Possible punishments for Clippers? Questions loom over NBA's investigation of Kawhi Leonard deal
- - Possible punishments for Clippers? Questions loom over NBA's investigation of Kawhi Leonard deal
Tom HaberstrohSeptember 4, 2025 at 10:03 PM
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On Wednesday morning, Pablo Torre dropped a bombshell that was felt all across the NBA.
In an 80-minute episode of Pablo Torre Finds Out, Torre revealed a secret $28 million endorsement deal that Kawhi Leonard inked with a fraudulent green bank called Aspiration back in 2022. It’s a story because Aspiration had close business ties with Clippers owner Steve Ballmer and the Clippers organization. Aspiration made a $330 million sponsorship deal with the Clippers that was supposed to run through 2034, in addition to a reported $50 million investment from Ballmer himself.
But it’s a big story because of the most startling detail of all, according to PTFO’s reporting:
Leonard’s $28 million endorsement deal didn’t seem to actually require him to do any endorsement of any kind. And so Leonard did not do any of the endorsing of said company.
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Was it a no-show job to circumvent the NBA cap?
That’s a question league investigators and team owners — not to mention fans and players — will want answered. Ballmer and the Clippers initially denied any wrongdoing to PTFO in Wednesday’s episode. Later that day, the team released a four-paragraph statement leading with: “Neither the Clippers nor Steve Ballmer circumvented the salary cap.”
Where do we go from here? Here are some questions lingering over the proceedings.
Could the league hand the Clippers the Joe Smith penalty?
Let’s go back to October of 2000. Michael Jordan and Magic Johnson were out of the league, but Kobe Bryant, Shaquille O’Neal and the Los Angeles Lakers were the reigning champs. Momentum was moving in the right direction for the NBA.
But ahead of the 2000-01 season, a scandal rocked the league. Then-commissioner David Stern levied one of the harshest penalties in NBA history, hammering the Minnesota Timberwolves for circumventing the NBA’s salary cap regarding deals with former No. 1 overall pick Joe Smith, who was then a five-year veteran. “What was done here was a fraud of major proportions,” Stern said in 2000, according to the Minnesota Star-Tribune. “There were no fewer than five undisclosed contracts tightly tucked away, in the hope that they would never see the light of day. … The magnitude of this offense was shocking.”
The team was found to have violated league rules by signing forward Smith to multiple successive below-market one-year deals in order to secure his Bird rights, which would give Minnesota the ability to go over the cap to sign the former No. 1 overall pick to a monster contract. According to reporting, Smith and the Timberwolves had agreed to a hush-hush contract worth up to $86 million beginning in 2001-02.
What will the NBA find during its investigation of the Clippers? (AP Photo/Mark J. Terrill) ()
Wink-wink, nod-nod deals were rumored in the past, but there was a paper trail in the Joe Smith case thanks to an agent dispute that went to court. Once the receipts were found, the NBA stepped in.
Stern wasn’t pleased. In the press conference, he repeatedly used the words “fraud” and “deceit” to describe owner Glen Taylor and the Timberwolves’ dealings. Stern’s actions spoke louder. He ordered the Timberwolves to pay a $3.5 million fine; had the franchise forfeit five future first-round picks (two of which were later returned to the Wolves); issued a one-year suspension for then-owner Glen Taylor and top front office executive Kevin McHale; and rescinded Smith’s years accrued as a Timberwolf, thereby nullifying any possible Bird rights. Smith became a free agent and joined the Detroit Pistons for $2.3 million.
Even if commissioner Adam Silver wanted to hand down a similar punishment based on what the league might find during its investigation, he might not have the ability to lower the same guillotine that Stern did. We’ve been down this path before under Silver’s leadership, to some degree. The Clippers were reportedly investigated in 2019 for cap circumvention in the free agency pursuit of Kawhi Leonard, but the NBA did not find evidence of wrongdoing then.
This investigation might have a different outcome, but it’s also a league governed by different rules. If this Leonard investigation goes the other way and the league finds any illegality, it would be the Clippers’ first violation of circumventing the cap, which would mean, according to Article 13 of the 2023 collective-bargaining agreement, a team found to be circumventing the salary cap can be punished up to the following for its first offense:
$4.5 million fine;
One first-round draft pick;
Void any player contract or renegotiation, Extension, or amendment of a Player Contract, between any player and any Team when both the player (or any person or entity acting with authority on behalf of such a player) and the Team (or Team Affiliate) are found to have committed such violation; and/or
Void any other transaction or agreement found to have violated (league rules regarding circumvention).
A $4.5 million fine and a first-round draft pick would qualify as a significantly lighter punishment than the Joe Smith example, especially when you consider inflation and the rising salary cap. By comparison, the Timberwolves’ $3.5 million fine in 2000 represented about 10% of the salary cap. In today’s terms, that would equate to roughly $15 million.
The penalty can expand if the violation falls under the “No Unauthorized Agreements” clause, in which case the Commissioner can levy up to the following:
$7.5 million fine;
Forfeiture of draft picks;
Void the player contract and player faces a $350,000 fine;
Suspend team personnel for up to one year;
Void any transaction or agreement in violation;
In this case, the Joe Smith/Timberwolves penalty would be within the bounds of the league office.
The timeline might muddy the picture for Silver though. On August 12, 2021, the Clippers announced Leonard’s four-year, $176 million contract extension, lengthening the pact between the Clippers and Leonard which began in 2019. According to PTFO reporting, three months later, Leonard registered a company called “KL2 ASPIRE LLC” with the state of California and Leonard’s four-year, $28 million endorsement deal with Aspiration went into effect later that April.
If the league’s investigators were to find that Leonard’s Aspiration deal fit the parameters of cap circumvention, it would be too late to void that agreement. Leonard’s four-year extension was for the 2021-22, 2022-23, 2023-24 and 2024-25 seasons, with the final season being a player option. In January of 2024, Leonard declined his 2024-25 option and inked another contract, this time worth three years and $150 million.
Leonard has already played one season of his newer deal, and is under contract for $50 million in 2025-26 and $50.3 million in 2026-27. Considering the contract in question has already expired, the ship might have sailed in the eyes of some.
Ripping up Leonard’s current contract would almost certainly draw the ire of the players union and potentially ignite a drawn-out legal battle that could hang over the league for months (years?).
Plus, in the scenario of Leonard’s contract being voided, no teams currently have $50 million of cap space with which to offer Leonard, if he sought a similar deal to the one he’s currently on. And that presents its own playing-field quandary. Getting a player of Leonard’s caliber for, say, the mid-level exception would launch a bizarre sweepstakes the likes of which the NBA has never seen.
You thought the Warriors getting Durant in 2016 because of a cap spike was unfair? Imagine if the Oklahoma City Thunder get Leonard for $8.5 million, what remains of their non-taxpayer mid-level exception, per Keith Smith’s cap analysis. How ‘bout them apples?
Could Kawhi Leonard be suspended?
For what it’s worth, Joe Smith wasn’t suspended a single game in 2000. His contract with the Timberwolves was voided and he was back on the market as a free agent.
A Leonard suspension also seems unlikely considering who’s running the league. When it comes to player rights, Silver hasn’t ruled with an iron fist like his predecessor Stern.
If Smith wasn’t shelved by Stern then, it’s hard to see a world in which Silver drops the hammer on Leonard now and keeps him off the floor, not letting the Board Man get paid. But it all depends on what the league discovers in their investigation.
How much would the Joe Smith-like penalty hurt Ballmer and the Clippers?
For Steve Ballmer, a man who’s reportedly worth $150 billion, a $4.5 million fine would seem like a drop in the bucket. To put it in perspective, it’s the equivalent of someone worth $1 million being fined … $30. Ballmer is a famously perspiry person, but I don’t think he’ll sweat a $4.5 million fine.
The draft picks might be another matter. If you recall, it’s what helped grease the wheels for the Clippers to win the Leonard sweepstakes in the first place. It’s long been reported that Leonard would only sign with the Clippers if they could also get Paul George. So the Clippers sent Shai Gilgeous-Alexander, Danilo Gallinari, five first-round picks and two swaps to the Thunder to consummate the deal. The Clippers may not value draft picks as developmental assets like other teams do, but they are undoubtedly star-chasing assets.
The twist is that, because of Leonard-George deals in 2019, the Clippers still don’t have many first-round picks at their disposal. The Clippers have already sent away the 2026 and 2028 first-round picks outright. The league could also look to strip the Clippers’ side of the 2027 and 2029 swaps. Using the Smith blueprint, taking away five first-round picks could mean the Clippers would not have a first-round pick until 2033 when Leonard would be 42. Which is not nothing.
But let’s put aside the cash and basketball-related punishments. Suspending Ballmer from team activities might hurt the owner in ways that those other levers can’t. Ballmer has been quite literally the most vocal owner in the NBA and has been a mainstay on the Clippers’ sidelines.
He’s also the face of the 2026 All-Star Game set to be held at the Intuit Dome. Which brings us to the next question …
Could the 2026 All-Star Game be part of the punishment?
I had forgotten about Ballmer playing host to the 2026 All-Star Weekend until our guy Dan Devine mentioned it in this week’s Big Number episode. After recording, I spoke with a longtime GM about what the league might do if it found evidence of cap circumvention. The All-Star Game came up.
The executive told Yahoo Sports he would not rule out the possibility that the NBA might view a case like this as more than just mere salary cap circumvention. Sweetening a deal for a player of Joe Smith’s caliber is one thing. But when it’s a two-time Finals MVP running up against a max contract cap in addition to a salary cap is another thing. (Though, it should be noted that the Clippers could offer Leonard more money than any team in 2021 because they held his Bird rights.) It’s also worth pointing out that because the Clippers were in the tax in 2021-22, a $7 million under-the-table payment to a player might also have circumvented luxury tax payments shared to other teams.
It could take a long time to get to the bottom of this. If the NBA deems the transgression to be more severe than just cap circumvention, the general manager suggested it might be possible that the NBA would try to keep Ballmer away from the spotlight while the investigation is underway.
“I think the commissioner,” the longtime executive said, “has a wide berth if you violate the collective bargaining agreement.”
The Clippers, Ballmer’s lawyers, team counsel across the league and the players union would assuredly have their own view of the matter if the NBA does decide this is more than just cap circumvention.
The 2026 All-Star Game does present a fascinating wrinkle in this whole story, if not for the deadline alone. The festivities commence about five months from now. For reference, it took nearly fivemonths for the NBA to investigate tampering accusations related to the New York Knicks signing Jalen Brunson in 2022. The tampering investigation for Kyle Lowry and Lonzo Ball took about four months. Considering neither of those players was a two-time Finals MVP, we may not hear about a resolution in time for the All-Star Game.
It can’t be overstated how massive the 2026 All-Star Game figures to be from a marketing standpoint. It’s the first NBA All-Star Game broadcast by NBC and on any network television channel since 2002. Making matters trickier is the fact that NBC holds the broadcast rights to the 2028 Olympics which will be held in Los Angeles. The All-Star Game figures to be both a marketing bonanza for the NBA but also a promotional event for its reunited broadcast partner NBC, Los Angeles and its imminent Olympics.
One option might be for the NBA to move the All-Star Game away from Intuit Dome and over to the Lakers’ Crypto.com Arena while it adjudicates the matter. The NBA did pull the 2017 All-Star Game out of Charlotte due to the state legislators’ so-called bathroom law. The spectre of the 2028 Olympics, Los Angeles and the new TV deal will hang over the Leonard investigation. These are stakes beyond basketball.
Said the GM: “If you don’t have rules, you might as well give up everything.”
Source: “AOL AOL Sports”
