Due Process, the Salary Cap, and the Kawhi Leonard Endorsement Controversy: What the NBA Is Really Investigating

[1]

In recent weeks, a complex web of financial transactions and sponsorship deals has brought the Los Angeles Clippers and their star forward Kawhi Leonard into the center of one of the most high-profile salary cap investigations in NBA history.[2] At the heart of the matter is whether the Clippers used a now-defunct green banking company called Aspiration to compensate Leonard in a way that violated the league’s collective bargaining agreement (CBA).[3]

Endorsements or Hidden Compensation?

The controversy stems from an ongoing NBA investigation, launched after allegations surfaced in early September on the Pablo Torre Finds Out podcast.[4] Former employees of Aspiration claim that the company, which had received a $50 million investment from Clippers majority owner Steve Ballmer, entered into a $28 million endorsement agreement with Leonard that required little or no actual work (a “no-show job”).[5] This deal, along with a separate $20 million stock package reportedly given to Leonard by Aspiration’s co-founder, was designed to circumvent the NBA’s salary cap, effectively allowing the Clippers to pay Leonard more than his league-approved contract permitted.[6]

Concerns grew deeper when reports emerged that Clippers minority owner Dennis J. Wong made a $2 million investment in Aspiration in December 2022, just nine days before the company wired a $1.75 million payment to Leonard's KL2 Aspire LLC.[7] The payment was allegedly part of an ongoing endorsement agreement, but came at a time when Aspiration was laying off employees and could barely make payroll.

The CBA & Cap Circumvention

The NBA must determine whether these financial arrangements violate Article XIII of the current CBA, which explicitly prohibits teams, team owners, or affiliates from providing players with any form of compensation not included in their standard player contracts.[8] If it is proven that Ballmer or other Clippers representatives arranged or influenced Aspiration’s payments to Leonard as a condition of his remaining with the team, that would be considered a cap circumvention violation, triggering significant league penalties.[9] These penalties could include multimillion-dollar fines, forfeiture of draft picks, suspension of team executives, or, in extreme cases, voiding Leonard’s contract (making him an unrestricted free agent), and prohibiting him from signing with the Clippers again.[10]

Joe Smith and the Timberwolves

The NBA has seen cap circumvention cases before, though few have involved such high-profile players and owners. One of the most notable precedents for Leonard’s situation occurred in 2000, when the Minnesota Timberwolves were penalized for a secret agreement with forward Joe Smith, where the team promised to sign Smith to larger contracts in the future if he initially accepted below-market deals.[11] The NBA responded by voiding Smith’s contract, fining the Timberwolves $3.5 million, and stripping them of five first-round draft picks (three of which were later restored).[12] Then owner Glen Taylor and GM Kevin McHale were also suspended.[13] The league took a harsh stance, not because the payments had already occurred, but because the intent to circumvent the cap had been proven, a crucial legal distinction.

Silver Emphasizes Due Process Over Optics

In the current case, the question is whether there is provable intent or collusion between Leonard, Aspiration, and Clippers’ ownership.[14] Commissioner Adam Silver, speaking to reporters last week, emphasized the importance of investigating the totality of the evidence rather than acting on appearances alone.[15] “As a matter of fundamental fairness, I would be reluctant to act if there was a mere appearance of impropriety,” Silver said.[16] Silver, an attorney, also reaffirmed that the burden of proof lies with the league, not the Clippers, and emphasized that due process will guide the league’s actions.[17] The investigation is being handled by the New York-based law firm Wachtell, Lipton, Rosen & Katz, and no timetable has been set for it.[18]

Clippers Claim They Were Defrauded

The Clippers have denied any wrongdoing. In a statement provided to Pablo Torre Finds Out, the team said Steve Ballmer was “duped on the investment” and that they intend to cooperate with the investigation.[19] Ballmer has publicly claimed that he was a victim of fraud by Aspiration’s founder, Joe Sanberg, who is reportedly cooperating with federal investigators and is expected to plead guilty to fraud charges.[20] Still, the optics are hard to ignore.

What’s Really at Stake for the NBA

What makes this case especially significant to the current state of the NBA is that it may redefine the boundaries of permissible business relationships between team owners, players, and affiliated companies. As the business of sports becomes increasingly complex, with players serving as brand ambassadors, investors, and business partners, the lines between legitimate business and cap circumvention continues to blur. The CBA provides some guidance, but this case could push the league to consider even stricter rules in future agreements. Ultimately, Silver’s insistence on fairness and due process may be the league’s best defense against accusations of selective enforcement or commissioner overreach, but for other teams the real story is not just whether the Clippers crossed a line, but where that line will be drawn going forward.

GABBY PAINTER (contributing editor) is a 3L from Spring City, PA. She is an avid Philadelphia sports fan. Currently, Gabby is on the Basketball Negotiation Team at Villanova and interning in the athletic compliance department at her alma mater, Franklin & Marshall College. After graduation, she hopes to pursue a career in negotiating contracts for a professional basketball team.

References:

[1] Marius Christensen. (July 11, 2021). Unsplash.

[2] Justin Tasch. Clippers’ $21 million Aspiration paper trail discovered in Kawhi Leonard no-show scandal. (Sep. 18, 2025). clippers-21m-aspiration-paper-trail-discovered-in-kawhi-leonard-no-show-scandal

[3] Id.

[4] Bryan Kalbrosky. The latest updates on the Kawhi Leonard endorsement scandal, explained. (Sep. 5, 2025). https://sports.yahoo.com/article/latest-updates-kawhi-leonard-endorsement-155109002.html

[5] Id.

[6] Id.

[7] Will Backus. Kawhi Leonard was paid by Aspiration days after Clippers' minority owner invested in company, per report. (Sep. 11, 2025). https://www.cbssports.com/nba/news/kawhi-leonard-was-paid-by-aspiration-days-after-clippers-minority-owner-invested-in-company-per-report/

[8] See 2023 NBA Collective Bargaining Agreement, Article XII

[9] Id.

[10] Id.

[11] Shane Garry Acedera. "It's far worse than Joe Smith" - Mark Cuban thinks the entire Clippers leadership is done if the Kawhi scandal gets proven. (Sep. 6, 2025). https://sports.yahoo.com/article/far-worse-joe-smith-mark-073300356.html

[12] Id.

[13] Id.

[14] Shwetha Surendran. What is Aspiration, the company behind the Kawhi Leonard deal?. (Sep. 13, 2025). aspiration-company-kawhi-leonard-steve-ballmer-la-clippers

[15] Id.

[16] Id.

[17] Id.

[18] Id.

[19] The Athletic NBA Staff. Clippers say owner was ‘duped’ in response to latest Kawhi Leonard deal allegations. https://www.nytimes.com/athletic/6641165/2025/09/18/clippers-ballmer-carbon-credits-kawhi-aspiration/

[20] Jack Baer. Kawhi Leonard scandal: Steve Ballmer reportedly invested another $10 million into company he said 'conned' him. (Sep. 12, 2025). https://sports.yahoo.com/nba/breaking-news/article/kawhi-leonard-scandal-steve-ballmer-reportedly-invested-another-10-million-into-company-he-said-conned-him-225640056.html