Details Might Spare The L.A. Clippers In Kawhi Leonard Circumvention Saga

The Los Angeles Clippers found themselves in hot water Wednesday when investigative journalist Pablo Torre dropped a bombshell of a report accusing them of potential salary-cap circumvention with star forward Kawhi Leonard.

Torre detailed how Clippers governor Steve Ballmer invested $50 million into Aspiration, a now-bankrupt environmental company, only for Aspiration to turn around and give Leonard a $28 million “no-show” endorsement deal through an LLC that he managed.

“We went through a litany of really, really top-tier name contracts. And then, ‘Oh, by the way, we also have a marketing deal with Kawhi Leonard, like a $28 million organic marketing sponsorship deal with Kawhi,'” a former employee from Aspiration’s finance department told Torre. “And if I had any questions about it, essentially don’t, because it was to ‘circumvent the salary cap. LOL.’ There was lots of LOL when things were shared.”

NBA spokesman Mike Bass told ESPN Wednesday that the league was “aware of this morning’s media report regarding the LA Clippers and [is]

commencing an investigation.” The Clippers also issued a statement denying that they or Ballmer circumvented the salary cap by funneling extra money to Leonard through this sponsorship deal.

If the NBA determines Torre’s reporting is accurate, it could spell major trouble for the Clippers. However, the devil may be in the details regarding the exact type of punishment that they might face.

NBA’s Penalties For Salary-Cap Circumvention

The NBA’s collective bargaining agreement is crystal-clear when it comes to salary-cap circumvention. In essence, teams are not allowed to pay players with additional side agreements beyond what’s contained in their contract.

The CBA spells out two specific types of circumvention, which could be what saves the Clippers. (Relatively speaking, anyway.)

The first type is when a team enters “into an agreement or understanding with any sponsor or business partner or third party under which such sponsor, business partner, or third party pays or agrees to pay compensation for basketball services.” While Aspiration wasn’t directly paying Leonard to play basketball, Torre revealed that the endorsement deal could have been terminated if Leonard was no longer with the Clippers.

The other type of circumvention prohibits any team or “team affiliate” from reaching an agreement “involving compensation or consideration of any kind or anything else of value.” The CBA defines a team affiliate as “any individual or entity who or which holds an ownership interest in a team” or any entity which a team owner “holds (directly or indirectly) more than 5% of its ownership interests, or participates in or influences its management or operations.”

If a team is found guilty of the first type of circumvention, it could face a fine up to $4.5 million, forfeit one first-round pick and have the player’s contract voided. If it’s found guilty of the second type of circumvention, the NBA commissioner can issue a fine up to $7.5 million, void the player’s contract and “direct the forfeiture of draft picks” (plural, with no specific number mentioned).

That begs the question: If the Clippers did commit circumvention with Leonard, which version would the NBA hold them accountable for?

Was Aspiration A ‘Team Affiliate’?

As part of its investigation into these allegations, the NBA will need to determine the extent of Ballmer’s involvement in Aspiration.

Torre sorted through publicly available bankruptcy filings and found that Ballmer made a $50 million investment in Aspiration via his personal LLC in September 2021. Two weeks later, the Clippers announced a $300 million sponsorship deal with the company. In November of that year, Leonard registered his own LLC, KL2 Aspire, and his endorsement deal went into effect in April 2022.

If the NBA determines that Aspiration was a team affiliate given Ballmer’s personal investment in the company and the sponsorship deal they later inked with the Clippers, that would open the door to more severe punishments for circumvention.

In perhaps the most infamous circumvention case, then-NBA Commissioner David Stern stripped the Minnesota Timberwolves of five future-first round picks for an under-the-table agreement with Joe Smith about a future contract. He also voided Smith’s series of one-year contracts with the Timberwolves, which caused them to lose his Bird rights. Smith wound up signing with the Detroit Pistons instead, leaving the T-Wolves empty-handed.

The Clippers already owe their fully unprotected 2026 and 2028 first-round picks to the Oklahoma City Thunder and Philadelphia 76ers, respectively, so the NBA likely would leave those alone when doling out its punishment. The Thunder also have the right to swap 2027 first-round picks with the Clippers, as do the Sixers in 2029 so long as the Clippers’ pick doesn’t land within the top three selections. However, the Clippers have full control over their first-round picks from 2030 onward.

The Clippers had already been structuring their contracts to end simultaneously after the 2026-27 season at the latest, leaving them with a largely blank slate in 2027. But if the league office voids Leonard’s contract, that could create a chain reaction that accelerates their fresh start. James Harden has a $42.3 million player option for the 2026-27 season which he might be less inclined to pick up if he no longer has a co-star running mate.

Given the severity of these allegations, one Western Conference general manager predicted to Chris Mannix of Sports Illustrated that the NBA’s punishment will be “worse than what happened in Minnesota with Joe Smith” if its investigation confirms Torre’s reporting. Mannix added that “NBA officials are furious about these allegations.”

Torre’s reporting has set the stage for a blockbuster showdown between Silver and Ballmer. Other front offices and team governors will be closely watching how this plays out, as it could set a precedent either way moving forward.

If the NBA concludes the Clippers did circumvent the cap but strips them of only one first-round pick, that might not be enough to dissuade other teams from following suit. But if the league strips the Clippers of multiple first-rounders and/or voids Leonard’s contract, that would send a strong message to the rest of the league.

Whether Aspiration counts as a “team affiliate” may determine the scope of the pain that the NBA can inflict upon Ballmer and the Clippers if their investigation confirms Torre’s bombshell report.

Unless otherwise noted, all stats via NBA.com, PBPStats, Cleaning the Glass or Basketball Reference. All salary information via Spotrac and salary-cap information via RealGM. All odds via FanDuel Sportsbook.

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