The National Basketball Association (NBA) has fined the Los Angeles Clippers $30m and stripped five first-round draft picks to punish the franchise for violating salary cap circumvention rules involving star forward Kawhi Leonard, who has been ordered to pay $700,000, the league said.
The NBAâs investigation, conducted independently over the course of a year, âfound a pattern of misconduct and multiple significant rules violations by the Clippers organisation, a prior offender of the salary cap circumvention rulesâ, the league said in a statement on Wednesday.
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, Lockton Insurance and Aspiration Partners, the latter a financial technology firm that went bankrupt last year. Aspiration allegedly signed Leonard to a $28m endorsement deal and had a 23-year, $300m 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 âfor 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 organisation abided by the NBAâs circumvention rulesâ, it said.
Team president of business operations Gillian Zucker is suspended without pay for a year âfor being primarily and directly culpable for the impermissible endorsement arrangements and for providing false and misleading statements to investigatorsâ, the NBA said.
Lawrence Frank, the president of basketball operations, is suspended for six months without pay âfor his involvement with the impermissible endorsement arrangements and for approving impermissible expenses incurred by Mr Leonard and his familyâ, the league said.
The Clippers issued a statement on Wednesday disputing the leagueâs conclusions and the validity of the investigation. The team and Ballmer have repeatedly denied any wrongdoing related to Leonardâs contract.
âWe vehemently reject the NBAâs findings, which are the result of a heavily biased investigation seeking to justify a predetermined narrative rather than facts and evidence,â the Clippers said in the statement.
âWhat 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.â
âFor the past year, we cooperated fully and in good faith and we will now fight just as hard to demonstrate our innocence,â the statement continued. âWe intend to vigorously challenge these findings and penalties through every avenue available to us and look forward to an ethical and impartial arbitration process.â
Leonard, through new agent Harrison Gaines, issued a statement saying he had âno knowledge of any intent on anyoneâs part to circumvent the salary capâ.
âIntegrity and respect for this game are fundamental to who I am,â Leonard said in the statement. âI 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.â
The NBA said the Clippers failed to report improper solicitations for off-court income made on Leonardâs 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.
âI 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 anyoneâs part to circumvent the salary cap,â 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 leagueâs investigation to be completed.
âFor 15 years, my priority has been giving everything to my family, the game, and those I share the court with,â Leonard said. âAs I return to Toronto, I am focused on what I can control, closing this chapter, and moving forward with a clean slate.â
The NBA and the National Basketball Players Association (NBPA) have agreed that the penalties are final and binding.
âThe NBAâs 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,â Silver said in a statement.
âI am deeply disappointed by the flagrant violations of our rules and by the Clippersâ institutional and leadership failures that led to this misconduct. The severity of the penalties reflects the seriousness of the violations.â
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 Most Valuable Player, having won the award in title runs with the San Antonio Spurs (2014) and Toronto (2019). He 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 NBAâs All-Defensive Team seven times.
The leagueâs 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.
