Kawhi’s Slap on the Wrist

LA WATCHDOG - The LA Clippers of the National Basketball Association and Kawhi Leonard are being penalized for violating the salary cap circumvention rules contained in the NBA’s Collective Bargaining Agreement with the National Basketball Players Association. This penalty is based on an independent investigation by Wachtell, Lipton, Rosen & Katz, a highly regarded New York City law firm.

As a result, the Clippers will forfeit five first round draft picks (2029-33), having already traded away their next two first round picks.

Owner Steve Balmer is being fined $30 million and suspended from all league and team activities for a year for part in helping Kawhi obtain off-court revenue.

Two other Clipper employees are also suspended for six months and a year without pay for their part in the circumvention scheme. 

According to the Wachtel Lipton report, Leonard received $68 million in off court revenue from four companies that had financial arrangements with Balmer and/or the Clippers.   For his role, Leonard was fined $700,000 by the NBA, about 1% of the $68 million he “earned” for his no-show contracts.

During his seven-year tenure with the Clippers, Kawhi has earned almost $300 million.  And over his playing career, his total earnings are expected to be in the range of $540 million, including his seven-year stint with the San Antonio Spurs and his past and future years with the Toronto Raptors.

While one may argue that $68 million is chump change, Leonard knew, or should have known, that these payments violated the circumvention rules.  And yet he proceeded with this scheme, perhaps at the urging of his uncle and business manager who is banned for five years.

It appears that Leonard is protected by his union’s agreement with the NBA. This is not right.  If there were appropriate penalties, Leonard would be forced to surrender these ill begotten gains, and then some, not to the four affiliated companies or the Clippers, but to a LA based charity.

In the future, players and their agents should be responsible for their actions and pay the price and not be protected by the agreement between the NBA and the Players Association.

We in LA will pay the price as the Clippers, stripped of their five first round draft picks, will be a non-competitive team for the next decade, tainted by this scandal, playing in front of scant crowds paying bargain basement prices.      

(Jack Humphreville writes the LA Watchdog column for CityWatch, where he covers city finances, utilities, and accountability at City Hall. He is President of the DWP Advocacy Committee, serves as the Budget and DWP representative for the Greater Wilshire Neighborhood Council, and is a longtime Neighborhood Council Budget Advocate. With a sharp focus on fiscal responsibility and transparency, Jack brings an informed and independent voice to Los Angeles civic affairs. He can be reached at [email protected].)