The plot continues to thicken after investigative journalist Pablo Torre reported Wednesday that the Los Angeles Clippers might have circumvented the NBA's salary cap by arranging a $28 million no-show endorsement deal between star forward Kawhi Leonard and a now-bankrupt environmental company.
The Clippers have emphatically denied any wrongdoing, but one longtime general manager told Sam Amick of The Athletic that "this (sort of endorsement deal) does not happen." Another executive said, "I've never seen it." However, Clippers governor Steve Ballmer pleaded ignorance about the specifics of Leonard's endorsement deal with Aspiration in an interview with ESPN's Ramona Shelburne on Thursday.
The league office is commencing an investigation into these allegations. From a potential punishment standpoint, the big question is whether Aspiration could count as a "team affiliate" as defined under the league's collective bargaining agreement. Ballmer hinted to Shelburne that it shouldn't, which means the NBA could strip only one first-round pick from the Clippers rather than multiple picks if it finds Torre's reporting to be accurate.
Regardless of whether Aspiration counts as a team affiliate, the NBA also has the option to void Leonard's contract. That might sound extreme, but then-NBA Commissioner David Stern did exactly that with Minnesota Timberwolves forward Joe Smith in an infamous circumvention case in 2000. Not only that, but he also voided Smith's contracts over the previous two seasons, which caused the Timberwolves to lose their Bird rights for him. Smith wound up signing with the Detroit Pistons on a rest-of-season contract, although he returned to the Timberwolves the following summer.
What happens if Kawhi's contract gets voided?
If the NBA does void Leonard's contract and strip the Clippers of his Bird rights, it could send seismic shockwaves across the league.
The Clippers currently have nearly $194.7 million in salary on their books this season, including Leonard's $50.0 million contract. Voiding that deal would leave them roughly $10 million below the $154.7 million salary cap with two open roster spots.
In theory, the Clippers might be able to use that $10 million in cap space to re-sign Leonard. However, it's unclear whether he'd be allowed to play this season if he did re-sign with the Clippers.
“They gave me a choice,” Smith said about his circumvention case in a YouTube interview last year (h/t Jon Krawczynski of The Athletic). “Either I could sign back with Minnesota and miss an entire year, or I can sign with somebody else and then play that year out, and if I wanted to, I could come back to Minnesota."
If that precedent held true for Leonard as well, he would suddenly become the most hotly pursued free agent on the market. There's just one problem: The Brooklyn Nets are the only team with salary-cap space at the moment.
After Cam Thomas took his one-year, $6 million qualifying offer on Thursday, the Nets have roughly $22.6 million in cap room, according to Keith Smith of Spotrac. A handful of teams around the league have yet to spend their $14.1 non-taxpayer mid-level exception, but the Nets could easily offer Leonard more than any other team.
Granted, the Nets are nowhere close to contending for a championship at the moment, even if they signed Leonard. He thus might have to settle for being an underpaid one-year rental before he re-enters free agency in 2026. That's where things could get interesting.
The Denver Nuggets haven't touched their non-taxpayer MLE or their $5.1 million bi-annual exception, but they're less than $2.9 million below the first apron. Using either of those would hard-cap them at the first apron, which would be a non-starter given their current salary structure. But if they had the opportunity to sign Leonard, they might be willing to give up a premium asset to dump Zeke Nnaji's $8.2 million salary.
The Miami Heat also haven't spent a penny of their non-taxpayer MLE, and they're $7.4 million under the first apron. They recently salary-dumped Haywood Highsmith onto the Nets to free up more financial flexibility, but they could ramp up their attempts to dump either Terry Rozier ($26.6 million) or Simone Fontecchio ($8.3 million) if doing so would help them land Leonard.
Here's the most terrifying one: The defending champion Oklahoma City Thunder are $8.6 million below the first apron and haven't touched their non-taxpayer MLE, either. The Thunder would be sacrificing absolutely nothing of long-term value by signing Leonard to a one-year deal. It would be a total non-brainer if that was on the table.
The Golden State Warriors could be a wild card as well. They're $25.0 million below the first apron at the moment, although Jonathan Kuminga figured to gobble up most of that flexibility. Would the Warriors rescind Kuminga's qualifying offer if it meant they had the wiggle room to sign Leonard and round out their roster with veteran-minimum contracts?
Given Leonard's upside and the limited resources available to teams at this point of the offseason, there would likely be an unprecedented feeding frenzy if he did suddenly become a free agent.
What about the Clippers?
If the Clippers couldn't re-sign Leonard and had $10 million in cap space to spend, what could they do with that money? Well, outside of the few restricted free agents on the market (Kuminga, Josh Giddey and Quentin Grimes), the pool has drastically thinned out.
If the Warriors rescinded Kuminga's offer sheet to sign Leonard, the Clippers could try to swoop in to sign Kuminga in his place, although other teams with the full $14.1 million non-taxpayer MLE could outbid them. They could also take a run at Malik Beasley if he gets cleared from any wrongdoing in an ongoing federal gambling investigation. Beyond that, veterans such as Al Horford, Malcolm Brogdon and Russell Westbrook are among the best remaining options.
Leonard's contract being voided could also upend their plans for 2026 free agency. James Harden has a $42.3 million player option that he might be tempted to decline unless the Clippers have another co-star lined up for him, while the Clippers have team options on Bogdan Bogdanović ($16.0 million), Brook Lopez ($9.2 million), Nic Batum ($5.9 million) and Kobe Brown ($4.8 million). The only fully guaranteed contracts on their books for 2026-27 belong to Ivica Zubac ($19.6 million), Derrick Jones Jr. ($10.5 million) and Yanic Konan Niederhäuser.
If the Clippers wanted to re-sign Leonard next offseason, they'd either have to decline a majority of their team options or convince Harden to decline his player option and re-sign for less money. However, the latter route might look suspicious from an optics standpoint, which is the last thing that the Clippers would need if the NBA does find them guilty of salary-cap circumvention with Leonard.
The league could always decide to punish the Clippers without voiding Leonard's contract. Unless there's a clear smoking gun, perhaps this doesn't rise to the level of Smith's under-the-table agreement with the Timberwolves on future contracts. But if the league office does void Leonard's deal, it would be throwing a chaos grenade into the 2025-26 title race.