As charges mount for Clippers, don’t expect punishment to include voiding Kawhi Leonard’s contract

It has been clear for a year or more that the Los Angeles Clippers knew they were fast approaching the end of the Kawhi Leonard/James Harden era. The Clippers have been looking to pivot, and the report this week of the Clippers’ frustration with Leonard fit the existing pattern. It’s not a coincidence that the team is set up to have massive cap space in 2,027 just when Giannis Antetokounmpo, Nikola Jokic and Karl-Anthony Towns (among many others) could become free agents.

That pivot was clearly coming long before accusations started to mount against owner Steve Ballmer and the Los Angeles Clippers — including new ones that dropped Thursday from the Pablo Torre Finds Out podcast (more details on that below) — that the team was trying to circumvent the salary cap. Those allegations allege that Ballmer and minority Clippers owner Dennis Wong invested in “green bank” company Aspiration (a Clippers team sponsor), which also signed Leonard to a $48 million endorsement deal. Except there is no evidence Leonard actually did anything to earn that money, making it a “no-show” deal — a way for the Clippers to circumvent the cap.

In the wake of all the evidence in recent weeks, the topic has shifted in part to potential punishments, because it feels like some punishment is coming (once the league’s official investigation ends, which likely runs into the middle of the NBA season). The league can fine the Clippers and Ballmer, but only up to a maximum of $7.5 million — Ballmer earned more than that in interest during the time it took you to read this sentence. The league can suspend Ballmer and/or a Clippers executive for up to a year. The league can take away some of the Clippers’ future draft picks (the most painful punishment to the franchise).

Also, the league can void Leonard’s contract and make him a free agent. Don’t expect that one, in part because the Clippers would be good with it.

Latest accusations against Clippers

In his defense of Ballmer and the Clippers, Mavericks minority owner Mark Cuban had said that rather than investments and team sponsorships (both of which happened), the easiest way the Clippers could have helped “green bank” company Aspiration was to buy carbon credits from them (which is what the company was fraudulently selling).

Pablo Torre Finds Out released evidence Thursday that the Clippers did just that. Torre has a bank letter signed by the team’s Chief Financial Officer — as well as sources inside Aspiration — that say the Clippers fast-tracked a $21 million deal for carbon credits, weeks before the first payment of Leonard’s endorsement deal. This is while the Intuit Dome was under construction.

Together, Ballmer and the Clippers invested $118 million in Aspiration. Leonard had a $48 million endorsement deal with the Aspiration ($20 million of that was in now-worthless stock of the bankrupt company), for which there is no evidence he did any work.

Ballmer and the Clippers released a statement both to the podcast and in general about the purchase of these credits, emphasizing that making the new Intuit Dome a green building was very important to Ballmer, and he believed that dealing with Aspiration helped achieve this goal. It’s the same idea as when he said he and other investors were “duped” by the company. Here’s the statement the Clippers sent to Torre’s podcast:

“Our development agreements for the arena included mandates to buy carbon credits, but after studying the issue of neutrality, we went far beyond those requirements, exploring ways to address emissions from our fans and contracting with Aspiration to directly purchase carbon offsets, as well as broker the acquisition of additional offsets. Some of those commitments were built into the sponsorship deal with Aspiration — totally separate of the investment in the company — and we made payments to Aspiration until the company was unable to fulfill their responsibilities.”

Leonard’s contract

This latest accusation about carbon credits just adds to the tsunami of circumstantial evidence that has seemed overwhelming. NBA Commissioner Adam Silver said the burden was on the leagueto prove the Clippers violated the CBA and appears to want direct evidence that Ballmer intentionally tried to circumvent the salary cap, which is not going to exist (Ballmer would never have signed something so incriminating). Silver seems more willing to talk about league rule changes around investments and endorsements than punishments, but at this point it feels like the Clippers have to get more than a slap on the wrist.

Could that include voiding Leonard’s contract? (Leonard is set to make $50 million this season and $50.3 million next season.) Under the terms of the CBA, yes it could. Silver has that power.

Just don’t expect him to exercise it.

As noted in the first paragraph of this story, the Clippers recognize reality, and while they put together a good, veteran team on paper for this season — one better than their 50-win team from last season — it is not a contender. How big a playoff threat it can be depends on two unreliable things: Leonard’s health and Harden’s playoff performance.

Void Leonard’s contract, and the Clippers will have max cap space next summer. They could then chase a star through free agency or a trade, pivoting by the fall of 2026. That would be just fine with the Clippers.

Second, as John Hollinger notes at The Athletic, the NBA’s formal investigation is likely to conclude in the middle of the season. Void Leonard’s contract at that point and there would be a mad scramble from playoff teams willing to take on the risk of adding him short-term, but none of them would have any more than a veteran minimum or something close to it to offer. As Hollinger notes, Leonard fought to get home to Los Angeles in the first place, would he consider signing with the Lakers for the minimum (which, right now, they can’t even offer until mid-January due to being hard-capped at the first tax apron)?

One thing Hollinger suggests that is interesting: Silver putting the money from Leonard’s endorsement contract on the Clippers’ books, making them pay a luxury tax bill for it.

That is a long shot, but more likely than Silver voiding Leonard’s contract. The most likely scenario is the Clippers get fined, lose a first-round draft pick or two, and maybe a Clipper executive gets suspended (but not Ballmer before his new Intuit Dome hosts the All-Star Game in February). Maybe it’s more than that, but at this point it all comes down to the league’s investigation, which is ongoing and will be for a while.