NBA Launches Investigation into Kawhi Leonard and Clippers for Alleged Salary Cap Violations: Here’s What You Need to Know

The NBA has enlisted the New York law firm Wachtell, Lipton, Rosen & Katz to investigate claims concerning LA Clippers star Kawhi Leonard and his endorsement deal with a now-defunct environmental company, Aspiration.

This scrutiny emerged after employees from Aspiration alleged that Leonard’s four-year, $28 million contract was essentially a “no-show job” designed to bypass the NBA’s salary cap. Reports also hinted that Leonard may have another $20 million deal tied to company stock from co-founder Joe Sanberg, who has admitted to defrauding investors of $248 million.

Wachtell Lipton has a history with the NBA, previously investigating high-profile misconduct cases among team owners. Notably, the firm looked into former Clippers owner Donald Sterling for racist remarks and former Suns owner Robert Sarver for inappropriate behavior. Both investigations resulted in significant penalties: Sterling faced a lifetime ban and a fine of $2.5 million, while Sarver was suspended for a year and fined $10 million, ultimately leading him to sell the team.

Steve Ballmer, owner of the Clippers and the NBA’s wealthiest team owner with a net worth of $153 billion, has denied any wrongdoing. He claims he merely connected Leonard with Aspiration’s executives and was unaware of the employment details.

Ballmer invested $50 million in Aspiration in 2021, which later became the Clippers’ jersey and arena sponsor in a deal worth $300 million over 23 years. Leonard’s contract included a provision allowing him to ignore any requests from Aspiration. Notably, Leonard is listed as the third-highest creditor in Aspiration’s bankruptcy filings, claiming $7 million.

The timeline of these allegations goes back to Leonard’s free agency in 2019 when he and his uncle requested several non-standard perks from teams before deciding to join the Clippers. The NBA investigated these claims and found no wrongdoing at that time.

In January 2024, Leonard signed a contract extension with the Clippers that raised eyebrows, as it was not a maximum salary deal. This allowed the team increased flexibility to manage its roster effectively.

If the NBA determines there was a violation of salary cap rules, penalties could be severe. Given that the Clippers were previously fined for a similar issue in 2015, consequences could range from hefty fines to the forfeiture of draft picks or even contract voids.

This case showcases the ongoing challenges of maintaining integrity in professional sports, especially regarding financial dealings. As fans and analysts watch closely, this investigation could shape the future of not only the Clippers but also NBA policies on compliance and accountability.

For more on sports finance, check this Forbes article.

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