The National Basketball Association has imposed the largest fine in league history against the Los Angeles Clippers, penalizing the team $30 million and suspending owner Steve Ballmer for one year following an investigation into salary-cap violations involving star Kawhi Leonard.
The sweeping penalties announced Wednesday also require the Clippers to forfeit five first-round draft picks, one each year beginning in 2029.
Ballmer, the former Microsoft CEO who is among the world’s wealthiest people, was found to have knowingly helped Leonard obtain millions of dollars in off-court income opportunities involving companies that did business with the Clippers.
The investigation, conducted by law firm Wachtell, Lipton, Rosen & Katz, found a pattern of misconduct involving efforts to circumvent NBA rules governing player compensation.
Among the companies involved was the now-defunct Aspiration Partners, which had a four-year, $28 million endorsement agreement with Leonard. Questions about that arrangement gained widespread attention last year after a podcast reported that the deal had not been publicly announced and Leonard apparently performed no services under it.
The investigation found that the Clippers facilitated endorsement opportunities between Leonard and four companies doing business with the team. Investigators also determined the team offered business to companies that entered deals with Leonard and paid some personal expenses for Leonard and his representatives.
The penalties extend beyond Ballmer and the team.
Clippers President of Business Operations Gillian Zucker was suspended without pay for one year, while President of Basketball Operations Lawrence Frank received a six-month unpaid suspension. The Clippers will also operate under an NBA compliance and monitoring program for five years.
Leonard was ordered to pay $700,000 for violations involving the actions of his former business manager and uncle, Dennis Robertson. Robertson was banned from doing business with NBA teams, players and personnel for five years.
NBA Commissioner Adam Silver characterized the violations as serious threats to the league’s collectively bargained system governing player compensation.
The Clippers strongly dispute the findings and said they plan to challenge the sanctions through arbitration, contending the investigation was biased.
Leonard said he accepted responsibility for lapses in judgment by people in his inner circle but maintained that he entered his agreements in good faith and did not knowingly participate in an effort to circumvent the salary cap.
Source: CNBC