Clippers-Kawhi Cap Circumvention Case Could Stretch Into 2027

The NBA‘s investigation into the LA Clippers and Kawhi Leonard is showing no signs of wrapping up quickly. According to ESPN‘s Baxter Holmes, the probe could drag into 2027 if the parties don’t agree on the findings or any proposed settlement that involves punishing the team, according to sources with knowledge of the case.

Sources close to the National Basketball Players Association said the union would not hesitate to take the matter to arbitration if the NBA sought penalties without sufficient evidence proving the LA Clippers compensated Leonard outside his contract — a claim the team has denied since the league’s probe began nearly 10 months ago. On July 9, NBPA executive director David Kelly told reporters in Las Vegas that he did not believe there was « a there, there » regarding whether the Clippers compensated Leonard through the $28 million endorsement deal. Asked if he believed New York law firm Wachtell Lipton — which is directing the NBA’s investigation — had uncovered anything worthy of punishment, Kelly replied, « Not from anything I’ve seen. »

One source with knowledge of the investigative process cautioned against the idea that outside parties have inside knowledge of Wachtell‘s findings, or that the length of the probe signals anything about what the firm has or hasn’t found. NBA commissioner Adam Silver said on July 14 that the case was a complicated process involving bankruptcy courts and reluctant witnesses.

A $28 Million Deal at the Center of the Controversy

The investigation centers on the $28 million endorsement deal Leonard signed in 2022 with the now-bankrupt green banking company Aspiration, which also had a separate $300 million, 23-year endorsement deal with the Clippers. The allegation, which first surfaced in September 2025 following a series of podcasts from former ESPN contributor Pablo Torre, is that the arrangement was used to funnel additional compensation to Leonard outside of his actual NBA contract, circumventing the salary cap.

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The Clippers remain adamant that they did not funnel money to Leonard through Aspiration. One source close to the team said the organization would « fight that to the end, » including through arbitration if necessary.

Beyond the core allegation, the investigation has reportedly widened in scope. The Athletic recently reported that Wachtell has expanded its inquiry to look into a previously unreported endorsement deal Leonard had with another company, as well as expenses the Clippers covered for Leonard for which the team was not reimbursed.

How the Arbitration Process Would Work

If the Clippers and the NBPA cannot reach an agreement with the league, the matter would head to a neutral arbitrator jointly appointed by the NBA and the NBPA. That arbitrator could compel document production, witness testimony, and order discovery. Following a hearing, the arbitrator’s ruling would be subject to review by a three-person appeals panel jointly appointed by the NBA and NBPA, whose decision would be binding. This process applies here because salary cap circumvention is a violation of the NBA’s collective bargaining agreement.

Under the league’s 2023 collective bargaining agreement, penalties for cap circumvention can include team fines of up to $7.5 million, forfeiture of draft picks, the voiding of a player’s contract, and suspensions of up to a year for team personnel found to have been involved.

On July 14, Silver told reporters the investigation « needs to be wrapped up before the beginning of next season, » acknowledging it had gone on « longer than I would have hoped. » He added: « On one hand, we want to respect everyone’s rights here. Certainly, if any of us were being investigated, we would want a certain standard to be met, a standard of due process with presumption of innocence, etc. And at the same time, we want to be able to answer to our teams and our fans and to all of you that this is comprehensive and that to the best of our ability, we’ve discerned what actually happened in this situation. »

A Stalled Trade Raises the Stakes

One factor adding urgency to the case is the proposed trade between the Clippers and the Toronto Raptors that would send Leonard back to his former team in exchange for Brandon Ingram, Gradey Dick, unprotected first-round picks in 2031 and 2033, a 2027 first-round pick swap, and two second-round picks. The Clippers and Raptors agreed to the trade on June 30, but nine days later both teams announced the deal was on hold, saying they had learned from the league office that Toronto would be taking on the risk for any penalties Leonard might face — including a possible suspension or the voiding of his contract — as a result of the investigation. Both franchises have stated they still intend to complete the deal, though it remains unclear how an arbitration process might affect their ability to do so.

Sources who have worked with Silver for years say they do not expect him to be swayed by public pressure either way in this case. As one source put it, if the league ignored evidence implicating the Clippers, the cover-up would become the story; if it sought punishment without evidence, the overreach would become the story. That source expressed full confidence that Silver would « play it straight, » based strictly on the facts, as the commissioner has said he intends to do throughout the inquiry.