INGLEWOOD, CALIFORNIA – DECEMBER 28: Owner Steve Ballmer of the Los Angeles Clippers congratulates Kawhi Leonard #2 after his 55-point game to win 112-99 against the Detroit Pistons at Intuit Dome on December 28, 2025 in Inglewood, California. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, user is consenting to the terms and conditions of the Getty Images License Agreement. (Photo by Katelyn Mulcahy/Getty Images)
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Eleven months after Pablo Torre of Meadowlark Media first reported on an alleged “no-show” sponsorship deal between then-Los Angeles Clippers forward Kawhi Leonard and a now-bankrupt environmental startup company, the NBA’s investigation appears to be nearing its conclusion.
On Monday, ESPN’s Don Van Natta Jr., Baxter Holmes and Ramona Shelburne reported that the NBA has “found no evidence showing LA Clippers owner Steve Ballmer funneled money through team sponsors to pay Kawhi Leonard in order to circumvent the salary cap, according to three people with knowledge of discussions between the two sides in recent days. Instead, the NBA is focused on whether the team’s introduction of Leonard to team sponsors constitutes a violation of the league’s rules prohibiting salary-cap circumvention, two of the sources said.
“The league is examining whether the Clippers are guilty of ‘failure to supervise’ employees, though it’s unclear what specific rule the team would have violated or what the penalties would be,” Van Natta, Holmes and Shelburne added.
After ESPN published that report, the Clippers released a statement confirming that they introduced Leonard to “companies with which we had business relationships,” which they described as “both an ordinary practice by NBA teams and a common request of players and representatives.” They added that a player having “an endorsement relationship with a company that also does business with his team is not evidence of salary-cap circumvention.”
Granted, that’s downplaying the severity of what Torre has reported. And if the NBA lets the Clippers off easy, it could open a Pandora’s box when it comes to under-the-table deals between star players and team sponsors.
The Clippers’ Alleged Transgressions
According to Torre’s Pulitzer Prize-winning reporting, Clippers governor Steve Ballmer invested $50 million into the environmental startup Aspiration, which then signed Leonard to a $28 million endorsement deal that was never made public and never required him to do anything. Earlier this month, Torre revealed that Leonard had another undisclosed sponsorship deal with the company that designed the Jumbotron for the Clippers’ Intuit Dome.
“One of the high-level sources familiar with the relationship between the Clippers and Daktronics, who was under contract for the Clippers’ Intuit Dome project for years, goes on tape with us to say, ‘It was 1,000% a way to circumvent the salary cap,’” Torre added.
The NBA’s collective bargaining agreement prohibits teams from entering “into an agreement or understanding with any sponsor or business partner or third party under which such sponsor, business partner or third party pays or agrees to pay compensation for basketball services (even if such compensation is ostensibly designated as being for non-basketball services) to a player under contract with the team.
“Such an agreement with a sponsor or business partner or third party may be inferred where: (i) such compensation from the sponsor or business partner or third party is substantially in excess of the fair-market value of any services to be rendered by the player for such sponsor business partner or third party; and (ii) the compensation in the player contract between the player and the team is substantially below the fair-market value of such contract.”
Back in January 2024, Leonard signed a three-year, $149.5 million contract extension with the Clippers that was roughly $10 million less than he was eligible to receive. Leonard signed his $28 million deal with Aspiration in April 2022, according to Torre.
The CBA also prohibits any team or “team affiliate” from reaching an agreement “involving compensation or consideration of any kind or anything else of value.” A team affiliate is “any individual or entity who or which holds an ownership interest in a team” or any entity which a team owner “holds (directly or indirectly) more than 5% of its ownership interests, or participates in or influences its management or operations.”
During an interview with Shelburne in September 2025 after Torre reported on the initial cap-circumvention allegations, Ballmer specifically noted that he had “no control” over Aspiration and “owned less than 3% of the company.” That alone should rule out the latter type of circumvention, which carries with it steeper penalties.
Even if the Clippers are found guilty of the first type of circumvention, the CBA says NBA commissioner Adam Silver can impose a fine of no more than $5.5 million, strip the Clippers of one first-round draft pick and void Leonard’s contract. If they were found guilty of the “team affiliate” form of circumvention, Silver could strip the Clippers of multiple draft picks and suspend any team executives who were “found to have willfully engage in such violation” for up to one year.
The NBA’s Slippery Slope
The Clippers, Leonard and the National Basketball Players Association all have the power under the CBA to appeal any punishment handed down by Silver, which would be heard by an independent arbitrator. According to Van Natta, Holmes and Shelburne, “Ballmer has insisted repeatedly in conversations with confidants that he will not accept a league result that asserts he or the team intended to circumvent the salary cap and would instead bring the matter to arbitration.”
The NBPA would also push back on the notion “that a sponsor introduction counts as salary-cap circumvention,” two sources told Van Natta, Holmes and Shelburne. One league insider “with direct knowledge of league business” went as far as to call that “an outrageous overreach.”
“The person also said that if the league punishes the Clippers for introducing a player to a steam sponsor, it ‘will be felt across the league—and players and their management won’t stand for it.'”
Again, it’s worth stressing here that Torre didn’t just reveal some run-of-the-mill endorsement contracts between Leonard and companies that were also affiliated with the Clippers. His deal with Aspiration was by far the company’s most expensive, according to Torre’s reporting, even though there is no public record of Leonard doing a single endorsement for the company.
If the NBA allows Leonard and the Clippers to get off relatively scot-free, it could be open season on teams arranging endorsement deals between sponsors and players far exceeding the fair-market value of the services they provide.
Granted, there’s no guarantee that the Clippers will get off scot-free. NBA spokesman Mike Bass said in a statement that ESPN’s article “contains numerous and significant inaccuracies” and “the results in this matter will be made clear once the investigation is concluded.”
The rest of the league will be watching this saga closely, and not just because it’s currently holding up the Clippers’ trade of Leonard back to the Toronto Raptors.
“I’ve spoken to multiple team strategists, for example, who told me, with chests puffed, that if the Clippers aren’t docked multiple first-round picks — if Leonard’s contract isn’t voided while his salary obligations remain on the Clippers’ books — they will feel emboldened to seek out their own version of shell companies to provided additional compensation to their players,” Jake Fischer of The Stein Line wrote in September 2025.
With the second-apron era wreaking havoc on expensive rosters and forcing teams into making financially driven decisions, getting star players to agree to below-market contracts is a godsend. If teams are emboldened by the results of the Clippers investigation to begin arranging similar deals with their own stars, it could upend the integrity of the NBA’s entire salary-cap system.
Unless otherwise noted, all stats via NBA.com, PBPStats, Cleaning the Glass or Basketball Reference. All salary information via Spotrac and salary-cap information via RealGM. All odds via FanDuel Sportsbook.
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