BREAKING: LAC Kawhi Leonard Found to Circumvent Cap

[khaled1987]

And Cuban is the first to defend them.

https://basketball.realgm.com/wiretap/28...llegations

[SleepingHero]

I'm not getting your logic.

If I put capital into a company and have them pay my player under the table...payments that avoid the LT, avoid apron penalties and provide a way for my team to have an advantage in signing and retaining said player, I have absolutely circumvented the cap.  

This is so much worse than Joe Smith.  The only way this isn't a big deal is if so many teams are doing similar things that a majority of owners want this squashed.

Which is what makes me worried. Perhaps multiple owners are doing exactly this anyways, in which case its a horrible look for the league. Stern was always quick to punish even an "appearance" of tampering. 

Silver has been shown to be more lenient anyways. But this? This is big. And if it isn't handled in a swift/direct manner then I don't see why other teams wouldn't do exactly this going on in the future. And why even have a cap at that point if other owners are just going to pay their stars extra money anyways.

[michaeltex]

This stinks. A Lot!

What gets me is that stars of Kawahi's level usually have endorsement money coming in that can exceed their salary. Why would they even need to do this?

[F Gump]

I'm not getting your logic.

If I put capital into a company and have them pay my player under the table...payments that avoid the LT, avoid apron penalties and provide a way for my team to have an advantage in signing and retaining said player, I have absolutely circumvented the cap.  

This is so much worse than Joe Smith.  The only way this isn't a big deal is if so many teams are doing similar things that a majority of owners want this squashed.

"The only way this isn't a big deal is if so many teams are doing similar things ..." --- I don't agree with that. I think it's a big deal IF Ballmer indeed crossed certain lines (which we don't yet know for sure that he did) and it's NOT a big deal if he didn't. The devil is in the details (of what happened), not in the rule, imo. And now that it's in the public domain - VERY PUBLIC - there's no way for the NBA to pretend it does not exist. They will hire an investigator to determine what the facts are, and then  decide.

The rule is this:

It shall constitute a violation of Section 1(a) above [a prohibition against actions taken to circumvent the cap limits] for a Team (or Team Affiliate) to enter 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 to 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 or 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. © It shall constitute a violation of Section 1(a) above for a Team (or Team Affiliate) to have a financial arrangement with or offer a financial inducement to any player (not including retired players) not signed to a current Player Contract, except as permitted by this Agreement. 

The question will be what KL did to justify the $28M he was being given, along with whether the money from Ballmer to the business was otherwise justified and reasonable (ie, can it be explained as something Ballmer would have done without KL getting $28M). That is the hinge, and we don't yet know enough to be sure imo.

The problem in saying "Ballmer definitely went over the line" is that endorsement deals that give loads of extra money to a player are not against the CBA rules. This company has every right to give KL money, if they wish, KL has every right to take it, and LAC doesn't have to care. It's only where Ballmer/LAC can be shown to be using the outside company as a conduit to channel their money to KL, that's where it crosses a line.

My guess is that Ballmer would have worked to do this in a way that didn't cross any lines (since such endorsement deals are generally permissible) but the devil is in the details. We'll see where it goes.

BTW, if the investigation finds a line was crossed, the penalties are given in the CBA. It can include any or all of: fine by Silver up to 4.5M, loss of 1 FRP, and void KL contract, and if it is appealed to Arbitration the potential penalties go up. The idea that Ballmer can and would sue the league to prevent enforcement is fairly absurd, as he is a party to the agreement that says these are the penalties for doing x-y-z. He might not like it, if it were to be so ruled, but that's the world he joined.

[Reunion Mav]

"The only way this isn't a big deal is if so many teams are doing similar things ..." --- I don't agree with that. I think it's a big deal IF Ballmer indeed crossed certain lines (which we don't yet know for sure that he did) and it's NOT a big deal if he didn't. The devil is in the details (of what happened), not in the rule, imo. And now that it's in the public domain - VERY PUBLIC - there's no way for the NBA to pretend it does not exist. They will hire an investigator to determine what the facts are, and then  decide.

The rule is this:

It shall constitute a violation of Section 1(a) above [a prohibition against actions taken to circumvent the cap limits] for a Team (or Team Affiliate) to enter 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 to 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 or 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. © It shall constitute a violation of Section 1(a) above for a Team (or Team Affiliate) to have a financial arrangement with or offer a financial inducement to any player (not including retired players) not signed to a current Player Contract, except as permitted by this Agreement. 

The question will be what KL did to justify the $28M he was being given, along with whether the money from Ballmer to the business was otherwise justified and reasonable (ie, can it be explained as something Ballmer would have done without KL getting $28M). That is the hinge, and we don't yet know enough to be sure imo.

The problem in saying "Ballmer definitely went over the line" is that endorsement deals that give loads of extra money to a player are not against the CBA rules. This company has every right to give KL money, if they wish, KL has every right to take it, and LAC doesn't have to care. It's only where Ballmer/LAC can be shown to be using the outside company as a conduit to channel their money to KL, that's where it crosses a line.

My guess is that Ballmer would have worked to do this in a way that didn't cross any lines (since such endorsement deals are generally permissible) but the devil is in the details. We'll see where it goes.

BTW, if the investigation finds a line was crossed, the penalties are given in the CBA. It can include any or all of: fine by Silver up to 4.5M, loss of 1 FRP, and void KL contract, and if it is appealed to Arbitration the potential penalties go up. The idea that Ballmer can and would sue the league to prevent enforcement is fairly absurd, as he is a party to the agreement that says these are the penalties for doing x-y-z. He might not like it, if it were to be so ruled, but that's the world he joined.

Now this is an extremely helpful post. 

Mavs please stay quiet less the league search for some violation to hit us with. Dallas it seems to me has sometimes been a good team for the league to make an example of. Let that go to the Clippers this time if that is the result of the investigation.

[ballsrchr]

Haven't read or explored this, but if true....


https://x.com/pablofindsout/status/1963180670810767577

I have read and explored this.  It's a blatant attempt to circumvent the cap rules.  Unfortunately I think it will be "investigated" and swept under the bleachers--because this type of thing probably runs rampant throughout the league to a more or lesser...much lesser...degree.

I could say more about this, but I'm disgusted...and jaded.  I don't think the diva Kawhi Leonard is worth the money he gets anyway.

Nothing will be done.  Maybe a slap on the hand.

I hope I'm wrong...

[F Gump]

FWIW I just saw where Bobby Marks posted a video discussing this situation, and he understands the situation better than most because he's been there -- he was in the BKN front office when they were charged with something similar about 10 years ago. He said that in their case, it was the "optics" (it looked bad) when they had not actually done anything wrong, the investigation took about a month, and they were exonerated. He thinks that's what will happen here.

The question will be one of proving LAC/Ballmer had knowledge (of KL getting money for nothing ) AND control (directed by Ballmer/LAC) AND Ballmer's money was being given to the company for the express purpose of then handing it to KL. He says the NBA will have top-level forensic investigators who will get full access to emails, phones, documents, etc (the company is in bankruptcy AND there's a federal fraud investigation, so all of those types of things are already seized and investigated for other purposes too, so readily available). Marks' guess is that while the optics are bad on the surface, there's going to be nothing whatsoever proving any of those prohibited acts actually happened. Marks also makes the point that it will take WAY more than anonymous people in the shadows unwilling to come forward publicly supposedly claiming they knew it was a cap-circumventing scheme, and it seems there's the strong possibility that rather than Ballmer doing wrong, the money he gave them was a Ponzi-style scam where money was flying around (to sell the scam) but he was just one of the victims (along with others). We'll see what happens.

[Chicagojk]

It just feels dirty.  To be honest, I am surprised this has not popped up more in professional sports.   

The second Apron is so punishing for the NBA.  What would stop me as Mr. rich man owner to give money to XYZ corp to sign a player to a no work endorsement deal.  For instance, it will be tough for OKC to keep Dort and Hartenstein in a year or two.   What happens if the owner either gave money to someone else or if a rich donor (similar to college football) collected 10-15 million exta per year to keep both players while they sign in OKC for under market deals. 

This seems to open way more shady practices.

[F Gump]

There is nothing to stop rich people from giving free money by the bucket load to a player in their city ... nor to keep them from hiring a player to endorse their company for lots of money. If that's how you want to spend your money, of course. And perhaps there can be value in an endorsement.

I know some people can be obsessed with such players playing on a team they like, beyond getting value back for what money they would give. To me, while I enjoy watching them play and cheering for the good guys, the lathering of more money gratuitously on an athlete already making gazillions to play a game would be a stupid way to spend your money. Let the Ballmers and Adelsons of the world pay their help themselves, they can afford it. But to each his own, I guess.

[Jym]

We'll see what actual proof and hard evidence they find to inflict real punishment
But I don't buy at all that the other owners are prepared to sweep this under the rug and ignore it. No way do they want to set the precedent that the richest owner can just ignore the salary and apron rules
This isn't just going quietly away

[Hooper21]

Now this is an extremely helpful post. 

Mavs please stay quiet less the league search for some violation to hit us with. Dallas it seems to me has sometimes been a good team for the league to make an example of. Let that go to the Clippers this time if that is the result of the investigation.

No such luck.  Cuban already opened his mouth and of course it was to side with Ballmer.  I've seen that the next target for Torre is NY and Brunson.  Obviously not against the Mavs, but still.  I've also seen some comments about Dirk famously taking way less than his max more than once.   I wouldn't be surprised to see the scope come back around to Cuban at some point.  

Jeannie Buss weighed in that Uncle Dennis asked for the same extras from the Lakers and she told him it was illegal.  Unless he changed his approach, I'm guessing Ballmer got the same requests.

[SleepingHero]

@Fullcourtpass
Voiding Kawhi Leonards contract with the Clippers is on the table, per
@sam_amick


“If they can prove that Kawhi was incentivized to not only stay, but to sign team-friendly deals that gave them more flexibility”

[F Gump]

@Fullcourtpass
Voiding Kawhi Leonards contract with the Clippers is on the table, per
@sam_amick


“If they can prove that Kawhi was incentivized to not only stay, but to sign team-friendly deals that gave them more flexibility”

Yes, the CBA can allow a contract to be voided should they find evidence. 

The "if" that he says needs to be proved is the hard part. When Kawhi got this deal, he did not sign a team-friendly deal that gave them more flexibility. Instead, he got a max deal that paid every dollar possible under the CBA.

In his latest extension, it was also a max deal, but the raises were not max raises. That wasn't signed until 2024, however, about 2 years after the "endorsement" deal, and it was his first one signed under the 2023 CBA with its hard cap consequences (which would offer a very real alternate reason why KL might have been willing to moderate his pay). 

In any event, if there's a connection, it sure looks like it might be hard to validate if there's not direct witnesses (instead of "anonymous sources" who won't speak on the record) and emails or other docs supporting the claim that Ballmer/LAC were directly orchestrating all this. The optics are bad, to be sure. But I don't think they have a smoking gun, at least not yet.

The NBA is taking it seriously, however. It's not being ignored or swept under the rug.

Per the Athletic, the NBA has hired law firm Wachtell, Lipton, Rosen & Katz to conduct its investigation.  That's the same law firm the NBA has used to investigate two previous NBA owners: the 2014 allegations against then-Clippers owner Donald Sterling for racially insensitive comments that forced Sterling to sell the team to Ballmer, and the 2022 investigation of then-Phoenix Suns owner Robert Sarver of several inappropriate remarks and behavior, for which Sarver was suspended for one season, and chose to sell the team in response.

One other thing worth noting: Ballmer's interviews sound like a guy who works hard to follow the straight and narrow, but his track record has left question marks. In 2015 he was caught by the NBA doing this sort of illegal side deal, when trying to re-sign De Andre Jordan in 2015, and in the original signing of Kawhi in 2019, there were all sorts of allegations that arose and had to be investigated because of Kawhi's uncle chasing side benefits off the books as part of him signing.

[SleepingHero]

https://www.theringer.com/2025/09/09/nba...cumvention

Where Torre’s investigative report was based primarily on court records and interviews, the NBA can go much further. It can demand emails and texts from the Clippers, which is where any presumed smoking gun would be found. The league also can, and will, interview Clippers executives and any employees who could have knowledge of the matter.

The Clippers’ defense rests upon the assertion that they had no involvement in the contract between Aspiration and Leonard. The burden of proof would seem to be on the NBA to demonstrate the Clippers’ participation in the deal, not on the Clippers to prove their innocence. As we mentioned earlier, Silver is a lawyer by training. He has generally erred on the conservative side in prior investigations, acting only on the proof in front of him.

The NBA might not need a smoking gun. But given Silver’s record and temperament, he would surely prefer one before hammering the Clippers and Ballmer. Without direct evidence, the league could open itself up to a lawsuit. And if the NBA voided Leonard’s current contract (a three-year, $152 million deal), as it did with Smith, Leonard could challenge the ruling via the players association and the courts.

[Jmaciscool]

So dummy question here, but if a player's contract is voided for this scenario, does it still count against the cap?

If it doesn't, then it seems like a scenario could exist where it actually helps a team to void a max contract of an aging player that may or may not be worth it at the cost of 1 FRP and a 4.5M fine.

Not saying that's the case here with the Clips/Kawhi, but just in general it seems like that could have potential of not being as painful as intended depending on the team/player situation that ran afoul of this clause. I'm probably missing/misunderstanding something here though.

[Chicagojk]

I wonder if Derrick Jones got one of those no show endorsements

[F Gump]

I wonder if Derrick Jones got one of those no show endorsements

The question for me more broadly is whether Kawhi got such deals BEFORE the one with Aspiration, and/or after they folded, as well as whether other Clips got such deals (as you allude to). To me, THAT would be the smoking gun, since one single jinky deal is much more easily explained as an aberration that no one knew about and that LAC did not create. Find another, and it changes everything.

[SleepingHero]

The question for me more broadly is whether Kawhi got such deals BEFORE the one with Aspiration, and/or after they folded, as well as whether other Clips got such deals (as you allude to). To me, THAT would be the smoking gun, since one single jinky deal is much more easily explained as an aberration that no one knew about and that LAC did not create. Find another, and it changes everything.

Considering he asked the Raptors in 2019 for several things that were very similar to this Aspiration deal such as asking for up to 15 million match in sponsorship deals and ownership stake in the Toronto Maple Leafs, that already establishes a pattern of behavior with Leonard asking for more than he can/should in FA. 

But I don't think the NBA needs this as a smoking gun or even a pattern of behavior. This just LOOKS bad. The optics alone are enough to call into question the entirety of the NBA. If there is no steep punishment, why wouldn't other teams do something very similar to circumvent the cap? Why have a cap at all? 

Alone, Kawhi and the Clippers have created a situation that pokes holes into the very foundation of the cap and the respect of the rules. And that assumes that we are buying this story that this shell corporation actually duped Steve Balmer by the tune of 50 million, and in that very same month gave Kawhi a 20 mil advance for signing and a 28 mil bogus promotional deal. 

It's ridiculous. I know we throw around hyperbole all the time but Silver is by far and away the worst commissioner of the 4 major sports in America. Since he's come in, the NBA has gotten harder to watch, more expensive to attend, ads on jerseys, and so many scandals that have gotten off easy. If Silver overlooks this it'd be yet another referendum of how he truly doesn't understand how to run the NBA.

[Ghost of Podkolzin]

There is nothing to stop rich people from giving free money by the bucket load to a player in their city ... nor to keep them from hiring a player to endorse their company for lots of money. If that's how you want to spend your money, of course. And perhaps there can be value in an endorsement.

I know some people can be obsessed with such players playing on a team they like, beyond getting value back for what money they would give. To me, while I enjoy watching them play and cheering for the good guys, the lathering of more money gratuitously on an athlete already making gazillions to play a game would be a stupid way to spend your money. Let the Ballmers and Adelsons of the world pay their help themselves, they can afford it.  But to each his own, I guess.

Huh?  This isn't about rich people spending their money on whatever they want.  It's circumventing the salary cap.  Kawhi didn't endorse the company.  That's the point.  He did nothing.  He was given $28m, with another $20m that the company coming if the company not gone belly up,  Meanwhile, Balmer matches funds with his $50m "investment".

So you want owners to be able to pay free agents whatever they want to pay?

[Ghost of Podkolzin]

The question for me more broadly is whether Kawhi got such deals BEFORE the one with Aspiration, and/or after they folded, as well as whether other Clips got such deals (as you allude to). To me, THAT would be the smoking gun, since one single jinky deal is much more easily explained as an aberration that no one knew about and that LAC did not create. Find another, and it changes everything.

So it's only a violation if it's repeated?