The NBA fined the Los Angeles Clippers $30 million and stripped away five first-round draft picks to punish the franchise for violating salary cap circumvention rules involving star forward Kawhi Leonard, who was ordered to pay $700,000, the league announced Wednesday.
The NBA’s investigation, conducted independently over the course of a year, “found a pattern of misconduct and multiple significant rules violations by the Clippers organization, a prior offender of the salary cap circumvention rules,” the league said in a statement.
The heart of the issue was the team introducing Leonard to club sponsors for off-court income opportunities and endorsement agreements, offering the companies business from the team as inducements and paying personal expenses for Leonard and his representatives, among other violations.
The businesses identified were Boingo Wireless, Daktronics, and Lockton Insurance and Aspiration Partners, the latter a financial technology firm that went bankrupt last year. Aspiration allegedly signed Leonard to a $28 million endorsement deal and had a 23-year, $300 million sponsorship deal with the Clippers.
The Clippers must forfeit a first-round pick in each draft from 2029 to 2033. Leonard, 35, has been fined $700,000 while several Clippers executives have been suspended.
The NBA suspended owner Steve Ballmer for one year from all league and team activities “for knowingly seeking to help Mr. Leonard obtain off-court income opportunities, for approving a business deal that he knew was a precondition for Aspiration to enter into an endorsement agreement with Mr. Leonard, and for his failure to create conditions under which his organization abided by the NBA’s circumvention rules,” the league said.
Team president of business operations Gillian Zucker is suspended without pay for a year “for being primarily and directly culpable for the impermissible endorsement arrangements and for providing false and misleading statements to investigators,” the league said.
Lawrence Frank, the president of basketball operations, is suspended for six months without pay “for his involvement with the impermissible endorsement arrangements and for approving impermissible expenses incurred by Mr. Leonard and his family,” the league said.
The Clippers issued a statement Wednesday disputing the league’s conclusions and the validity of the investigation. The team and Ballmer repeatedly have denied any wrongdoing related to Leonard’s contract.
“We vehemently reject the NBA’s findings, which are the result of a heavily biased investigation seeking to justify a predetermined narrative rather than facts and evidence,” the Clippers said in the statement. “What the league told us privately differs from what it announced today publicly, and they have not held themselves close to the standard Commissioner (Adam) Silver set at the start of this investigation to ensure its fairness and accuracy.
“For the past year, we cooperated fully and in good faith and we will now fight just as hard to demonstrate our innocence,” the statement continued. “We intend to vigorously challenge these findings and penalties through every avenue available to us and look forward to an ethical and impartial arbitration process.”
Leonard, though new agent Harrison Gaines, issued a statement saying he had “no knowledge of any intent on anyone’s part to circumvent the salary cap.”
“Integrity and respect for this game are fundamental to who I am,” Leonard said in the statement. “I accept full responsibility for lapses in judgment by people within my inner circle and regret the distraction this situation has caused the fans and my family.”
The NBA said the Clippers failed to report improper solicitations for off-court income made on Leonard’s behalf by Dennis Robertson, his uncle and then-business manager. Robertson was banned by the NBA for five years from doing business or engaging with league teams and their affiliates.
“I entered into my contract with the Clippers as well as the agreements in question in good faith, fully committed to fulfilling my obligations and with no knowledge of any intent on anyone’s part to circumvent the salary cap,” Leonard said in his statement.
The Toronto Raptors, who lost Leonard to the Clippers via free agency after winning the 2019 NBA championship, agreed in principle to a trade on June 30 to bring him back. The deal has yet to be executed as the teams waited for the league’s investigation to be completed.
“For 15 years, my priority has been giving everything to my family, the game, and those I share the court with,” Leonard said. “As I return to Toronto, I am focused on what I can control, closing this chapter, and moving forward with a clean slate.”
The NBA and the NBA Players Association have agreed the penalties are final and binding.
“The NBA’s collectively bargained system for determining player compensation is a fundamental component of the basketball competition that the league oversees for the benefit of the teams and players and ultimately the fans,” Silver said in a statement. “I am deeply disappointed by the flagrant violations of our rules and by the Clippers’ institutional and leadership failures that led to this misconduct. The severity of the penalties reflects the seriousness of the violations.”
The law firm of Wachtell, Lipton, Rosen & Katz conducted the investigation and continues to receive information, leaving open the possibility of further action as appropriate, the league said.
Leonard is a two-time NBA Finals MVP, having won the award in title runs with the San Antonio Spurs (2014) and Toronto (2019).
Leonard averaged 27.9 points, 6.4 rebounds and 3.6 assists in 65 games last season for the Clippers, who finished ninth in the Western Conference and lost their play-in game to the Golden State Warriors.
A seven-time All-Star and two-time Defensive Player of the Year, he has made the NBA’s All-Defensive Team seven times.
The league’s statement did not indicate whether Leonard has been cleared to join the Raptors. If that indeed is the case, then the original deal called for the Clippers to receive forward Brandon Ingram, guard Gradey Dick, two first-round picks, two second-round picks and one pick swap.
Per ESPN, the trade is expected to be consummated “in the next few days.”
