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Clippers scandal a cautionary tale for teams testing the boundaries

11 0
29.10.2026

The NBA season has started, and Kawhi Leonard was officially traded to the Toronto Raptors. Although the Los Angeles Clippers and the Raptors agreed to the trade in July, it sat frozen for nearly three months while the NBA investigated whether the Clippers had secretly paid Leonard millions of dollars through companies with no apparent connection to basketball. The NBA released its findings in September, concluding that the Clippers had circumvented the salary cap, and the trade unfroze within days. As far as most fans are concerned, the story was over.

However, this scandal is not a closed case, but a preview of how salary cap circumvention may spread across professional sports.

The Leonard investigation, conducted by outside counsel at Wachtell, Lipton, Rosen & Katz, found that the Clippers routed undisclosed compensation to Leonard through four companies doing business with the team. Leonard already earned millions on the court, yet the flagrantly improper “no show” arrangements paid him millions more, for no meaningful work. In one example, the Clippers told a scoreboard manufacturer the exact amount to pay Leonard as a condition of winning the arena’s video-board contract. Then, the Clippers instructed the company to increase Leonard’s payment when the team expanded its scoreboard spending a year later. In another........

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