High price for Kawhi Leonard: Clippers could potentially surrender considerable sums exceeding Leonard's actual value
The Los Angeles Clippers, under the ownership of Steve Ballmer, are currently under investigation by the NBA for allegations of salary cap circumvention. The investigation stems from a $28 million payment to Kawhi Leonard via a corporation linked to Ballmer and Aspiration, a sustainability company.
The law firm appointed to investigate the allegations is "Wachtell, Lipton, Rosen & Katz." If found guilty, this could constitute highly illegal activity according to the NBA.
The allegations suggest that Ballmer set up a no-show job for Leonard to pay him more than the NBA's salary cap would allow. This could potentially lead to Leonard joining another team for the league minimum. The potential penalties for the Clippers, if found guilty of salary cap circumvention, could take them a long time to recover from, potentially longer than they ever anticipated when they signed Leonard six summers ago.
The voiding of Leonard's contract could potentially lead to him ending up on a different team, such as the Lakers. However, speculation remains unconfirmed at this point.
The Clippers traded five first-round picks to acquire Paul George in 2019, which was a requirement to land Leonard as a free agent. The Kawhi era for the Clippers has been a major basketball disappointment, with the team failing to make it past the second round of the playoffs.
The Clippers, under Ballmer, were valued at more than $5 billion, a significant increase from the $2 billion Ballmer paid in 2014. However, the potential losses in the salary cap investigation could impact their future significantly more than their initial expectations.
The potential penalties for the Clippers could include fines, loss of draft picks, and voiding of Leonard's contract. If the NBA Commissioner, Adam Silver, goes hard on the Clippers, they could end up in a big enough hole that it would take them a long time to dig out.
The Timberwolves faced similar penalties in 2000 for a similar salary cap violation, including the voiding of Joe Smith's contract, loss of future first-round picks, and suspensions and leaves of absence for team officials. The Joe Smith deal significantly crippled the Timberwolves and may have contributed to losing Kevin Garnett after their resources were stripped.
Leonard also received $20 million in shares from Aspiration. The Clippers had Shai Gilgeous-Alexander, last year's regular-season and Finals MVP, but now he plays for the Thunder. The Thunder have a championship that the Clippers have never won with Leonard.
Kawhi Leonard has cost the Clippers eight first-round picks in total, considering the potential loss of future draft picks due to the salary cap investigation. The Clippers' future hangs in the balance as they wait for the results of the investigation.
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