Potential Clippers penalty could create a free-agent frenzy

Kawhi Leonard received a $28M endorsement deal plus $20M in stock from a company months after Clippers owner Steve Ballmer invested $50M with the same company. If the NBA investigation finds the arrangement was illegal, there's a strong chance the punishment could be severe.

Article XIII of the NBA's Collective Bargaining Agreement forbids teams from having a sponsor compensate a player "substantially in excess of the fair market value of any services to be rendered by the player." 

Leonard's $28M deal which required no activities or publicity whatsoever would seem to qualify, especially as the company in question, Aspiration, was the Clippers' jersey patch sponsor.

Possible penalties

The CBA specifies the penalties for salary cap circumvention, and they are severe. The commissioner can fine the Clippers up to $4.5M, direct the forfeiture of a first-round pick and "void any player contract, or any renegotiation, extension or amendment of a player contract." 

For Ballmer, the NBA's richest owner, a fine of $4.5M would be a drop in the bucket. Similarly, forfeiting a first-round pick wouldn't be ideal, but the Clippers haven't valued picks very highly in the Ballmer era. They've kept only two first-round picks in the last seven drafts. The Clippers have traded their first-rounders in 2026 and 2028 and owe swaps on their 2027 and 2029 picks.

But voiding Leonard's contract would be a very big deal. It would also mean that a team with cap space could potentially get the superstar on a huge discount.

Teams with cap space

Should Leonard's contract be voided mid-season, which is a distinct possibility, then he'd become a free agent, No one would be able to pay Leonard the $50M he's already making, but a team with salary-cap space or exceptions remaining could make the dramatic mid-season move.

It's unlikely that it's a team like the Charlotte Hornets or Brooklyn Nets, despite their available money, but the Indiana Pacers still have their mid-level exception remaining and could offer Leonard over $13M. They're missing Tyrese Haliburton for the season, but this team was a game away from an NBA title.

The team that beat them, the Oklahoma City Thunder, could offer Leonard the $8.5M remaining of their own mid-level. Should Leonard want to take his talents to South Beach, the Miami Heat still have $7.3M in exceptions to spend.

The NBA investigation could be devastating for the Clippers, but it could also be quite a boon for a lucky team. They just need to avoid making any shady side deals with Leonard as part of their sales pitch.