By Aaron Persily | October 30, 2026
On September 2nd, 2026, the Los Angeles Clippers were found guilty of salary cap circumvention that was in direct violation of the collective bargaining agreement (CBA) with the NBA. Essentially, the Clippers helped Leonard with multiple different endorsements totaling more than 28 million dollars.
The NBA conducted this investigation, but it began with investigative reporting by reporter Pablo Torre. Torre found a connection between Leonard, the Clippers owner, Steve Ballmer, and the company Aspiration, which paid Leonard a sum of 28 million dollars. It's problematic for the Clippers to help facilitate endorsements for companies in which they have a stake because it not only violates the CBA, but it's also fundamentally wrong: it gives the Clippers more bargaining power in contract negotiations with Leonard through those endorsements. This investigation from Torre has been ongoing for years, and it was only recently that the NBA started paying attention to the allegations.
It is important to note that this is not the first time the Clippers have been caught in major controversy this century. In 2014, TMZ uncovered a recording of former Clippers owner Don Sterling saying multiple racist comments over the phone. This recording incited a boycott from many different NBA teams, including the Clippers players. As a result of the players' threat not to play in the playoffs, commissioner Adam Silver forced Sterling to sell the team. Former Microsoft executive Steve Ballmer bought the team in 2014 and ushered in a new era of Clippers basketball. During Sterling’s tenure as the owner of the Clippers, they were largely unsuccessful, and he did not pour money into the team. Since Ballmer has taken over, he has built a new arena and created a new culture of winning in LA. Ballmer’s most significant moment as an owner was when he landed superstar Kawhi Leonard coming off of an NBA championship. Leonard chose the Clippers over organizations such as the Lakers and Warriors. Since Leonard’s arrival, the Clippers have still not won the NBA championship. Still, with Leonard's status as a premier superstar in the NBA, the Clippers were willing to do anything to retain him.
Torre’s investigation led the NBA to open an investigation of its own. The NBA found that the Clippers initiated improper endorsement opportunities for Leonard with four companies with which they were involved. These companies paid multiple expenses directly to Leonard and his team. The actions violated the salary cap and gave Leonard more money than was allowed.
This is not the first time someone has broken the rules of the NBA’s CBA. In 2000, the Minnesota Timberwolves also broke the CBA by promising Joe Smith extra incentives to sign one-year deals. The Timberwolves lost their 5 first-round picks, and their GM and president were suspended. Hence, these punishments have precedent.
The league's punishments were a $30 million fine, the loss of the next five first-round draft picks, and a one-year suspension for two senior executives. The league maxed out the penalties it could give to an organization to show that it is not ok to break the NBA’s rules under the existing CBA.
The Clippers' first reaction was to appeal the ruling by the NBA. They called the investigation “heavily biased” (ESPN, 2026). However, there is not much wiggle room for the Clippers in the appeal process. There is not much precedent for this type of case, as it is not a matter of legality but rather a violation of the NBA’s own rules. The main dispute over this issue is not exactly sports law, but rather an organization violating the NBA's CBA. Lessons from this case include issues related to NIL and overall negotiations between teams and players. Ballmer’s efforts to keep Leonard proved to be consequential, and the Clippers’ future over the next decade is now in jeopardy.
