberg News global sports reporter. You can find his reporting on the terminal and [e-mail] coming up we turn.

[Michael Barr]

To F1 and a new big money partnership between Carlisle and the Oracle Red Bull racing team. Damien Sassower and Vanessa Perdomo. I'm Michael Barr. You are listening to the Bloomberg Business of sports Bloomberg Radio. Around the world world.

[Ira Budway]

In the heat.

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[Miles Miller]

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[Damian Sassauer]

IBM.

[Vanessa Perdomo]

This is Bloomberg Business of Sports from Bloomberg Radio.

[Michael Barr]

Thank you. Thank you for joining us on the Bloomberg Business of Sports. We explore the big money issues in the world of sports. I'm Michael Barr.

[Damian Sassauer]

I'm Damian Sassauer.

[Vanessa Perdomo]

And I'm Vanessa Perdomo.

[Michael Barr]

Carlisle recently announced a new partnership with Oracle Red Bull Racing becoming its exclusive investment management partner.

[Damian Sassauer]

It is the first ever partnership between a Formula one racing team and a leading global private markets firm.

[Michael Barr]

And joining us now to talk more about the deal is Danny Berger. Danny, welcome to the Bloomberg Business of Sports.

[Danny Berger]

Thank you so much.

[Michael Barr]

Oh my goodness. Now you had did an interview recently where you talked to Carlisle CEO and you also talked with the Oracle Red Bull racing team principal.

[Ira Budway]

That's right.

[Michael Barr]

Tell us about that.

[Danny Berger]

Well, Carlisle, for an undisclosed amount of money, but probably a very large sum of money, has become a sponsor of Red Bull racing. Typically when you think about the sponsors a lot of tech companies, Oracle, for example, is one of the main sponsors of red bu1 password. A lot of tech companies. Rarely do you get capital coming from financial giants like Carlisle. But Carlisle nonetheless signed this deal. They became a title sponsor of them. So I went down to the F1 to interview both of them and basically ask one, why would you do this? Why would you spend so much money on something incredibly flashy and just generally to ask Red Bull, hey, what's going on with the team? How you thinking about 2026? And and same goes for the Carlisle CEO too.

[Michael Barr]

And Vanessa, Danny did that interview and we have a clip of that. Let's give a listen to it.

[Harvey Schwartz]

The last 30 years, you've seen a remarkable development of private markets. Private markets are really the primary source of capital for many companies. As that capital continues to grow, the market has just evolved to a place where wealth, retail, the breadth of what we do globally is just evolved also. And this is just part of the natural evolution. While it might feel unique now, I Think it's actually not revolutionary at all. It's really just quite evolutionary.

[Danny Berger]

And why move that way With Red Bull specifically, that was pretty easy.

[Harvey Schwartz]

Everything about Oracle Red Bull racing is about performance, execution, excellence. So that part was very easy to see and very easy to relate to. As a firm. The sport, F1 is also global and growing dramatically as we know as our private markets. And so that all aligned. What made this really special was when Laurent and I spent time together, the team spend time together and it was almost like this sort of very, I don't know, uniquely natural affinity where we all just became best friends really quickly and. And so hey, it's got to be fun too. But it is about performance excellence first and foremost.

[Danny Berger]

I was going to say Laurent, given what Harvey is saying, that the finance world in general has been more interested in sport, more interested in F1. Have you been fielding a lot of calls before this partnership from Harvey's peers who wanted to get in like he did.

[Miles Miller]

You know, in reality, no, it's felt, it's felt very natural straight away with Caroline, with Harvey, you know, it's this moment where you realize that the person you are talking with are the best at what they do in the world. And you know, we feel we are quite good at what we do and what we see with our partners is that we go and try to partners with companies that are the best at what they do. And we had a lot more points of connections, we had these performance obsessions. We have this data driven approach in our very different business but. But together with that quest for perfections in everything we are doing, it felt like a very, very nice little connections.

[Danny Berger]

To be fair, Harvey, there have been some outspoken critics about the move for private capital to do sponsorships to get invested in sports. Josh Easterly of 6th street said at a conference a couple of weeks ago it's representative to him that firms are more concentrated on fine tuning their brand than on the returns themselves. What do you say to that criticism?

[Harvey Schwartz]

Criticism? Our business is exactly the way Laurent just described it. It's first and foremost always about performance. Performance drives everything. If you have performance, you have success. Again, you think about everything they do. At Oracle Red Bull Racing, it's all oriented around success. When he references data, we think about data, it's different data. But these are organizations driven around performance excellence. If you don't have performance, you don't have success. In terms of the partnership here, yeah, this is important to be able to reach a global audience. You know, you mentioned sport before. There's a Real desire in the world for people to come together around sport. And this is truly one of the fastest growing sports in the world.

[Damian Sassauer]

That's Bloomberg TV host Danny Berger speaking with Carlisle CEO Harvey Schwartz and Oracle Red Bull Racing's Laurent McKees.

[Vanessa Perdomo]

Danny, I'm curious, in your interview you talked to Carlisle about them being forward facing and how that kind of different for them. And this was a different like opportunity. And we've seen private equity come into sports a lot, but it's a different way, right? This is sponsorship, this isn't investment necessarily equity. So what did you gather from that part of the conversation?

[Danny Berger]

That is just spot on because to your point, usually when we think about private equity in sports, it's that they want to make money out of it. This is literally the opposite. Right? Like they're throwing money at it. And it's a very different Carlyle and a different industry in general because usually you think private capital, it's this exclusive club it's hard to get into. You have the biggest institutions in the world, be it pensions or sovereign wealth funds coming to them to buy their portfolios. Now something has changed. They want to sell it. They don't want it to be a product that's bought, they want it to be a product that's sold. And they're trying to sell, okay, maybe not everyday people, but everyday people who have lots of money, they're trying to sell it to high net worth individuals. They're hoping that 401ks will open up to private equity too. So all of a sudden they're realizing it's, it's not enough that this sovereign wealth fund in the Middle east knows who we are. We need more everyday people to know who, who we are. So when they're thinking about, okay, I've got extra money, usually I just put that in ETFs. Maybe instead I go to my wealth advisor and try to get into a Carlile fund. So all of a sudden to your point, they're really front facing, they're trying to show a more friendly and maybe more sporty face. And it's not just them doing it. Blue Owl for example, they sponsor tennis players, they sponsor golf players. Apollo also sponsors golf players too. So you seeing this become, start to become a trend in the industry.

[Damian Sassauer]

Well, Danny, let's put some numbers around that. Oracle, who is Red bull's main sponsor, $60 million a year, Vanessa, can you believe that? And they've got Honda, they've got Ford, Visa, and that's just that, just the tip of the surface now, you know, this is the business support, so let's talk about it, right? The F1 just did a deal with Apple TV where they got their media rights up to $140 million a year over five years. So clearly there's something there, right? I mean. I mean, that's a huge increase. It's a huge bump, bump up. But, you know, so Carlisle, David Rubenstein, I mean, these. They know how to, you know, get around a deal table, and they know what a good investment looks like. So they must see something here.

[Danny Berger]

No, I think it's kind of key that they did this deal after Christian Horner left. Christian Horner left not because of controversy, but he left in a fog of controversy with accusations of sexual misconduct. And it'd be hard to imagine a scenario where. Where even though that was investigated by the team and nothing came out of it, that you have a private capital giant like Carlyle be comfortable with investing in the team. And in Laura Mackey's, you have a team principal. I was there. I saw the two interact. You kind of got the feeling they were almost friends, even though they were so different. I mean, Harvey Schwartz cutting his teeth on Wall street, at one point, being floated as the next CEO of Goldman Sachs, meanwhile, this French engineering nerd, it's not exactly a combo that you would expect, but the two of them really got along. And they kind of love to say, look, completely different businesses, but we're obsessed with performance, we're obsessed with data. So you have this feeling that Carlyle is being really deliberate in how it puts its brand out there. And they were really deliberate in choosing Red Bull, which I should say, even though they're not leading the pack with F1 right now, they are getting closer with their driver, Max Verstappen, kind of wearing down the gap between them and the McLaren drivers.

[Damian Sassauer]

You just took the words out of my mouth. They are four in the constructors now this year. Right. I mean, behind, you know, obviously McLaren, but Mercedes and Ferrari as well. And Verstappen is now three in the driver's rankings, although that win in Austin obviously ranked them back up. He's now contesting again. I think there's. I think he has enough chance.

[Danny Berger]

Yeah, he does. And obviously it was because of my interview with the team.

[Damian Sassauer]

Of course.

[Danny Berger]

Of course.

[Damian Sassauer]

Right.

[Miles Miller]

Absolutely.

[Damian Sassauer]

Without question. So. So, I mean, so again, you know, there is a lot of value there, I guess, is the point. So Carlisle actually sees that. Michael Barneau.

[Michael Barr]

Yes, you. You are exactly right.

[Vanessa Perdomo]

So when you're thinking about it, and after talking with them. Do you see the link between Formula one and private equity? Do you see the value in this sponsorship?

[Danny Berger]

I think it's interesting because. Okay, so people, when they. I talked to people after this sponsorship and they said, what a weird move from Carlisle to go after F1. They want to reach more people. Isn't F. Aren't F1 fans just the typical billionaire class and people they already have? F1 has changed so much. I myself am a huge F1 fan. I watch every single race, and I am a woman in my 30s. I am maybe not what you typically picture for the F1 fan, but I am increasingly becoming what the F1 fan looks like after the success of Drive to Survive on Netflix, the F1 fans are more female. They are younger. So it's a really interesting type of person that Carlisle is actually capturing here. And I think in that vein, they do see a unique opportunity because of the growing audience. And Damon, you mentioned Apple getting the rights to F1. There you go. A whole new audience too, potentially coming in. It is a growing sport and a growing audience base.

[Damian Sassauer]

Well, Danny, I'll just give it to you right now. Riyadh, Singapore, Abu Dhabi, Dubai. I mean. I mean, the list goes Baku. The list goes on and on. So for Carlisle to penetrate some of these international financial markets. Yeah, I get it. You know, I see the benefit of it for sure now. Let's just see if they can bring it to the track.

[Michael Barr]

Right?

[Damian Sassauer]

Michael Barr.

[Michael Barr]

Oh, my. See, you know what? I remember I'm old, and you reminded me, you said, I'm a lady in my 30s.

[Damian Sassauer]

Well, how do you want to go?

[Harvey Schwartz]

How old?

[Michael Barr]

Someone snowed on my head. I remember when Jackie Stewart. And I know you're going to say, who the hell is that? No, Jackie Stewart, man. One of the greatest racing drivers of all time. That's right. And he had a car that had six wheels on it. He really did. It was like two, four in the front, and then there was the two in the back. That's how far I go. Which brings me to how far has F1 changed since old man Barr got into it?

[Danny Berger]

Well, do you want to talk about the car or the team kits?

[Damian Sassauer]

I mean, did Harvey Schwartz promise us a team kit? Michael Barr could use a nice, nice little team kit to wear today. Office.

[Danny Berger]

I'm sure we could arrange that. They would be so thrilled if you wore a Red Bull hat that said Carlisle on the side. I think they would absolutely love that. Now the sport has changed so much. You could talk about the audience, the money behind it. With this, with other investments in there, with the type of audience, but also the cars themselves, they have changed so much and they change every year. And I think one thing that they've really concentrated on is the safety of the car. They now have these halos around it to make sure if the car rolls over, the driver is safe. Literally every single aspect of this has changed. And I think one of the biggest changes again is the American audience. We had again, Austin, there's Miami, there's Vegas, which is an insane race and is literally the most American thing you could think of because of the spectacle behind it. But yeah, literally every aspect of the sport, it is changing and changing fast.

[Michael Barr]

Danny, you are, you gotta come back. Friend of the show.

[Danny Berger]

Happily.

[Michael Barr]

And you can come back anytime you want.

[Danny Berger]

Michael, again, I mean it. I'm honored. Thank you so much.

[Damian Sassauer]

Come back and help us, Danny, please.

[Michael Barr]

Yes.

[Damian Sassauer]

Save us from Michael.

[Michael Barr]

Yeah.

[Vanessa Perdomo]

Our thanks to Danny Berger for joining us.

[Michael Barr]

And that does it for this edition of the Bloomberg Business of Sports. For Damien Sassour and Vanessa Perdomo, I'm Michael Barr. Tune in again next week for the latest on the stories. Moving big old money in the world of sports.

[Damian Sassauer]

And don't forget to catch our podcast on all of your podcast platforms.

[Michael Barr]

You are listening listening to the Bloomberg Business of Sports from Bloomberg Radio around the world.

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