NBA penalizes Clippers over salary cap violations

The NBA stripped the Los Angeles Clippers of five first-round draft picks, fined the franchise $30 million and suspended owner Steve Ballmer for one year after finding the team violated salary cap rules tied to off-court endorsement deals involving Kawhi Leonard.

The penalties announced Wednesday rank among the most severe in league history. The Clippers will forfeit future first-round picks from 2029 through 2033, leaving the team without its natural first-round selection in each of those drafts. CBS News reported the franchise also already lacks picks in 2027 and 2028 because of prior trades.

Leonard was fined $700,000. The NBA also suspended Clippers president of business operations Gillian Zucker for one year without pay and president of basketball operations Lawrence Frank for six months without pay. Dennis Robertson, Leonard’s uncle and former business manager, was banned from engaging with NBA teams for five years for what the league described as pressuring the Clippers on Leonard’s behalf. The league office will place the Clippers under a compliance and monitoring program for five years, CBS News reported.

“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,” Commissioner Adam 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.”

The NBA said Ballmer knowingly sought to help Leonard obtain off-court income opportunities that circumvented salary cap rules. The league’s findings centered on endorsement agreements involving Aspiration Fund Adviser LLC, a company that filed for bankruptcy last year. Its co-founder, Joseph Sanberg, was sentenced in June to 14 years in federal prison after pleading guilty to defrauding lenders and investors of at least $248 million.

According to The Guardian, journalist Pablo Torre reported last year, citing legal documents, that Ballmer partially funded Aspiration, which then allegedly entered into a $28 million agreement with KL2 Aspire LLC, a company owned by Leonard. Torre said he found no evidence Leonard performed work for Aspiration, and that one contract clause effectively allowed Leonard to be paid even if he did no work while another said the deal would be voided if Leonard left the Clippers. A former Aspiration employee told Torre the deal had been set up to “circumvent the salary cap,” The Guardian reported.

The NBA investigation was conducted by the law firm Wachtell, Lipton, Rosen & Katz. The firm’s report concluded that the Clippers broke rules by initiating off-court income opportunities between Leonard and four companies doing business with the team — Aspiration Partners, Boingo Wireless, Daktronics and Lockton Insurance — facilitating endorsement agreements, offering team business to induce those companies to participate, paying personal expenses for Leonard and his representatives, and failing to report improper solicitations made by Robertson.

The Clippers rejected the NBA’s findings, calling the investigation “heavily biased” and saying it supported 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 standards Commissioner Silver set at the start of this investigation to ensure its fairness and accuracy,” the team said. “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 said through his agent that he took “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.” He added that he entered his Clippers contract and the agreements “in good faith” and had “no knowledge of any intent on anyone’s part to circumvent the salary cap.”

CBS News reported that Leonard was traded to the Toronto Raptors earlier this summer, but that the transaction was placed on hold while the investigation continued. The Guardian reported Leonard is due to make $50 million in salary this season and that Ballmer, the former Microsoft CEO, has an estimated fortune of $152.7 billion, according to Forbes.