After completing a nearly year-long investigation into the relationship between the Los Angeles Clippers, their owner and governor Steve Ballmer, star forward Kawhi Leonard and various business partners, the NBA handed down the most damaging punishment for a team in league history.
A 35-page report from the investigatory law firm of Wachtell, Lipton, Rosen & Katz revealed a lot about the Clippers’ dealings with Leonard and also raised additional questions.
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Here are the key details about the investigation, the NBA’s punishment and what comes next for the Clippers, Ballmer and Leonard.
What did the Clippers and Leonard do to get in trouble?
A lot, apparently. In simplest terms, the NBA says its investigation (after Pablo Torre’s initial investigation) revealed evidence the Clippers circumvented the league’s salary cap to help ensure Leonard received additional compensation — like a lot of additional compensation — outside of his salary. League rules put a limit on what teams can pay players. Going beyond that, whether it’s from the franchise directly or funneled via the team through sponsors or other businesses, is one of the most serious violations of NBA governance.
There had been reports for years that Leonard’s uncle and business adviser, Dennis Robertson, sought extra benefits and money from teams pursuing Leonard in free agency in 2019. The NBA investigated those claims and said it did not uncover evidence of any violations but would keep the case open.
Torre then revealed a year ago that Aspiration — a now-bankrupt tree-planting service that counted Ballmer among its investors — had signed Leonard to a lucrative sponsorship deal in which he reportedly performed no work. The league’s investigators claimed that some Aspiration officials initially did not want to hire Leonard but were assured that they would be receiving the money to pay him via additional investment from the Clippers.
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According to the NBA’s investigatory report, the Clippers also helped arrange for three other companies to negotiate sponsorship deals with Leonard in which he provided little to no actual service.
In addition, the Clippers were found to have covered business expenses for Leonard that he should have paid for himself. That led to Leonard also being fined.
What exactly is the punishment?
The NBA stripped the Clippers of five first-round draft picks, fined the team $30 million, fined Leonard $700,000 and suspended team governor Steve Ballmer from all league and team activities for one year. Clippers executives Lawrence Frank (six months) and Gillian Zucker (one year) have been suspended without pay. The league also banned Dennis Robertson, Leonard’s uncle and former adviser, from conducting NBA business for five years.
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The team will be subject to an NBA compliance and monitoring program for five years.
Can the Clippers appeal their punishment through arbitration?
According to multiple reports, there is no way for the Clippers to appeal the NBA’s ruling within the league bylaws. The National Basketball Players Association, the players union, could have sent the case to arbitration but has chosen not to fight it. In the league’s news release announcing the punishment, the NBA said it has agreed to the punishment terms with the NBPA.
The Clippers could still try to contest the punishment in court, and they appear willing to do so, according to their initial comments. The difficulty of pursuing that path remains to be seen. In Louisiana, at least, there’s always a judge willing to hear a case against the NCAA. The Clippers claim Ballmer has already spent $50 million in legal fees on the investigation — and he has billions of dollars more left in his account.
About those draft picks? Which ones exactly are they losing — and can the Pacers get theirs back?
The Clippers are losing first-round draft picks for the 2029, 2030, 2031, 2032 and 2033 NBA Drafts. In 2029, the Clippers have their own pick and the Pacers’ pick from the Ivica Zubac trade last season. It is the pick from the Pacers that is reportedly being stripped from them. And, no, the Pacers will not benefit from this and get their pick back. (Sorry, Kevin Pritchard.)
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The Clippers are also reportedly set to acquire the Toronto Raptors’ 2031 and 2033 first-round picks, in addition to a 2027 pick swap, in the proposed Leonard trade, if it goes through.
Here’s what the Clippers’ future first-round draft assets look like for the next seven years: 2027: Thunder have option of swapping their first-round pick or Denver Nuggets’ top-five protected pick with Clippers’ first-rounder; Clippers then have the right to swap what pick they receive with the Toronto Raptors* 2028: none 2029: own if lands in Nos. 1-3; if it lands in Nos. 4-30, the Philadelphia 76ers can swap their own first-round pick with the Clippers’ 2030: none 2031: Raptors* 2032: none 2033: Raptors*
*This is contingent on the Clippers and Raptors completing the Leonard trade.
Who is running the Clippers while Ballmer and president of basketball operations Lawrence Frank are sidelined?
The Clippers have not publicly announced their replacements, so far choosing to say only that they intend to fight the punishment.
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If the suspensions do stay in place, Clippers vice chairman Dennis Wong — who also is the team’s alternate governor — presumably would represent the franchise for league business in place of Ballmer.
Ballmer also played an outsized role within the league, serving as one of Silver’s more trusted advisers among owners. He headed the NBA’s powerful audit committee and presumably will need to be replaced there.
Frank’s six-month suspension will carry past the NBA’s Feb. 11 trade deadline, but — unlike Ballmer — the head of basketball ops is expected to be back before the end of the season. The Clippers also just signed Frank to a multiyear extension last season, so it doesn’t appear like he will be removed entirely from his role unless Ballmer opts for a complete housecleaning.
In the meantime, the Clippers could choose to delegate the responsibilities to other members of their front office. Trent Redden is the team’s general manager and the Clippers have a pair of assistant GMs: Jud Winton and Mark Hughes. Redden, Winton and Hughes were all promoted to their current roles in June 2023.
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Will the Clippers-Raptors trade still happen?
According to Leonard himself, the answer is “Yes.” In his statement after the punishment was announced, Leonard said: “As I return to Toronto, I am focused on what I can control, closing this chapter, and moving forward with a clean slate.”
In July, a trade that would send Leonard to Toronto in exchange for Brandon Ingram, Gradey Dick, two first-round picks, two second-round picks and a pick swap was put on hold due to the ongoing investigation. Now that the punishment has been handed out, with Leonard receiving only a $700K fine and his contract not being voided, multiple reports expect the trade to go through in the coming days.
Could the Clippers (or the Raptors) potentially pull out of the trade? Technically, yes, but the Clippers would seemingly have no reason to do so other than spite. They need first-round picks more than ever and they’re getting a pair in this deal. Not to mention, welcoming back the player whose free-agent demands led to all of this mess wouldn’t seem to go over well with the local fans.
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Who is Uncle Dennis?
Uncle Dennis is Dennis Robertson. Some publications have referred to Robertson as Leonard’s adviser. Robertson is also Leonard’s actual uncle.
Robertson was investigated by the NBA in 2019 over whether he asked teams for impermissible benefits during Leonard’s free-agent process. Robertson was accused of asking for part ownership of the team, a private plane to be available to Leonard at all times and a guaranteed amount of off-court endorsement money that could be guaranteed to Leonard if he played for that team, per The Athletic. Ultimately, the league claimed it had no evidence that the Clippers granted illegal benefits to Leonard during his free agency. The team, Leonard and Robertson did not face punishment as a result of the investigation.
This time around, Robertson’s name was listed on a contract between Aspiration and KL2 Aspire LLC. The specific sentence pertaining to Robertson specified that all “communication required or permitted under this Agreement” be sent to Robertson. In addition to that, Robertson was listed in the contract as Leonard’s “designated representative.”
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Robertson’s name being on legal documents proves he had at least some involvement in the two companies involved in the alleged scandal. While Robertson’s name being on documents didn’t necessarily prove anything, it gave the NBA evidence to reopen its 2019 investigation into Leonard’s free agency and led to his five-year ban.
What is Aspiration, and how did they get involved? What services were they contracting Leonard to perform?
Aspiration was founded in 2013 as an environmentally conscious digital bank. While several notable celebrities and companies partnered with the company over the years, Aspiration signed a $300 million endorsement deal with the Clippers in 2021 and a $28 million deal with Leonard the following year.
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In September, Pablo Torre reported that Ballmer and the Clippers used Aspiration as a way to circumvent the NBA’s salary cap and pay Leonard more money to sign with the team in free agency. The deal with Leonard was reported essentially as a no-show marketing agreement.
Were other companies involved?
Yes. The NBA’s investigators said three additional companies — Boingo, Daktronics and Lockton — had similar little-to-no-work sponsorship deals with Leonard that Clippers executives helped cultivate.
According to the report, “Each agreement was signed by a company that had never before [and has never since] signed an endorsement agreement of remotely the same financial magnitude as the one it entered into with Mr. Leonard; and none of the companies has ever signed any other athlete endorser of Mr. Leonard’s caliber; each agreement imposed minimal performance obligations on Mr. Leonard relative to the amount he was paid; none of these agreements were publicly announced, defeating the foundational purpose of an endorsement agreement: to obtain associational benefits of the company’s relationship with the endorser; and investigators did not uncover or receive evidence reflecting that the companies exercised their rights for meaningful player activation; the record reflects that Mr. Leonard’s only confirmed activity under any of the agreements was a visit to a military base on a single occasion under one agreement and signing some memorabilia under another.”
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