The Los Angeles Clippers, along with their owner Steve Ballmer, are facing accusations of orchestrating a scheme to bypass the NBA`s salary cap rules through star player Kawhi Leonard. These serious allegations come from an investigative report by journalist Pablo Torre, which emerged following a March 2025 bankruptcy filing by Aspiration, a sustainability company that had previously received $50 million in funding from Ballmer.
Aspiration itself has been mired in fraud allegations, with its co-founder, Joseph Sanberg, admitting guilt to defrauding numerous investors. The bankruptcy documents revealed a list of entities to whom Aspiration owed money, prominently featuring KL2 Aspire LLC, a company managed by Kawhi Leonard.
According to these filings, Aspiration still owes Leonard $7 million. Curiously, Torre`s investigation uncovered no evidence of Leonard publicly endorsing or even mentioning Aspiration, which would be standard practice for an endorsement deal. In contrast, other public figures, such as Milwaukee Bucks head coach Doc Rivers, did endorse the company. A document signed by Leonard, acquired by Torre, detailed a $28 million cash payment to Leonard over four years (2022-2025), contingent on his continued play for the Clippers. A former finance employee at Aspiration reportedly told Torre`s podcast, `Pablo Torre Finds Out,` that the arrangement was explicitly designed `to circumvent the salary cap.`
Given these revelations, it`s crucial to understand the implications. Let`s delve into the NBA`s regulations concerning salary cap circumvention to clarify the situation.
What is Salary Cap Circumvention?
The precise legal definition of salary cap circumvention is outlined within pages 339 to 346 of the NBA`s Collective Bargaining Agreement, specifically in Section 1(b). In essence, it occurs when a team employs a third party to compensate a player beyond their contracted salary or the legal limit imposed by the salary cap. A common method involves an endorsement deal with a company that has ties to the team or its owner.
While concrete proof of salary cap circumvention is uncommon, the league`s regulations are designed to prevent various manipulative practices. The most relevant scenario here involves a superstar leveraging their free agency status to secure compensation exceeding their maximum permissible salary under league rules. Other instances might include a team offering a player a deliberately low-value free agent contract with an unspoken agreement to offer a much larger deal later, once the team acquires the necessary `Bird Rights.` Similarly, paying an underpaid player who is ineligible for a contract extension falls under this umbrella. These stringent rules aim to maintain competitive balance by prohibiting teams from gaining an unfair advantage through illicit player compensation.
Leonard, who initially joined the Clippers in the summer of 2019, most recently secured a three-year contract extension valued at nearly $150 million in 2024.
Has Anyone Ever Been Caught Circumventing the Cap?
In 1993, the NBA raised concerns that the Portland Trail Blazers had circumvented the salary cap through the unconventional structure of center Chris Dudley`s contract. This seven-year, $11 million agreement featured an opt-out clause after the inaugural season. This was crucial because, at that time, a free agent could acquire full `Bird Rights` with a new team after just one year, enabling Dudley to opt out and re-enter free agency, whereupon the Blazers could have exceeded the salary cap to offer him a larger contract. Ultimately, this contract was affirmed through arbitration, and Dudley did not utilize his opt-out due to an injury sustained in his first year with Portland. The league`s regulations regarding contract structures have since become considerably more stringent. Other players from that era, including Toni Kukoc and Craig Ehlo, had comparable provisions in their deals.
In 1996, renowned agent David Falk reportedly devised a plan to help the New York Knicks make a compelling financial offer for Michael Jordan during his free agency. The Knicks and Sheraton Hotels shared the same parent company, ITT Corporation. Although the Knicks possessed salary cap space, there was no maximum salary at the time, which meant the Bulls, holding Jordan`s `Bird Rights,` could offer him an unlimited amount to keep him. Falk`s strategy involved Jordan receiving $15 million to endorse Sheraton Hotels. However, this scheme was never formally presented to the league, as Jordan eventually chose to re-sign with the Bulls.
However, the most infamous instance of salary cap circumvention in NBA history centers on former No. 1 overall draft pick Joe Smith. Despite not achieving the superstar status Golden State had anticipated after selecting him in 1995, Smith was still considered a prominent free agent in 1998. Consequently, it came as a surprise when he inked an inexpensive, single-year contract to play for the Minnesota Timberwolves.
Two years subsequent, Smith`s agent departed his previous firm, and a contentious lawsuit ultimately exposed the truth: Smith had agreed to three distinct one-year contracts with the Timberwolves. This arrangement was designed to allow Minnesota to secure his full `Bird Rights` after the third season, enabling them to then offer him a new, substantial long-term deal that could have been worth up to $86 million.
In response to this circumvention, then-NBA Commissioner David Stern imposed unprecedented penalties. The Timberwolves incurred a $3.5 million fine. All of Smith`s contracts were nullified, along with his `Bird Rights` with Minnesota. Additionally, then-owner Glen Taylor was prohibited from overseeing the Timberwolves` operations for a year. Most significantly, Stern revoked the Timberwolves` next five first-round draft picks. While the severity of this punishment led to the reinstatement of their 2003 and 2005 picks, the team still forfeited three valuable selections.
What is the Penalty for Cap Circumvention Today?
Should the Clippers be found guilty of salary cap circumvention, the penalties they would face are considerably less severe than in past eras. According to the current Collective Bargaining Agreement, the commissioner has the authority to impose the following sanctions for such violations:
- A fine of up to $4.5 million for an initial offense.
- A fine of up to $5.5 million for a second or any subsequent violation.
- The forfeiture of a single first-round draft pick.
- The voiding of any contracts or transactions found to be in violation of league rules.
Thus, under the current CBA, the Clippers would likely not face the devastating multi-year draft pick penalties that afflicted the Timberwolves a quarter-century ago, unless they are found guilty of repeated infractions. Presently, Torre`s reporting only pertains to the alleged single violation involving Leonard.
Have There Ever Been Accusations Against Leonard or the Clippers?
While neither Leonard nor the Clippers have ever been definitively proven to have circumvented the salary cap, persistent rumors have circulated since Leonard`s decision to join the team in 2019.
Immediately following Leonard`s signing, Sam Amick of The Athletic disclosed that a formal complaint had been lodged with the league office. This complaint alleged that Dennis Robertson, Leonard`s uncle, had sought illicit benefits during the free agency period. Amick`s contemporaneous report indicated that accounts of Robertson`s demands reached the league shortly after Leonard`s commitment, with concerned individuals reporting that Leonard`s uncle had requested significantly more than a maximum contract (Leonard eventually signed a three-year, $103 million deal with the Clippers). Sources within the league indicated that Robertson had reportedly asked team officials for:
part ownership of the team, a private plane that would be available at all times, a house and — last but certainly not least — a guaranteed amount of off-court endorsement money that they could expect if Leonard played for their team. All of those items, to be clear, would fall well outside the confines of the league’s collective bargaining agreement.
Amick`s reporting specified that Robertson made these requests to both the Lakers and the Raptors. Nevertheless, the NBA found no evidence that the Clippers acceded to these demands. Adam Silver, the NBA Commissioner, directly addressed the investigation with The Athletic, stating in 2019:
We did inform our teams (at the Board of Governors meeting in New York in late September) that we are investigating and will continue to investigate activities from this past summer. […] I will also state that our intention at this board meeting was to establish a clear boundary and redirect everyone`s focus toward future free agency regulations. I believe I`ll simply leave it at that. We are examining the conduct from the summer; we have been and continue to do so, but our primary goal is to fundamentally alter how business is conducted moving forward.
Significantly, Amick also noted that `should any pertinent evidence of improper benefits emerge in the future, the league will reactivate its investigation and reinstate the charges.` In 2020, the NBA was compelled to conduct another investigation into the Clippers after Johnny Wilkes, identified as a friend of both Leonard and Robertson, filed a lawsuit against the Clippers and team consultant Jerry West. Wilkes claimed he was owed $2.5 million for his role in assisting the Clippers in acquiring Leonard`s services. This lawsuit was ultimately dismissed by the Los Angeles Superior Court in 2022.
It`s worth noting that Leonard`s initial signing with the Clippers occurred in July 2019. However, the contentious deal uncovered by Torre reportedly commenced on April 1, 2022, and was slated to conclude on March 31, 2026. Leonard`s first contract with the Clippers was for three years and $104 million. He subsequently re-signed for four years and $176 million in 2021, followed by another extension in 2024 for three years and $149.5 million.
How Have the Clippers and the League Responded?
Neither the NBA nor Kawhi Leonard has released a statement regarding Torre`s investigative report. The Clippers, however, provided a statement to Torre, asserting, `Neither Mr. Ballmer nor the Clippers circumvented the salary cap or engaged in any misconduct related to Aspiration. Any contrary assertion is provably false.`
At this time, it remains uncertain whether the NBA will launch an official investigation based on Torre`s findings.
