NEW YORK – The NBA has suspended Los Angeles Clippers owner Steve Ballmer for one year and imposed sweeping penalties on the franchise after an independent investigation found violations of the league’s salary-cap circumvention rules.
The Clippers were fined $30 million and ordered to forfeit five first-round draft picks, while Kawhi Leonard was required to pay $700,000 for his role in conduct that violated the league’s rules. The NBA said the penalties are final and binding under an agreement with the National Basketball Players Association.
NBA investigation finds multiple violations
The investigation, conducted by the law firm Wachtell, Lipton, Rosen & Katz, found what the NBA described as a pattern of misconduct by the Clippers organization.
According to the league, the team initiated off-court income opportunities for Leonard involving four companies that did business with the Clippers: Aspiration Partners, Boingo Wireless, Daktronics and Lockton Insurance.
The NBA said the Clippers facilitated endorsement agreements between Leonard and those companies and encouraged the companies to enter the arrangements by offering them business from the team. The investigation also found that the organization paid personal expenses for Leonard and his representatives.
Ballmer receives one-year suspension
Ballmer was suspended from all NBA and team activities for one year.
The NBA said Ballmer knowingly sought to help Leonard obtain off-court income opportunities and approved a business arrangement that he knew was a precondition for Aspiration to enter an endorsement agreement with Leonard.
The league also faulted Ballmer for failing to establish conditions that ensured the organization complied with its salary-cap circumvention rules.
Clippers lose five first-round picks
The draft penalties could have consequences for the franchise well beyond the current season.
The Clippers will forfeit their first-round selections in the 2029, 2030, 2031, 2032 and 2033 NBA drafts.
The league also placed the Clippers and their personnel under a five-year compliance and monitoring program overseen by the NBA.
Losing five consecutive first-round selections removes a significant source of young talent and future trade assets for the organization.
Leonard fined $700,000
Leonard was not suspended, but the NBA required him to pay $700,000 in connection with his violations.
The league said Leonard, through the conduct of his then-business manager Dennis Robertson, pressured the Clippers to assist him in obtaining off-court income opportunities and successfully obtained those opportunities.
The NBA also said Leonard failed to reimburse the team for personal expenses it had paid on behalf of him and his representatives.
Clippers executives also face suspensions
The NBA also disciplined two senior Clippers executives.
Gillian Zucker, the team’s president of business operations, was suspended without pay for one year. The league said she was primarily and directly responsible for the impermissible endorsement arrangements and provided false and misleading statements to investigators.
Lawrence Frank, the president of basketball operations, was suspended without pay for six months for his involvement in the endorsement arrangements and for approving impermissible expenses involving Leonard and his family.
Former Leonard manager receives five-year ban
Robertson, Leonard’s former business manager, was barred from conducting business with NBA teams and their affiliates for five years.
The ban covers activity on behalf of or involving players, employees and other league or team personnel.
Penalties reshape Clippers outlook
The sanctions represent a major setback for the Clippers, particularly because of the number of draft selections the franchise must surrender.
The case also raises broader questions about the NBA’s enforcement of salary-cap rules and the boundaries between legitimate player endorsement opportunities and arrangements that can function as additional compensation.
The league said the rules are intended to protect the integrity of the collective bargaining system and prevent teams from providing benefits outside the compensation mechanisms permitted under the CBA.
Investigation closes a long-running case
The NBA’s investigation had been underway for nearly a year and had centered in part on Leonard’s business relationships and endorsement opportunities.
The league’s announcement brings a formal conclusion to its investigation, although the NBA said Wachtell Lipton continues to receive information relevant to the matter and that further action could be considered if warranted.
The NBA and NBPA have agreed that the announced penalties are final and binding, making the sanctions the league’s definitive disciplinary response to the findings announced Wednesday.
Reporting Credit: NBA — official investigation findings and disciplinary announcement; Wachtell, Lipton, Rosen & Katz — independent investigation conducted for the NBA; NBA-NBPA — agreement confirming final and binding penalties.
