A year after independent journalist Pablo Torre uncovered allegations of salary cap circumvention, the reality has proven to be as damaging as anticipated, evolving into one of the most punitive scandals in NBA history.
The 1999 Minnesota Timberwolves case involving Joe Smith long set the benchmark for cap circumvention in the league. That secret agreement resulted in the forfeiture of four first-round picks and a massive fine. However, prior warnings carry greater severity for the Los Angeles Clippers’ situation. Following a 2015 fine for an unauthorized endorsement arrangement, owner Steve Ballmer publicly pledged strict adherence to the Collective Bargaining Agreement. Unallowable benefits requested during Kawhi Leonard’s 2019 free agency prompted further concerns and league-wide compliance enforcement.
An independent investigation by Wachtell, Lipton, Rosen & Katz established systemic violations. The findings revealed that the Clippers facilitated off-court sponsor deals for Leonard, leveraged team business to incentivize participating companies and failed to disclose improper financial demands. Top executive Gillian Zucker initiated contacts in violation of league rules, while President of Basketball Operations Lawrence Frank tracked the arrangements and approved unauthorized expenses. Rather than cooperating, franchise leadership obstructed the inquiry through delayed documentation and false statements.
Thus, the NBA handed down a $30 million organizational fine, one-year suspensions for Ballmer and Zucker, a six-month suspension for Frank, a five-year ban for Leonard’s manager, strict league compliance oversight for the franchise and the forfeiture of five consecutive first-round draft picks.
What this essentially means is that Ballmer cannot walk into his own arena under the pretext of NBA official events and cannot go to owner’s meetings. For the next five years, the NBA is going to verify trades are made without any intended cap circumvention.
With the loss of five consecutive draft picks, the Clippers add on to the amount of the future they have forfeited, willingly or unwillingly. Between complicated draft rights, swaps and draft selections being voided out of existence, the Clippers lose a lot of leverage in future deals. The recent NBA champions, the New York Knicks, built their roster on trades as opposed to free agency, infamously leveraging their future for their now — and it paid off for them. Until 2034, the Clippers do not outright own or control any of their own picks—meaning they cannot pivot.
The premise behind assembling the team in 2019 was to pair Leonard with Paul George to win an NBA championship. Many pundits argued that the Clippers had a great chance to do so. The Clippers only managed to win three postseason series, not counting the play-in.
Leonard was not healthy enough to compete in several of the postseason runs. The only ones he did participate in resulted in devastating losses for the team. The Clippers blew a 3-1 lead in the 2020 bubble at the hands of the Denver Nuggets. In this year’s play-in, 36-year-old Draymond Green defended Leonard, offensively limiting him as a 37-year-old Stephen Curry outplayed him despite Leonard’s All-NBA play towards the back half of the NBA season.
Otherwise, all they managed to get was a Western Conference finals appearance without Leonard. George walked away for nothing; the Clippers traded James Harden for Darius Garland, and Leonard was traded for Brandon Ingram and Gradey Dick.
When evaluating the worst trades in NBA history, you can argue the team has been able to bounce back from the damage somewhat. When evaluating failed superteams, you can make an argument that they recovered.
For the Clippers, though, a decade of draft assets — gone. Half a billion dollars, combined from the luxury tax that Balmer had to pay, alongside the money paid for legal counsel, the fraudulent companies and the NBA fine.
Though the Clippers announced that they were going to fight the ruling using every legal channel available to them, the NBA declared its ruling to be final.
This scandal effectively ends the Clippers’ current era before it could truly begin. By tying their fate to a prohibited gamble, the organization has ensured that its path forward is not defined by championships but by the absence of them, solidifying its place in the NBA record books for all the wrong reasons.