The Los Angeles Clippers and their star player Kawhi Leonard might be in deep trouble with the NBA. Reportedly accused of trying to circumvent the salary cap, the Clippers and Leonard might have penalties to deal with before the 2025-26 season begins.
What Penalties Can the LA Clippers Face for Circumventing the Salary Cap?
As per Pablo Torre from the podcast “Pablo Torre Finds Out,” Leonard signed a $28 million endorsement deal with a company funded by Clippers owner Steve Ballmer. While the Clippers continue to deny the allegations, one can’t rule out consequences if an investigation confirms Torre’s claim.
If Torre’s claim is proven, then Leonard and the Clippers will find themselves in the middle of the NBA’s most significant fraud case. Torre explained that Leonard signed an endorsement deal after his stint with the Toronto Raptors, receiving $7 million per year from 2022.
The deal is with a company called “Aspiration, Inc.”, which is ultimately connected to Ballmer. Listed as a non-profit, the company filed for bankruptcy earlier this year.
Exclusive: Kawhi Leonard signed a $28M endorsement deal for a “no-show job” with a fraudulent tree-planting company funded by $50M from Clippers owner Steve Ballmer, according to documents obtained by @PabloTorre.
“It was to circumvent the salary cap,” an inside source says. pic.twitter.com/F6z5pNEkI1
— Pablo Torre Finds Out (@pablofindsout) September 3, 2025
Leonard, along with his agent and uncle Dennis Robertson, was also listed in the filing.
An anonymous previous employee revealed that the endorsement was set up specifically to avoid the salary cap and will be deemed invalid if Leonard ever plays for another team. Since Leonard doesn’t have any public endorsements with the team, this furthers Torre’s accusation about the ‘no-show’ job.
Torre’s reveal caused a complete riot in the NBA world, with fans scrambling to verify the truth behind the situation.
Minnesota Timberwolves-Joe Smith’s 2000 Scandal Suggests Heavy Penalty
During the 2000 offseason, the Minnesota Timberwolves and Joe Smith were caught in a scandal worth over $80 million. Smith, a former No. 1 overall pick, signed a one-year, below-market-value $1.75 million deal with the Wolves. This was to help the Wolves make other possible moves that offseason.
However, considering Smith had denied an $80 million extension with the Golden State Warriors, his deal in Minnesota was questioned by some.
Their deal — as exposed later — was illegal. The Wolves and Smith mutually decided that the latter would sign three one-year deals for minimal pay. This would ultimately allow the Wolves to acquire Smith’s Bird rights so they can sign a $86 million deal exceeding the salary cap.
The NBA was strict with its punishments:
- The Timberwolves were fined $3.5 million and lost five first-round draft picks.
- Smith’s newly signed contract and the previous two deals were declared void. This also took away his Bird Rights from Minnesota.
- Timberwolves owner Glen Taylor was suspended until August 31, 2001.
Additionally, their VP of basketball operations, Kevin McHale, was on an extended leave of absence until July 31. Then-NBA commissioner David Stern ultimately returned two of the Wolves’ picks (2003 and 2005), especially since the penalties were extremely severe.
Despite other cases about salary cap circumvention, Smith’s penalties remain the most significant in NBA history.
What Penalty Can the Clippers Receive Today?
Nearly 25 years after Smith’s scandal, the Collective Bargaining Agreement (CBA) can issue these punishments today:
- Contracts that violate the NBA rules can be voided
- A fine of $4.5 million for a first offense.
- Any further offense will result in a fine of up to $5.5 million.
- The team involved will lose one first-round pick.
Clippers Deny Any Knowledge of Illegal Endorsement Deals With Leonard
That being said, the Clippers have denied Torre’s accusations. “Neither Mr. Ballmer nor the Clippers circumvented the salary cap or engaged in any misconduct related to Aspiration. Any contrary assertion is provably false,” the Clippers said.
The team apparently ended its association with Aspiration years ago.
Furthermore, a 2019 investigation into Leonard and the Clippers provided no solid evidence of salary cap circumvention.
While an official investigation is pending, one can only speculate about the kind of consequences the team and Leonard will face.
Leonard started his career with the San Antonio Spurs in 2011. He played one season with the Raptors in 2018-19 before moving to the Clippers. He is currently signed to a three-year, $149,505,800 contract with the Clippers.
