The NBA on Wednesday announced severe punishments for the LA Clippers -- including the loss of five future first-round picks and a fine of $30 million -- for violating salary cap circumvention rules when they signed star Kawhi Leonard in 2022.
In a statement, the NBA said a near-yearlong 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 punishments, as announced by the league, include:
• The forfeiture of five first-round draft picks, one each in the 2029, 2030, 2031, 2032 and 2033 NBA drafts.
• A fine of $30 million.
• Owner Steve Ballmer is suspended from all league and team activities for one year.
• President of business operations Gillian Zucker is suspended without pay for one year.
• President of basketball operations Lawrence Frank is suspended without pay for six months.
• Leonard must pay the league $700,000.
All penalties are binding, the league and the players' union said.
"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," NBA 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."
Leonard, through his new agent, Harrison Gaines, said he accepted "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," he said.
The Clippers-Toronto Raptors agreed to a trade centered around Leonard earlier this summer, but that was put on hold until the NBA investigation was completed.
The investigation was conducted by New York law firm Wachtell Lipton, which released a summary report Wednesday.
It came after initial allegations that the Clippers compensated Leonard through a $28 million endorsement deal that he signed in 2022 with the now-bankrupt green banking company Aspiration, which also had a 23-year, $300 million endorsement deal with the Clippers. Those allegations were reported on initially by former ESPN contributor Pablo Torre in a series of podcasts last September.
The Wachtell Lipton investigation found that the Clippers broke rules by "initiating off-court income opportunities between Mr. Leonard and four companies doing business with the team: Aspiration Partners, Boingo Wireless, Daktronics, and Lockton Insurance; facilitating endorsement agreements between these companies and Mr. Leonard; inducing the companies to enter into these agreements by offering them business from the team; paying personal expenses on behalf of Mr. Leonard and his representatives; and failing to report improper solicitations for off-court income opportunities made on Mr. Leonard's behalf through his then-business manager, Dennis Robertson."
The Clippers said they intend to challenge the findings of the investigation "through every avenue available to us," while looking "forward to an ethical and impartial arbitration process."
"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 team said in a 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 Silver set at the start of this investigation to ensure it's 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."
