The Clippers are about to be in very, very hot water — assuming new allegations against the organization are true. Investigative reporter Pablo Torre claims the team has been involved in a shell corporation scheme which has been paying superstar Kawhi Leonard under the table, and more importantly off of the salary cap for years.
It stems from the bankruptcy of Aspiration Partners, a technology and sustainable growth company which brokered carbon emission credits for large companies like Meta and Microsoft. In Aspiration’s bankruptcy filings they were forced to include their outstanding debt, which included a $7M payment to “KL2 Aspire LLC,” a company whose manager is listed as Kawhi Leonard, and the company name obviously refers to Leonard’s initials, and his jersey number.
It’s here that Torre began digging into the payments, and asking questions around the company. Seven former employees agreed to speak to him, and he obtained documentation of the agreement between Aspiration Partners and Kawhi Leonard — which stated that Aspiration would pay Leonard a total of $28 million, scheduled in four yearly payments of $7 million.
Aspiration Partners had a large roster of celebrities who offered endorsements for the company, including Drake and Robert Downey Jr. However, in those cases both had clear online histories or posting about Aspiration Partners on social media, or filming commercials for the company. Kawhi Leonard has no history of ever mentioning the company, according to Torre, which made the $28M agreement highly suspicious.
Then came the bombshell. A former Aspiration Partners employee who worked in the finance department went on the record under the condition an anonymity to discuss how they were informed that Leonard was a “big player” among the company’s agreements, and told to not ask any questions about the deal — because it was explicitly organized by the Los Angeles Clippers to circumvent the salary cap. It should be noted that Clippers owner Steve Ballmer was a major investor in Aspiration Partners to the tune of roughly $50M.
This information is the smoking gun. The deal paid Leonard from 2022 onwards, with the final payment set to be made in 2026. So what exactly did the Clippers gain from opening up an additional $7M over this time? Essentially it sweetened the pot on Leonard’s max contract to incentivize him to re-sign. Kawhi joined the Clippers in 2019 after winning an NBA championship with the Toronto Raptors — the express purpose of this deal was to help LA establish a superteam around him that would contend for multiple championships. Crucially, however, Leonard put a timeline on this plan with his contract having an opt-out clause after the 2020-2021 season, which Leonard executed and he was set to become a free agent.
Now look at this from the Clippers’ side. We’re approaching the 2022-23 season. The team has Paul George on a max contract, then a handful of solid, but unremarkable players. If Kawhi walks they’re screwed. There’s not much that’s attractive about the Clippers for a top-tier free agent to join, and the entire future of the basketball operations had been organized around Kawhi and PG13. They’re hoping to find a third superstar to get them over the top, and losing one of their big two sets them back to the start.
Then Leonard re-signs with LA on another max-level contract to keep the band together. On paper it’s only set to pay him $3M more than he was making with the team. However, if we factor in the possibility that he had a side arrangement with Aspiration Partners now he’s making a nice, round $10M more a season to stay with the Clippers. An arrangement which conveniently lasts exactly as long as the extension he signed with the Clippers.
Now the question becomes: How bad could it get for the Clippers? In two words — extremely bad.
The last example we have of a team getting caught for overt salary cap subversion was Joe Smith with the Minnesota Timberwolves back in 1999-00. In that case he signed three veteran minimum deals for less than $3M each, with the organization paying him under the table so they would have salary cap flexibility. The NBA levied a massive punishment against the Wolves, fining them $3.5M, voiding Smith’s contract, and taking away Minnesota’s 1st round draft pick for the next five years as punishment. The penalty is a huge reason why the Wolves struggled to build a championship-level team around prime Kevin Garnett.
That was the penalty for circumventing the cap for a player who wasn’t a star, wasn’t even a starter at the time.
If we assume the Clippers get the exact same penalty as the Timberwolves got 25 years ago then things are very, very bad in LA. As it stands the Clippers have traded away their first round picks in 2026 and 2028. If they lose five firsts then they won’t be picking in the first round of the draft until 2033 at the earliest. Keep in mind this is also an organization living on borrowed time, with James Harden being 35 years old, Leonard being 33, Bradley Beal at 32 years old, and Nicholas Batum at age 36. There is a very real chance that this team falls off a cliff in the next 3-to-4 years, and at that point they would still be waiting another four years to make a pick in the first round if the NBA decides to punish them in a similar way to the Wolves’ punishment for the Smith fiasco.
There has been no word from the NBA yet on a possible investigation into the Clippers. If that happens and they’re found to have subverted the cap then LA could be thrust into irrelevancy for a decade.
