NBA faces substantial complications if Kawhi Leonard's contract is invalidated
The Los Angeles Clippers are currently under investigation by the NBA for potential salary cap circumvention, with the focus of the investigation centring around a no-show endorsement deal with a now-bankrupt company called Aspiration.
If found guilty, the Clippers could face significant penalties based on Article XIII of the Collective Bargaining Agreement (CBA). The team, with five remaining first-round picks and pick swaps in 2027 and 2029, along with their 2026 Memphis pick share, could potentially have these assets seized by the league.
Suspending Steve Ballmer and other Clippers personnel for up to a year, as per the CBA, could create awkwardness when Ballmer's Intuit Dome hosts the 2026 NBA All-Star Game. However, fines for the individual parties in the Clippers' organization, including Ballmer, are less than 4% of the Clippers' payroll and could be considered light penalties.
Voiding Kawhi Leonard's contract is a possible penalty, but it could be seen as penalizing the Clippers by freeing up max cap space or as doing them a favor due to Leonard's injury history and high salary. The mayhem that would ensue in the free-agent market if Leonard were to become an unrestricted free agent halfway through the season is a concern, as it could disrupt competitive balance and the playoff chase.
The league could potentially place the money Leonard received from Aspiration onto the Clippers' 2026-27 cap, eliminating the double-jeopardy concern and depriving L.A. of a cap-space bonanza. If the Clippers' swap partners in 2027 and 2029 are affected by a penalty, the surrendered pick in 2027 would be the lesser of the Clippers', Oklahoma City's, or Denver's, and in 2029 the lesser of the Clippers' or Philadelphia's.
It's important to note that the search results do not contain information about the year in which the NBA league's investigation into the LA Clippers will be completed. The league might drag out the process until the spring and void the contract once the regular season has ended to establish an orderly process for Leonard to find his next team in the summer.
The league's investigation is ongoing, and the ultimate strength of the case may depend on the absence of a specific check from Ballmer to Aspiration. There is currently no smoking gun linking Clippers owner Steve Ballmer's and minority owner Dennis Wong's investments in Aspiration to the payments made to Kawhi Leonard.
A midseason free agent of Leonard's calibre would present challenges for the league to ensure a market-rational outcome, and a suspension for the season might be seen as unduly harsh or a precursor to a fight with the players' union. The NBA penalty for draft pick circumvention, as seen in the Joe Smith case in 1999, cannot exceed the number of picks a team has left to be penalized.
In conclusion, the ongoing investigation into the LA Clippers for potential salary cap violations could result in significant penalties for the team, including the forfeiture of draft picks and the suspension of key personnel. The outcome of the investigation will have a significant impact on the future of the Clippers and the NBA.
