On September 4th, Beijing time, ESPN's Shams Shams reported that NBA spokesman Mike Bass told him that the league "is aware of media reports regarding the Los Angeles Clippers and has launched an investigation." According to previous reports, the Clippers and their owner, Ballmer, were accused of circumventing the NBA's salary cap by paying Leonard $28 million for "shell work."

Former ESPN writer Pablo Torre revealed that the Clippers paid Leonard this amount through a now-bankrupt company owned by Ballmer.

Torre cited numerous internal documents from Aspire's company. On September 14, 2021, Ballmer invested $50 million in the company through his personal limited liability company, becoming a partial funding provider.

On September 27 of the same year, the Clippers announced a $300 million partnership with the then-current, now-bankrupt Aspire Company, which included sponsorship of the company on the Clippers' new arena and team jerseys.

Torre stated that in April 2022, Leonard, through his personal limited liability company, KL2 Aspire, signed a four-year, $28 million endorsement contract with Aspire. Nine months earlier, Leonard had signed a four-year, $176.3 million contract extension with the Clippers—an amount that met the maximum salary stipulated in the NBA's collective bargaining agreement at the time.

One of the documents Torre claimed to have obtained stated that the endorsement agreement between Aspire and KL2 Aspire would automatically expire if Leonard left the Clippers. Furthermore, Torre noted that Leonard would continue to receive the endorsement compensation even if he "refuses to cooperate with any promotional activities requested by Aspire."

An anonymous employee, purportedly a former employee of Aspire, told Torre that the payment to Leonard was "purportedly intended to circumvent the salary cap."

The Clippers responded, "Mr. Ballmer and the Clippers have never engaged in salary cap circumvention, nor have they engaged in any improper conduct in their partnership with Aspire. Any assertion to the contrary is false, and there is irrefutable evidence: Aspire breached its contractual obligations during the 2022-23 season, and the Clippers terminated their relationship with the company. Prior to the launch of the government investigation, neither the Clippers nor Mr. Ballmer were aware of any improper conduct by Aspire or its co-founders. The team and Mr. Ballmer are prepared to cooperate fully with any law enforcement investigation."

Aspire filed for bankruptcy in March 2025. The company is currently under federal investigation for fraud, and its 46-year-old co-founder, Joe Thornberg, pleaded guilty in late August to two counts of wire fraud, allegedly defrauding investors and creditors out of over $248 million.

Under the anti-circumvention clause in the NBA's 2023 collective bargaining agreement, teams found guilty of salary cap circumvention face penalties, including fines of up to $7.5 million, the immediate revocation of draft picks, the nullification of player contracts, and suspensions of up to one year for team personnel involved.

Similar violations have been penalized in NBA history: In 2000, the Minnesota Timberwolves were exposed for an illegal secret agreement with player Joe Smith. The Timberwolves allegedly promised Smith a future multi-million dollar, long-term contract in exchange for him signing a short-term, lower-salary contract.

Ultimately, the NBA imposed severe penalties on the Timberwolves: stripping them of their five first-round draft picks, fining them $3.5 million, and banning head coach Kevin McHale and owner Glen Taylor from coaching/managing the team for one season. Smith's contract was also declared void.

The Clippers had previously been penalized by the NBA for violations: In May 2019, then-Clippers head coach Doc Rivers publicly compared Kawhi Leonard, then playing for the Toronto Raptors, to Michael Jordan. This remark violated league rules prohibiting teams from privately contacting active players from other teams or making public statements that could interfere with player trades or signings, for which the Clippers were fined $50,000.

In the summer of 2019, during Leonard's free agency, reports surfaced that he and his team (led by his uncle, Dennis Robertson) had made inappropriate demands from potential signing teams. Reports at the time included partial ownership of the team, use of private jets, housing, and guaranteed off-court endorsement income. The NBA also launched an investigation into the Clippers regarding this matter. In November 2019, Rivers was fined $50,000 by the NBA for making remarks inconsistent with Leonard's health.

In December 2020, a man named Johnny Wilkes filed a lawsuit, alleging that he had helped the Clippers sign Leonard and agreed to receive $2.5 million in compensation from Clippers consultant Jerry West, but that West had failed to fulfill his promise. The NBA subsequently launched an investigation into the allegations related to the Clippers' signing of Leonard. The Clippers denied Wilkes' allegations, and the lawsuit was ultimately dismissed without penalty.

Leonard, 34, signed a three-year, $153 million contract extension with the Clippers in January 2024, which will keep him with the team through the 2026-27 season.

Additionally, the Clippers are currently fighting another lawsuit in 2024: former strength and conditioning coach Randy Shelton filed a lawsuit against the Clippers and President of Basketball Operations Lawrence Frank, alleging wrongful termination, in part due to concerns he raised about Leonard's health and injury management.

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