Team circumvented salary cap rules to sign star
The NBA has handed down one of the biggest punishments in the history of the league to the Los Angeles Clippers after finding that the franchise circumvented salary cap rules when it courted Kawhi Leonard as a free agent.
The league has stripped the team of five first-round draft picks, giving the team no natural pick in the draft from 2029 through 2033.
The NBA also fined the Clippers $30m, and suspended owner Steve Ballmer from all league and team activities for a year. In addition, it issued suspensions without pay to president of basketball operations Lawrence Frank (six months) and president of business operations Gillian Zucker (one year) for their involvement in the scheme.
Leonard was also fined $700,000. The Clippers agreed to trade the seven-time All-Star to the Toronto Raptors earlier this summer, but the deal had been put on hold pending the completion of the NBA’s investigation. Leonard is due to make $50m in salary this season, while Ballmer, the former CEO of Microsoft, has an estimated wealth of $152.7bn, according to Forbes.
“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 in a statement. “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.”
In a statement through his agent, Leonard said 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. 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.”
The Clippers said they would challenge the investigation’s findings “through every avenue available to us” and looked “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.”
New York law firm Wachtell Lipton conducted the NBA’s investigation into the matter after reporting by journalist Pablo Torre last year.
Torre, citing legal documents, claimed Ballmer employed Leonard for a nonexistent role in a company Ballmer had invested in to circumvent the NBA salary cap, which punishes teams for spending too much on player salaries.
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Torre claims that Ballmer partly funded a now defunct tree-planting company called Aspiration. That company then allegedly entered into a $28m agreement with KL2 Aspire, LLC, a company owned by Leonard.
Torre says he could find no evidence that Leonard ever performed any work for Aspiration, and there was a clause in the contract between KL2 Aspire and Aspiration effectively allowed Leonard to be paid even if he did no work. Another clause said the deal would be voided if Leonard left the Clippers. One former employee of Aspiration told Torre he had heard the deal with Leonard had been set up to “circumvent the salary cap.”
