Are the Clippers completely losing Leonard? Potential NBA penalties revealed: contract voided + prohibition on re-signing

On September 17th Beijing time, renowned NBA analyst John Hollinger offered further insights into the shadow contract case involving Leonard and the Clippers. If the NBA ultimately confirms violations, what consequences will the Clippers and Leonard face? Here is Hollinger’s detailed analysis —

What would be the outcome if the NBA delivers a heavy blow to the Clippers?

This is the key question this week — although the answer may not be revealed for months. Currently, increasing indirect evidence suggests the Clippers may have blatantly circumvented the salary cap: they are suspected of using a now-bankrupt company, “Aspiration,” to provide a “nominal endorsement contract” to All-Star forward Leonard, thereby bypassing salary restrictions.

First, it must be emphasized that so far, there is no conclusive evidence directly linking Clippers owner Ballmer or minority shareholder Dennis Wang’s investment in Aspiration to payments made by the company to Leonard — even though the timing and amounts of the investment raise obvious suspicions. The league’s investigation is ongoing, but unless a check from Ballmer to Aspiration explicitly states “salary cap circumvention,” league lawyers will face a difficult judgment on the case’s ultimate persuasiveness.

That said, we now have grounds to consider the possibility of “severe penalties.” If the league convinces an independent arbitrator that the Clippers circumvented the salary cap through an “unauthorized agreement,” under Chapter 13 (page 341) of the collective bargaining agreement, the Clippers will face heavy sanctions.

Clearly, if the Clippers are proven to have committed such salary cap violations, the league’s president office will not hesitate to impose strict penalties — in fact, the other 29 team owners would demand no less.

It is important to clarify here: rumors suggest that even if the Clippers are found guilty, the league might go easy because other teams may have done similar things. Based on my seven years working in the league — the answer is no, absolutely not.

There are indeed some “routine violations” in the league, such as starting free agent talks a few days or weeks early, but this case is on a completely different level. It is a serious breach, and nearly all league executives believe the involved parties should receive the harshest punishment.

Last week, NBA commissioner Adam Silver personally stated he has “extensive authority” in cases like this. While he did not mention “medieval torture,” he clearly referred to three types of penalties: fines, draft pick forfeiture, and suspensions. These punishments are all explicitly stated in Chapter 13 of the CBA, but we need a more detailed analysis: if Silver cracks down hard on the Clippers, what exactly would that “heavy blow” look like? What are the limits of penalties? What would it mean for the Clippers, Leonard, and the league as a whole?

Chapter 13 clearly outlines the penalties for salary cap circumvention, though some implementations may be controversial for reasons explained below. Here is Silver’s “penalty menu” at his disposal:

Fine the Clippers up to $7.5 million

Fine Leonard up to $350,000

Strip the Clippers of draft picks

Suspend Ballmer or other Clippers executives for up to one year, with fines up to $1 million each

Void Leonard’s contract and ban him from re-signing with the Clippers

Require Leonard to return payments received from Aspiration

Some penalties are straightforward to enforce. For example, fining individuals within the Clippers organization can be done without the arbitrator needing to validate the league’s findings. But the problem is that a $1 million fine for Ballmer is like an ordinary person paying a parking ticket — negligible; similarly, a $7.5 million fine for the Clippers is less than 4% of the team’s total payroll and is just a minor tax adjustment for Ballmer.

Regarding “draft pick forfeiture,” we can refer to the 1999 “Joe Smith case” as precedent to predict the league’s actions. At that time, the NBA penalized the Minnesota Timberwolves for salary cap circumvention by stripping five first-round picks — and most observers considered the Wolves’ violations far less severe than the current accusations against the Clippers.

However,the league can only take away a maximum of five first-round picks from the Clippersbecause the Clippers currently have only five first-round picks eligible for penalty (including their own picks in 2030, 2031, and 2032, plus swap rights in 2027 and 2029). Additionally, the league might confiscate two untraded second-round picks (2031, 2032), and part of Memphis Grizzlies’ 2026 second-round pick (only if it falls between picks 31-42, allowing the Clippers to receive it). Similar to the Joe Smith case, if the Clippers operate compliantly afterward, the league may restore some of these picks after several years.

Incidentally, the Clippers’ draft pick swap partners in 2027 and 2029 (Thunder, Nuggets, 76ers) will not be affected by this penalty. In 2027, the Clippers must give up the lowest first-round pick among themselves, Thunder, and Nuggets; in 2029, the lowest between themselves and the 76ers — with the 2029 swap protected for picks 1-3. If the Clippers secure a top-3 pick that year, that pick will be forfeited, which will be an unexpected benefit for teams just behind the Clippers in the lottery, while the 76ers will retain their original pick order.

Suspending Ballmer and other Clippers executives for up to one year would put the Clippers in an awkward position when hosting the 2026 NBA All-Star Game — since the team owner might be under suspension. However, this penalty also has precedent: in the Joe Smith case, Timberwolves owner Glen Taylor was suspended for nine months.

Next, let’s discuss the most critical, complex, and puzzling penalty: voiding Leonard’s contract.From the nature of the violation, this is the most direct punishment, but it is also the most controversial for other teams in the league.

The controversy mainly stems from two aspects:

For the Clippers, is voiding the contract a punishment or a “favor”?Leonard’s salary next season is as high as $50 million. Although he remains a top player when healthy, he has frequently missed games due to injuries (people have joked that his Aspiration endorsement is his second “nominal job”). If the contract is voided, the Clippers will gain max salary cap space in summer 2026, allowing them to completely rebuild the roster or even possibly lure LeBron James away from their city rivals, the Lakers.

Is it possible to “void the contract but count the $50 million against the Clippers’ 2027 salary cap”?Surprisingly, despite the length of the CBA, there is no explicit rule covering this scenario, and the first chapter’s “definitions” section does not include “contract voiding.” Other teams naturally want the league to apply this penalty, but in my view, this is highly unlikely — essentially a “double penalty”: the Clippers would bear salary cap consequences while losing the player, which is clearly unfair.

A more interesting question is whether the league can count the money Leonard received from Aspiration toward the Clippers’ 2026-27 salary cap. After all, this money was never included in any of the Clippers’ salary calculations. Doing so would avoid the “double penalty” controversy, prevent the Clippers from gaining massive cap space, and somewhat address other owners’ dissatisfaction — they believe the Clippers should pay luxury tax on the Aspiration money Leonard received.

Finally, voiding the contract presents the most difficult problem and, in my opinion, the core reason this would cause huge trouble for the league: it would completely disrupt the free agency market.

Training camps are about to start, and teams have almost no salary cap space left. The league’s investigation may take weeks or even months to complete — followed by arbitration hearings and final penalty decisions. By the time a clear conclusion is reached, the season may be halfway over.

Imagine if mid-season Leonard suddenly becomes a full free agent but is banned from re-signing with the Clippers. What would happen? If he chooses to stay in Los Angeles and join the Lakers on a minimum contract, what impact would that have on the league’s competitive balance? Even if he joins another team on a low salary, wouldn’t that severely distort the playoff race?

I am confident that if Leonard joins a championship contender on a low salary, the other 28 team owners will completely explode.But Silver cannot create a “reasonable market environment” for a top free agent appearing mid-season. The only compromise might be to suspend Leonard for the entire season, but that would be excessively harsh and could spark fierce conflict with the players’ union.

From the league’s perspective,a safer approach might be to drag out the entire investigation and penalty process until next spring, after the regular season ends, then void Leonard’s contract, allowing him to find a new team through the normal summer process.If that is not possible, the league might choose to “keep Leonard’s contract (still counting against the Clippers’ salary cap)” and instead impose other penalties on the Clippers — such as counting the Aspiration payments to Leonard toward the cap or devising other innovative sanctions.

In summary, if Silver and the independent arbitrator determine the Clippers circumvented the salary cap, this is the situation Silver currently faces. If penalties are imposed, “losing multiple draft picks, fines, and suspending Ballmer for one year” is almost certain.

The real uncertainty lies in Leonard’s contract fate: theoretically, the league might want to set a precedent by voiding the contract; but realistically, taking such action mid-season against a player of this caliber would likely cause chaos, so the league will most likely choose not to touch the contract and instead heavily punish the Clippers through other means.