Nearly a year after the first reporting of alleged salary cap circumvention by the Los Angeles Clippers with Kawhi Leonard, the saga has taken another twist.
Pablo Torre released the newest findings from his investigation into the Clippers and Leonard on Thursday, which included a second endorsement deal the Clippers allegedly used to funnel money to Leonard with jumbotron manufacturer Daktronics.
“This was talked about openly within the organization, from people working on the project, that Kawhi was a spokesperson for Daktronics,” a “high-level” Clippers source described as a “former official” told Torre in the podcast episode released Thursday night. “It was openly joked about, within people working on the project that knew about this, as it was one-thousand percent a way to circumvent the salary cap.
“People at Daktronics, people within the Clippers’ organization themselves, had told me about this multimillion-dollar deal with Kawhi and Daktronics,” the Clippers source further explained. “They’re not a company that you would see a celebrity endorser for. It wasn’t coming out [Daktronics’] end. The Clippers were technically kind of funding it. It was funneling money from the Clippers through Daktronics back to Kawhi.”
Kawhi Leonard had second secret endorsement deal Clippers allegedly used to circumvent salary cap, per report
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This could be what caused the NBA’s investigation to reportedly “grow in scope” and drag out well into the summer. Most anticipated a resolution before the new league year began, particularly after the Clippers and Raptors agreed to a trade sending Leonard back to Toronto. However, that trade is now on hold and reports indicate the investigation could drag on well into next season.
There has been no shortage of drama throughout this saga, but this newest twist raises a few major questions going forward for the Clippers, Leonard and Raptors.
1. How bad can things get for Steve Ballmer and the Clippers?
Clippers owner Steve Ballmer has been adamant throughout the investigation into the Aspiration deal that he was defrauded by Joe Sanberg, Aspiration’s co-founder, like many other investors, but the Daktronics deal makes it difficult for Ballmer and the Clippers to feign ignorance or play the victim.
A second deal creates a pattern of behavior that can’t be easily explained away. The circumstances around Aspiration’s shuttering were both a blessing and a curse for the Clippers. On one hand, the bankruptcy and court filings created the paper trail that led to the discovery of Leonard’s deal, but because of the fraud involved, they gave Ballmer an avenue to attempt to wriggle his way out of severe punishment by creating murky waters around how much he knew.
The Daktronics deal is perhaps even more damning for the Clippers. This is with a company that has dozens (if not hundreds) of sports partners but has no other public-facing sponsorship deals with athletes. Somehow, it was Leonard who got a revealed multi-million-dollar endorsement deal right as the Intuit Dome is being built to do… nothing.
Provided the league-sponsored investigation confirms the details presented by Torre’s reporting, it’s hard to imagine the NBA won’t be forced to bring the hammer down on Ballmer and the Clippers. The last flagrant cap circumvention case involved Joe Smith in Minnesota in 1999, and Timberwolves owner Glen Taylor was hit with a year-long suspension and the team was fined $3.5 million and lost five first-round picks (with two ultimately being returned).
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That’s the precedent set nearly 30 years ago and if everything that’s been revealed is verified in the NBA’s investigation, it’s hard not to see that as the minimum baseline for what’s coming for Ballmer and the Clippers. Financially speaking, it’ll be hard for the NBA to really hurt Ballmer. Given that the richest owner in the league was allegedly willing to funnel tens of millions of dollars to circumvent the salary cap with Leonard, it’s hard to imagine there’s a dollar amount the league could fine Ballmer that would earnestly hurt him.
What would be more damaging to Ballmer would be crippling the franchise’s ability to compete — and forcing him to take a lengthy leave of absence from any involvement with the organization. Ballmer is among the most visible owners at games, sitting courtside on the baseline at most games while cheering wildly for the Clippers. A long suspension for Ballmer, plus restrictions for the Clippers in the draft and elsewhere, would be far more punitive to the league’s richest owner than even a $10 million fine would be.
2. Will Kawhi Leonard’s contract get voided? What additional punishment could he face?
What’s fascinating about this case compared to the Smith deal is that Leonard is entering the final year of his contract rather than just about to start a new deal that the league flagged — if anything, the Gary Trent Jr. contract in Milwaukee, which is also under NBA investigation, feels much more closely aligned with the Smith scandal.
Voiding Leonard’s deal seems likely given past precedent. That would cost Leonard $50 million, but the NBA will also have to consider taking things a step further with a suspension. If Leonard hit the free agent market right now, he’d have calls from every team in the league trying to sign him, with some, like the Raptors and Warriors, able to offer him the $15 million mid-level exception. Would the league consider Leonard losing out on $35 million enough of a punishment, or will they want to make an even bigger example out of him, given the apparent brazen nature of the cap circumvention at play?
Exactly how hard the NBA comes down on Leonard will depend on how much the league can prove he knew about the ties between the Clippers and these various endorsement deals. Leonard has already moved to create a degree of separation by hiring new representation in agent Harrison Gaines for his planned negotiations for an extension in Toronto, leaving his former agent Mitch Frankel and sidelining his uncle Dennis Robertson (who allegedly pushed hardest for these deals).
Robertson seems like the easiest fall guy for Leonard, and the NBA’s most famous uncle may get barred from being involved in any official league business or representing Leonard in any negotiations. Frankel’s role is less clear, but he too could face punishment — although Leonard was his last active NBA client.
3. How much could this hurt the Raptors?
This will all come down to the timeline of the investigation and what happens with Leonard.
Many were curious why the Raptors suddenly pressed pause on the trade when the league’s investigation into Leonard and the circumstances surrounding it were public knowledge for almost a year. Now we know it’s because the investigation expanded, and with a second questionable deal added to the mix, the likelihood of severe punishment for the Clippers and Leonard has increased. If Leonard’s contract getting voided is a serious possibility, the Raptors were wise to put the trade on hold.
If they had completed the trade and Leonard’s contract had been voided, they would have lost Brandon Ingram, Gradey Dick and the picks they were sending to L.A. and they would have had to figure out what their options were with Leonard. Now, if Leonard’s only punishment is his contract being voided, there’s a path for the Raptors to keep those draft assets, find another trade for Ingram (or keep him) and simply sign Leonard to the mid-level as the best value signing of the summer this side of LeBron James on the minimum. Given the Raptors were one of the only teams on Leonard’s list of teams he’d sign an extension with, they would seemingly be the frontrunners to sign him if he suddenly became a free agent — and are among the handful of teams that still have the full mid-level at their disposal.
As the Kawhi Leonard investigation drags on, it’s time to wonder if his trade to the Raptors will fall apart
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If Leonard gets his contract voided and is suspended for the season, things can get awkward in a hurry for the Raptors. Bringing back Ingram seems like a tough sell after trading him, but finding a trade for him at this point would likely require them to take back pennies on the dollar compared to landing Leonard. If that’s in conjunction with signing Leonard, then anything they get back for him is a cherry on top. If it’s in place of a Leonard acquisition, it’s a tough pill to swallow.
Perhaps there’s a world where they can mend fences — maybe Ingram is the rare professional athlete to understand why a team wanted to trade him for a player like Leonard — but the more likely option is a scramble to find a trade. What makes that even tougher is the potential for this investigation to drag on into 2027, given the likelihood that any punishment handed down will be appealed and sent to arbitration.
Would the Raptors be willing to stay on hold with that trade all the way into the season, or would they pull the plug completely and look to either bring Ingram back in the fold or find a new trade partner? For now, they can remain patient and hope for a resolution before training camp. But if there’s no end in sight by the end of September when it’s time to get ready for camp, they’re going to have to make a really difficult decision.
