The NBA announced punishments for the Los Angeles Clippers, owner Steve Ballmer, star player Kawhi Leonard and others on Wednesday for "violating the salary cap circumvention rules." The punishments -- which include a one-year suspension for Ballmer, a $30 million fine for the Clippers, five forfeited first-round draft picks for the franchise and a $700,000 fine for Leonard -- came after a nearly year-long investigation into the franchise and Leonard's endorsement deals.
Leonard will not have his contract voided or face a suspension, however. He is expected to be traded to the Toronto Raptors, who agreed to a deal for Leonard in June, but the trade has been on hold as the NBA's investigation continued.
"The investigation 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 press release.
The investigation into Leonard and the Clippers began last September, when investigative journalist Pablo Torre dropped a bombshell podcast alleging that the Clippers had circumvented the salary cap. That investigation unearthed a previously unknown endorsement agreement between Leonard and Aspiration, a now-bankrupt company that had raised hundreds of millions of dollars for its stated mission of sustainability. That endorsement promised to pay Leonard large amounts seemingly without receiving anything in return.
Leonard, it was revealed last month, also had a similar endorsement deal with scoreboard manufacturer Daktronics. In addition to Aspiration and Daktronics, the investigation also found that the Clippers "affirmatively initiated off-court income opportunities" for Leonard with two other companies: Boingo Wireless and Lockton Insurance.
Here are the punishments the NBA issued on Wednesday:
NBA punishments for Clippers' salary cap circumvention
- The Clippers forfeited five first-round NBA Draft picks from 2029 to 2033.
- The Clippers were fined $30 million.
- Clippers owner Steve Ballmer was suspended from "all league and team activities" for one year 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."
- Gillian Zucker, the Clippers president of business operations, was 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."
- Lawrence Frank, the Clippers president of basketball operations, was suspended without pay for six months "for his involvement with the impermissible endorsement arrangements and for approving impermissible expenses incurred by Mr. Leonard and his family."
- Kawhi Leonard must pay the NBA $700,000 "in connection with his violations."
- Dennis Robertson, Leonard's uncle, is banned for five years from "conducting business or otherwise engaging with NBA teams and their affiliates on behalf of or with respect to any player, employee, or other league or team personnel."
The NBA and NBA Players Association reached an agreement confirming that these penalties are "final and binding on all parties." NBA commissioner Adam Silver said he is "deeply disappointed" by the Clippers' "flagrant violations."
"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. "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."
How Clippers, Leonard violated cap circumvention rules
The summary report of the investigation describes how the Clippers and Leonard broke the NBA's salary cap circumvention rules.
The Clippers, per the investigation, initiated "off-court income opportunities" and facilitated "endorsement agreements" between Leonard and four companies: Aspiration Partners, Boingo Wireless, Daktronics and Lockton Insurance. Additionally, the Clippers were determined to have "induced" those companies into deals with Leonard "by offering them business from the team."
The Clippers also broke league rules by "paying personal expenses on behalf of Leonard and his representatives" and "failing to report improper solicitations for off-court income opportunities made on Leonard's behalf" through Robertson, his then-business manager.
Leonard was found to have violated the cap circumvention rules "through the conduct of Robertson."
"Mr. Leonard, through the conduct of Mr. Robertson on his behalf, violated the circumvention rules by pressuring the Clippers to assist him in obtaining off-court income opportunities, successfully obtaining those opportunities, and failing to reimburse payments by the Clippers for personal expenses," the NBA said.
Clippers 'vehemently reject' NBA's findings
Ballmer, the Clippers and Leonard had publicly denied the allegations since they surfaced last fall.
In a statement on Wednesday, the Clippers said they "vehemently reject" the league's findings and characterized the investigation conducted by law firm Wachtell Lipton as "heavily biased."
"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. What the league told us privately differs from what it announced today publicly, and they have not held themselves close to the standard Commissioner 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. 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, in a statement released through Harrison Gaines, his new agent, said he accepts "full responsibility for lapses in judgment" by people in his "inner circle" and 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. 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. 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. For 15 years, my priority has been giving everything to my family, the game, and those I share the court with. As I return to Toronto, I am focused on what I can control, closing this chapter, and moving forward with a clean slate."
How did we get here?
In June, Aspiration co-founder Joe Sanberg was sentenced to 14 years in prison for defrauding investors.
When Sanberg was arrested for fraud and the company went bankrupt, filings showed Leonard as a creditor. Ballmer invested a total of $60 million into the company. Dennis Wong, the only minority owner of the Clippers, invested $1.99 million nine days before a $1.75 million payment was made to Leonard. Wong's daughter worked for Aspiration, and at one point, Aspiration even agreed to a jersey patch sponsorship deal with the Clippers that ultimately did not materialize.
In 2023, an SEC Whistleblower Complaint was filed by two former Aspiration employees under penalty of perjury that accused the company of paying Leonard "an incentivized bonus to circumvent the NBA's salary cap, disguised as an organic marketing sponsorship agreement." A former employee in Aspiration's finance department appeared on Pablo Torre Finds Out and said they were told not to question Leonard's sponsorship agreement because "it was to circumvent the salary cap."
After the NBA spoke to Sanberg as part of its investigation, it sent a letter to judge Stephen V. Wilson stating that he cooperated. Ballmer would go on to share a victim impact statement that called Sanberg's credibility into question.
Meanwhile, multiple reports indicated that when Leonard was a free agent in 2019, Robertson asked other teams in the running for his services for illegal benefits. According to Bruce Arthur of the Toronto Star, that included ownership stakes in the Raptors and Maple Leafs, along with an extra $10 million per year in sponsorship income. When the Raptors reportedly pointed out that there were surely companies in Toronto who would love to have Leonard as an endorser, his camp allegedly replied: "We don't want to do anything."
In 2019, The Athletic reported that Robertson had made similar requests of the Los Angeles Lakers, including use of a private plane, a home, and a stake in the team. The Lakers reportedly denied those requests. The NBA investigated the claims at the time and found no wrongdoing on the part of the Clippers.
The drama surrounding Leonard was just the beginning of what was an unusual season for the Clippers. Leonard played well, but the Clippers, who expected to be a championship contender, lagged out of the gate, finished 42-40 and lost to the Warriors in the Play-In Tournament. They traded away both James Harden and Ivica Zubac at the trade deadline with an eye toward the future.
In June, the Clippers agreed to trade Leonard back to the Raptors. The Raptors were one of only two teams Leonard was reportedly willing to sign a contract extension with, along with his other former employer, the San Antonio Spurs. However, when the NBA informed the Raptors that they would assume the risk of any discipline for Leonard if they completed the trade, they elected to wait until the investigation concluded before proceeding.
