Clippers fined $30M, lose picks for cap
The NBA fined the Los Angeles Clippers $30 million, suspended owner Steve Ballmer for a year, and stripped five future first-round picks for salary cap violations.
The NBA has fined the Los Angeles Clippers $30 million and suspended owner Steve Ballmer for one year. The league also stripped the team of five future first-round draft picks in 2029, 2030, 2031, 2032, and 2033 for violating salary cap rules, according to a league press release issued Wednesday.
Commissioner Adam Silver said he was deeply disappointed by the flagrant violations. The league stated its investigation found a pattern of misconduct and multiple significant rules violations by the Clippers organization, a prior offender of the salary cap circumvention rules. Additional penalties were levied against team executives and star forward Kawhi Leonard.
Penalties for executives and Leonard
Clippers president of business operations Gillian Zucker was suspended without pay for one year. President of basketball operations Lawrence Frank received a six-month unpaid suspension. Kawhi Leonard was ordered to pay $700,000 for his role in the violations. His uncle and business manager, Dennis Robertson, was banned from conducting business with any NBA team or affiliate for five years.
The Clippers issued a statement vehemently rejecting the NBA's findings. The team called the investigation heavily biased and said it would vigorously challenge these findings and penalties through every avenue available to us. The probe was conducted by the law firm Wachtell Lipton at the NBA's request.
The web of endorsement deals
The investigation centered on endorsement deals for Kawhi Leonard that were allegedly facilitated by the Clippers to circumvent salary cap rules. While the now-bankrupt company Aspiration was central to the scandal, the report identified three other firms: Boingo, Daktronics, and Lockton.
The summary report from Wachtell Lipton found the Clippers initiated, facilitated and induced these companies to enter into agreements with Leonard. The deals were signed rapidly in mid-2020, with Leonard receiving all $18 million due under them by August 2021.
| Company | Business Type | Deal Timeline |
|---|---|---|
| Boingo | Wireless communications provider | Multi-year deal signed July 2020 |
| Daktronics | Scoreboard and video display manufacturer | Multi-year deal signed July 2020 |
| Lockton | Insurance brokerage | Multi-year deal signed by August 2020 |
The report noted the highly unusual nature of these agreements. Investigators concluded the companies entered them through the prospect of lucrative business arrangements with the Clippers.
Pressure from Uncle Dennis
Months after Leonard joined the Clippers in 2019, his uncle Dennis Robertson began pressuring the team to generate more off-court income. Robertson reportedly demanded at least $10 million per year for his nephew from owner Steve Ballmer and executives Lawrence Frank and Gillian Zucker.
Contemporaneous notes from Frank in March 2020, cited in the Wachtell Lipton summary, detail the pressure. The notes state that Mr. Robertson complained to Mr. Ballmer that Ms. Zucker was making introductions for what he called bull**** deals. Robertson said he could not wait on Ms. Zucker and that he had to get paid.
Ballmer responded that he and Clippers personnel were collective workers to try to help Mr. Leonard achieve his financial goals. Zucker assured Robertson that Ballmer would follow through on his promise. Robertson then requested a list of five to six companies in the pipeline for potential introductions.
The investigation also found hundreds of instances where the team paid for personal travel, accommodations, gifts, and tickets for Robertson and Leonard's family. These expenses were not properly deducted from Leonard's salary as required by league rules.
Why punishments differed
The disparity in suspensions for executives Gillian Zucker and Lawrence Frank stemmed from their cooperation, according to the investigative report. Zucker was suspended for a year, Frank for six months.
The report stated Zucker made several statements that proved inconsistent with contemporaneous documents, other witness statements, and the broader chronology of events. It said she professed a lack of recollection on important issues and placed responsibility on subordinates.
In contrast, Frank openly discussed with investigators his conduct from the relevant time period, recalled details of key events, took responsibility for the actions of subordinates, and was generally consistent across his interviews. The report also noted Zucker had personal relationships with executives at two of the companies that signed Leonard to endorsement deals. She was the primary official who initiated and facilitated Leonard's deal with Aspiration.
