The NBA Sent A Clear Message With Clippers’ Kawhi Leonard Circumvention Ruling

The NBA’s Definition Of Circumvention

Before diving into Wachtell’s findings, let’s first pause to recap what the NBA defines circumvention as.

The league’s CBA prohibits teams or “team affiliates” from entering “into an agreement or understanding with any sponsor or business partner or third party under which such sponsor, business partner, or third party pays or agrees to pay compensation for basketball services (even if such compensation is ostensibly designated as being for non-basketball services) to a player under contract with the team.” Such deals “may be inferred” when the compensation “is substantially in excess of the fair-market value of any services to be rendered by the player” and/or the player signs a contract with the team that is “substantially below the fair-market value of such contract.”

In January 2024, Leonard signed a three-year, $149.5 million extension with the Clippers that was roughly $10 million less than the maximum amount he could have received. He missed the entire 2021-22 season because of a torn ACL and played only 52 games in the 2022-23 season due to injuries, so his injury history could have ostensibly justified his below-max contract. At the time, it also looked like a potential blueprint for Big Threes in the punitive second-apron era moving forward.

Any violations of that section of the CBA could result in fines of up to $5.5 million, the loss of one first-round pick and the player’s contract being voided. But as we detailed in September 2025 when these allegations first arose, that isn’t the only type of circumvention that’s spelled out.

The more severe kind of circumvention revolves around “agreements of transactions of any kind (whether disclosed or undisclosed to the NBA)” that involved a team or “team affiliate” providing “compensation or consideration of any kind or anything else of value, to be paid, furnished, or made available by, to, or for the benefit of the player.” A team affiliate is defined as “any entity as which a team owner” either “holds (directly or indirectly) more than 5% of its ownership interests or participates in or influences its management or operations.”

If teams are found guilty of that, they can be fined up to $7.5 million, lose multiple first-round picks and have any affiliated executives receive up to one-year suspensions. ESPN’s Brian Windhorst suspects the NBA imposed that $7.5 million fine “for all four companies it believes the Clippers conspired with to circumvent cap rules, resulting in a compounded fine of $30 million.”

Dating back to the beginning of this saga, the main question revolved around whether Aspiration—the environmental company at the forefront of Torre’s reporting—or any of these other companies would qualify as “team affiliates.” During his interview with ESPN’s Ramona Shelburne when these allegations first arose, Ballmer specified that he had “no control” over Aspiration and owned “less than 3% of the company,” which appears to have been his attempt to steer the NBA away from the more severe penalties.

However, that section of the CBA ends with the following: Teams and players cannot “attempt to enter into or intentionally solicit any agreement, transaction, promise, undertaking, representation, commitment, inducement, assurance of intent or understanding that would be prohibited.” That may be what tripped the Clippers up.

Where The Clippers Allegedly Erred With Kawhi

According to the Wachtell report, the Clippers “advanced a novel theory addressing one part of the conduct at issue here: that NBA rules permit affirmative (not responsive) introductions of players to business partners for the purpose of helping them generate off-court income if such introductions are requested by the player or his representative.”

However, that’s hardly the scope of what the Wachtell investigation uncovered.

According to the summary report, Zucker made “a series of email ‘introductions’” in June 2020—while the NBA was shut down amidst the COVID-19 pandemic—between Leonard’s uncle and business manager, Dennis Robertson, and “executives at three companies with which the Clippers were in active conversations about potential business relationships.” Within two months, Leonard signed deals totaling $18 million with those three companies, none of which were publicly announced and all of which were far beyond the usual “financial magnitude” of their typical endorsement agreements.

Why would those companies agree to such “highly unusual” deals? “Because the Clippers initiated, facilitated and induced these companies to enter into agreements with Mr. Leonard through the prospect of lucrative business agreements with the Clippers,” the summary report concluded.

According to the report, one of those three companies was Daktronics, which was bidding to provide the Jumbotron for the Clippers’ new Intuit Dome. Daktronics “believed that failing to enter into a commercial relationship with Mr. Leonard could jeopardize its ability to win the bid for the Intuit Dome,” the report added.

The report also notes that the reaction among Aspiration’s C-suite executives to Leonard’s proposed four-year, $28 million sponsorship deal with the company “was swift and uniformly negative.” Joe Sanberg, the co-founder of the company, allegedly told the executives that “the team would provide additional business back to Aspiration to help offset the financial impact on Aspiration.”

Even if the NBA does not have conclusive proof that Ballmer and the Clippers funneled money through Aspiration, Daktronics, Boingo Wireless or Lockton, it doesn’t necessarily need it to dole out the punishments that it did. The CBA specifies that those violations “may be proven by direct or circumstantial evidence, including, but not limited to, evidence that a player contract or any term or provision thereof cannot rationally be explained in the absence of conduct violative” to that section on circumvention.

So, what does this all mean for the rest of the league? In short, teams cannot entice business partners to offer sponsorship deals to players by offering them additional business opportunities. Additionally, players must provide services commensurate with the value of their sponsorship deals, lest they risk the wrath of the NBA.

Granted, Leonard got off fairly easy here. He has to pay the league $700,000 “in connection with his violations,” but if his agreed-upon trade to the Toronto Raptors goes through, he’ll get out of L.A. just as the NBA imposes its version of a draft-pick death penalty on the Clippers. This punishment could serve as a warning shot to both players and teams, though.

Given the severity of what the Wachtell investigation uncovered, the NBA had little choice but to lay down the hammer on the Clippers here. If players and teams were emboldened to pursue secretive sponsorship deals that required little to no actual work, it could blunt the financial pain of them taking below-max contracts. That would provide an unfair advantage over teams that are being forced to make difficult roster decisions for financial reasons due to the punitive second apron.

With that in mind, the NBA had to make an example out of the Clippers. That’s exactly what it wound up doing.

Unless otherwise noted, all stats via NBA.com, PBPStats, Cleaning the Glass or Basketball Reference. All salary information via Spotrac and salary-cap information via RealGM. All odds via FanDuel Sportsbook.

Follow Bryan on Bluesky.