NBA Fines Clippers $30 Million, Kawhi Leonard $700,000 Over Salary Cap Violations

LOS ANGELES —

The NBA fined the Los Angeles Clippers $30 million and hit star forward Kawhi Leonard with a $700,000 penalty on Wednesday, closing out a nearly yearlong investigation into whether the team skirted the league's salary cap rules, the Associated Press reported.

The league did not stop at fines. Clippers owner Steve Ballmer was suspended for one year, according to the Associated Press. Lawrence Frank, the team's president of basketball operations, was suspended without pay for six months, and Gillian Zucker, the president of business operations, was suspended for a year. The Associated Press reported that all three were disciplined for their roles in the violations.

A Deal That Kept Growing

The NBA's inquiry started with an endorsement arrangement between Leonard and Aspiration, a now defunct financial technology company, and expanded over the course of the investigation to include a separate endorsement deal Leonard had with Daktronics, the scoreboard manufacturer, CBS Sports reported. The league's collective bargaining agreement limits how teams and their business partners can compensate players outside of their official contracts, and investigators were looking at whether those outside deals amounted to a hidden way of paying Leonard more than the cap allowed.

As of August, reports indicated the league's investigation had not turned up hard evidence directly tying Ballmer or the Clippers organization to intentional cap circumvention, CBS Sports reported. The investigation stayed open for weeks after that.

SEC Now Involved

The Daktronics deal has drawn interest beyond the NBA. Howard Atkins, the company's chief financial officer, told investors on an earnings call that Daktronics had received information requests from two separate bodies looking into the company's dealings with Leonard: the NBA and the Securities and Exchange Commission, according to Matt Sullivan of the Pablo Torre Finds Out podcast, as reported by CBS Sports. Atkins said the company was cooperating with both inquiries but would not comment further "out of respect for the respective processes."

Because the SEC has no jurisdiction over the NBA's labor agreement, its involvement suggests investigators may be looking at the Daktronics arrangement as a possible financial crime rather than simply a violation of league rules, CBS Sports reported.

The fallout has already affected Leonard's future. A trade that would have sent him from the Clippers to the Toronto Raptors has been put on hold because of the investigation, CBS Sports reported. It remains unclear whether the SEC's inquiry will affect the NBA's findings or Leonard's standing with either team.