The NBA’s investigation into whether the Los Angeles Clippers improperly funneled money to Kawhi Leonard could stretch into 2027 if the parties cannot reach agreement on findings or any proposed penalties, according to people familiar with the matter.
Central to the potential delay is the NBA Players Association, which has signaled it would take the case to arbitration rather than accept punishment it does not view as sufficiently supported by evidence. The union has reviewed what has emerged from the inquiry and its executive director said publicly in Las Vegas earlier this month that he did not believe there was anything to the allegations, based on what he had seen.
The investigation, which has been running for nearly 10 months, centers on whether compensation flowed to Leonard through a $28 million endorsement deal he signed in 2022 with Aspiration, a now-bankrupt green banking company. Aspiration also held a separate 23-year, $300 million endorsement arrangement with the Clippers, and the overlap between the two deals has been the subject of intense scrutiny. The Clippers have consistently denied any wrongdoing.
How the arbitration process would work
If the Clippers, the league and the union cannot agree on the findings or any resolution, the matter moves to a neutral arbitrator jointly appointed by the NBA and the players union. That arbitrator would have the authority to compel document production, require witness testimony and order discovery. A hearing would follow, and the arbitrator’s decision would then be subject to review by a three-person appeal panel also jointly appointed by both sides. The appeal panel’s decision is binding.
The collective bargaining agreement treats cap circumvention as a violation subject to this arbitration process. Penalties include team fines up to $7.5 million, draft pick forfeiture, voiding of player contracts and suspensions of up to a year for personnel involved. One person familiar with the process cautioned against reading the timeline as a signal of what investigators have found.
The Clippers-Raptors trade hangs in the balance
The extended timeline of the investigation has created an unusual secondary complication. The Clippers and the Toronto Raptors agreed on June 30 to a trade that would send Leonard to his former team in exchange for Brandon Ingram, Gradey Dick, two unprotected first-round picks in 2031 and 2033, a 2027 first-round pick swap and two second-round selections. Nine days after agreeing to the deal, both franchises separately announced it was on hold.
The reason was significant. Both teams said they had learned from the league office that Toronto would be assuming the risk for any penalties Leonard might face as a result of the investigation, including the possibility of a suspension or his contract being voided. That disclosure changed the calculus for the Raptors, and the trade remains in limbo.
Both the Clippers and Raptors have said they still intend to complete the deal, but the path to doing so depends in part on how the investigation resolves and whether an arbitration process would further delay or complicate the trade.
What the investigation has uncovered so far
Commissioner Adam Silver said publicly in mid-July that the investigation needed to conclude before the start of next season and that it had taken longer than anticipated. He said he understood public frustration with the duration while also noting the importance of ensuring due process.
Separately, the scope of the inquiry appears to have broadened. Reporting has indicated that investigators expanded their review to include a previously undisclosed endorsement deal Leonard had with another company, as well as expenses the Clippers provided for Leonard for which the team was not reimbursed. The full extent of what those expanded inquiries have produced has not been made public.
The Clippers have said they would fight any penalty through arbitration if necessary. The league has not responded to questions about the current status of the investigation. If the evidence is compelling enough to persuade all parties, a settlement that avoids formal arbitration remains possible. If it is not, the process described above could push a resolution well past the beginning of the coming season.
