After almost exactly one year since the investigation started, the NBA handed out penalties on Wednesday from its probe into the Los Angeles Clippers and Kawhi Leonard over cap circumvention regarding endorsement deals Leonard signed while in L.A. The Clippers were docked five first-round draft picks and fined $30 million while owner Steve Ballmer and other execs were suspended. Leonard will have to pay the NBA $700,000, but he was not suspended.
The penalties for the Clippers mirror what the Minnesota Timberwolves received the last time there was a major cap circumvention case. The one more than 25 years ago was about a contract given to Joe Smith. But the major difference involves what happened to the player involved.
Forfeit 5 NBA Draft picks (two returned) Owner Steve Ballmer suspended for one year Owner Glen Taylor suspended for one year President of Basketball Operations Lawrence Frank suspended for 6 months General Manager Kevin McHale suspended for one year President of Business Operations Gillian Zucker suspended one year The Clippers' fine is obviously steeper, but given franchise valuations have increased close to tenfold since then, it is in line with NBA inflation. Otherwise, the penalties on a team level are nearly identical -- Zucker got more punishment given she had a more central role, while Frank got slightly less than McHale did -- and the Clippers can hope the league will eventually return some picks if they avoid any further incidents. Smith had his $86 million deal with the Wolves voided and ended up only recouping a small portion of that, losing out on tens of millions of dollars, while Leonard will get a relative slap on the wrist in the form of a $700,000 fine that is barely a dent in the endorsement money he got.
Leonard was ordered to pay the league that figure "in connection with his violations." The main reason for that difference is that in Smith's case there was a written agreement between Smith and the Timberwolves to sign smaller deals to assist in keeping the Wolves cap sheet clean before he was given the larger deal. That evidence made it a cut-and-dried case, and Smith was forced to return to free agency, where he signed a small one-year deal with Detroit in 2000 before returning to Minnesota in 2001 -- albeit on a much lesser deal than the $86 million he initially thought he was going to get. In Leonard's case, for as much evidence as they found that the Clippers helped facilitate the no-show endorsement deals, there is nothing to indicate clearly that it was a stipulation of Leonard signing with the team.
Without a written agreement tying Leonard's deals to his initial agreement to sign with the Clippers -- or to re-sign on an extension -- the league would've had a much tougher time proving the connection to Leonard directly and would've almost assuredly gotten appealed by the Players Association. Instead, Leonard got hit with a fine that he and the NBPA were willing to accept, allowing the league to close the case internally without going through an appeals process and arbitration. Leonard, with one season remaining on his current contract, is still expected to be traded to the Toronto Raptors when the dust settles.
It's notable that when the Clippers and Raptors agreed to a trade, Leonard split from his longtime representation of Mitch Frankel and his infamous uncle Dennis Robertson -- the latter of whom was named numerous times in the investigation as the one pushing the Clippers for these deals. That perhaps helped Leonard's case, as Robertson was the one having direct communication with the Clippers pursuing these deals and as part of the league's ruling, Robertson is banned from any NBA business dealings. In any case, Leonard and the Raptors seem like the big winners in all of this, while the Clippers will spend the next decade digging their way out of this mess.
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