Los Angeles Clippers and owner Steve Ballmer have been accused by Pablo Torre of paying superstar Kawhi Leonard $28 million for a “no-show job” as a way to circumvent the NBA salary cap.
On his show, Pablo Torre Finds Out, Torre claimed that Kawhi Leonard was paid $28 million through a company owned by Steve Ballmer as a way to pay Leonard more than his contract. Torre’s show featured direct quotes from legal documents as evidence of this. If true, this would be a violation of NBA rules.
Aspiration is a now-bankrupt tree-planting company that entered a $28 million legal agreement with KL2 Aspire, LLC, a company owned by Leonard. One Aspiration employee agreed to an interview with Torre, using a voice modifier, and claimed they were told the agreement was intended to “circumvent the salary cap.”
The Los Angeles Clippers responded to those allegations by sending the following quote to Torre: “Neither Mr. Ballmer nor the Clippers circumvented the salary cap or engaged in any misconduct related to Aspiration. Any contrary assertion is provably false.”
Here, we examine the potential punishments for Leonard and the Clippers if they are found guilty of violating NBA rules.
Punishments that could be given to the LA Clippers and Kawhi Leonard if found guilty of breaching NBA rules
Article XIII of the NBA Collective Bargaining Agreement prohibits salary-cap circumvention and grants the Commissioner, Adam Silver, enforcement authority. The Commissioner may impose fines, void contracts, rescind draft picks, and suspend team personnel if violations are found.
In the most severe scenario, Leonard’s Clippers contract could be voided. Here are the potential scenarios for Leonard if he is found guilty of breaking NBA salary cap rules:
- Suspension: The NBA could suspend him for a number of games without pay.
- Fines: Leonard could face heavy financial penalties.
- Contract Voiding: In extreme cases, the NBA could attempt to void or disallow his contract if it was obtained through cap circumvention.
Meanwhile, the Clippers could face punishments such as a loss of draft picks and a heavy fine. Their potential punishments are as follows:
- Loss of Draft Picks: The Clippers could be stripped of future draft picks.
- Fines: Teams can be fined up to $10 million for violating the salary cap or tampering rules.
- Void Contracts/Restrictions: The league could force contracts to be restructured or voided if they were made illegally.
The Clippers were positioned to contend for the NBA championship this season. Bradley Beal signed in LA to join Leonard and James Harden, and Chris Paul also returned to the Clippers.
This is an unwelcome distraction, and depending on the punishment if they were to be found guilty of breaking NBA rules, it could derail not just this season, but years to come.
If Leonard were personally complicit in deliberate cap circumvention, he’d likely face suspension and fines. The Clippers, however, would almost certainly take the harsher hit, which would mean a loss of draft picks, heavy fines, and possibly voided deals.
Historical Precedent for NBA salary cap circumvention, Minnesota Timberwolves and Joe Smith
The Minnesota Timberwolves were found to have an under-the-table deal with Joe Smith in 1999 to circumvent the cap, similar to what the Clippers and Leonard have been accused of.
Smith signed three one-year deals for little money in Minnesota, despite being offered $80 million to remain with the Golden State Warriors. That allowed the Timberwolves to acquire his Bird rights and go over the salary cap to re-sign him.
He would have then been paid up to $86 million. This arrangement, of course, was highly illegal, and the Timberwolves faced severe sanctions when the league discovered it.
Commissioner David Stern and the NBA came down harshly on the Timberwolves. The team was fined $3.5 million, was forced to forfeit five first-round draft picks, and Smith’s Timberwolves contract was voided.
If the Clippers faced equivalent sanctions, it would ruin their draft equity. They would not be able to build for the future with an ageing roster. They recently moved into their new $2 billion arena, the Intuit Dome.
If they cannot bring in exciting new faces once Leonard and Harden have left, Ballmer and the Clippers face significant troubles down the road.