SI:AM | Four Questions About the NBA’s Investigation Into the Clippers

Good morning, I’m Dan Gartland. I’ll be out for the next few days, but SI:AM will continue apace. Enjoy the first real week of college football.

In today’s SI:AM:
🔨 Clippers pay the price
🏈 What the NFL can learn from the Kawhi case
⚾ Tigers rookie’s historic debut season

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NBA rules in Clippers case

The NBA has finally announced the results of its investigation into the Clippers and Kawhi Leonard—and the fallout is significant.

The league levied the harshest punishment in its history, stripping the Clippers of five first-round draft picks (from 2029 to ’33), fining the franchise $30 million and issuing lengthy suspensions to three high-ranking executives, including owner Steve Ballmer. Leonard was fined $700,000.

But the story is far from over. Here are a few questions I have about the process and where things could go from here.

Will there be more revelations?

I read the whole 35-page report from the law firm Wachtell, Lipton, Rosen & Katz, and I think the most interesting part is on Page 21, under the heading “There is evidence of the Clippers funding an endorsement agreement.”

In the simplest terms possible, the NBA’s punishment is based on the investigation’s conclusion that the Clippers broke league rules by improperly facilitating endorsement deals for Leonard (among other things). Crucially, the investigation did not find conclusive proof that the endorsement deals were proxy payments from the Clippers. But there is evidence that they were, according to Wachtell Lipton, and the investigation isn’t over.

Page 21 of the report says “the Clippers’ misconduct may have been even more severe” than what the firm has been able to prove thus far. The investigators said they had spoken to a “credible witness” who said that one company’s consultant contract with the team “was in fact a ruse, designed and intended to be a vehicle for the team to provide the company with funds to be paid to Mr. Leonard.” Wachtell Lipton is continuing to investigate the claim in an attempt to corroborate it.

This is huge. A team actively soliciting off-court business for a player is already a significant violation of league rules. A team making payments to a player via a middleman is an even more severe violation of the salary cap circumvention rules. If the continued investigation finds that the Clippers did that, the NBA could hand down even harsher penalties. Ballmer should be very worried.

What happens to the trade with the Raptors?

The Clippers agreed to trade Leonard to Toronto all the way back on June 30, but the trade was put on hold pending the outcome of the investigation. ESPN’s Shams Charania reported yesterday that the trade “is expected to go down as-is.”

Did Kawhi get off easy?

The NBA dropped the hammer on the Clippers, but Leonard emerges relatively unscathed. He’ll pay a $700,000 fine as punishment for his role in the circumvention violations through the actions of his former business manager, Dennis Robertson, which included “pressuring the Clippers to assist him in obtaining off-court income opportunities, successfully obtaining those opportunities, and failing to reimburse payments by the Clippers for personal expenses.” Leonard said in a statement that he “accepts full responsibility for the lapses in judgment” by people within his inner circle and that he “entered into [his] contract with the Clippers as well as the agreements in question in good faith, fully committed to fulfilling [his] obligations and with no knowledge of any intent on anyone’s part to circumvent the salary cap.”

The Wachtell Lipton report doesn’t put a dollar figure on the total amount Leonard received, but it did find that he was paid $18 million by the end of August 2021 by three companies doing business with the Clippers (Boingo Wireless, Daktronics, and Lockton Insurance). That’s not even including the Aspiration deal.

The NBA was certainly more interested in making an example of the Clippers to send a message to other teams, but Leonard is not blameless here. It’s interesting that he was not issued a suspension along with his fine. Now he gets to leave town and wash his hands of the ordeal while the Clippers are left to deal with the fallout. He’ll be the butt of jokes for the rest of his career, but he’ll be laughing all the way to the bank after he signs an extension with the Raptors.

Will the Clippers sue?

The NBA considers the investigation’s findings and the penalties to be final. There is no appeal process available to the Clippers. The team could, however, choose to challenge the punishment in court.

The Clippers released a statement yesterday saying they “vehemently reject” the findings of “a heavily biased investigation” and that the public announcement differs from what the team was told privately. The team also sent a letter to commissioner Adam Silver in which it describes the investigation as a “witch hunt.” Are the Clippers mad enough about the investigation to file a lawsuit? That would be an aggressive step that keeps this story in the headlines for possibly years.

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The top five…

… things I saw last night:
5. Freddie Freeman’s first home run in nearly two months. His three-run shot in the first inning was his first homer since July 4. He went 47 straight games without a homer, the longest streak of his career.
4. CF Montreal midfielder Dani Pereira’s goal from the midfield circle after swiping the ball from an opponent.
3. Cardinals second baseman José Fermín’s sliding stop and throw from his backside.
2. An outstanding diving catch by the Cubs’ Nico Hoerner. He’s usually a second baseman, but he’s been playing some great shortstop with Dansby Swanson on the injured list.
1. Reds prospect Dominic Pitelli’s preposterous catch. He was positioned near second base but caught the ball all the way by the right field line.

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