The Securities and Exchange Commission and the NBA have reached out to Daktronics for information regarding Kawhi Leonard and the LA Clippers, the company’s chief financial officer said Wednesday on an earnings call.
It was the first public acknowledgment that the NBA, and now a government agency, are examining the company and its reported sponsorship with Leonard.
The “Pablo Torre Finds Out” podcast reported last month that Leonard received millions in an undisclosed sponsorship deal with Daktronics, which manufactured the Halo video screen at the Clippers home arena, citing multiple anonymous sources with the NBA team and the Intuit Dome project.
“Let me now briefly address a matter that has been in the media concerning the NBA’s investigation of Kawhi Leonard and the Clippers in connection with the league’s collective bargaining agreement that many of you may have heard about,” Daktronics acting CFO Howard Atkins said on the company’s earnings call. “As you might expect, we have received requests for information from the NBA.
“Additionally, the Securities and Exchange Commission is seeking information from us concerning the company and Mr. Leonard. We take these requests seriously and are cooperating. At this point, out of respect for the respective processes, we will not be providing further comment.”
The NBA had been investigating the Clippers since last September for possible cap circumvention, beginning with a $28 million, no-work sponsorship contract between Aspiration — a now-bankrupt environmental company — and Leonard. The league announced the results of the investigation Wednesday, docking the Clippers five first-round draft picks, fining them $30 million and suspending owner Steve Ballmer for a year, among other punishments. The NBA hired Wachtell, Lipton, Rosen & Katz, a white-shoe New York law firm, to conduct the investigation.
Aspiration was a jersey patch sponsor for the team, and Ballmer invested $60 million in the company from 2021 through 2023. The Clippers and Ballmer have repeatedly denied violating league rules. In a two-page letter addressed to NBA commissioner Adam Silver Wednesday, David N. Kelley of the law firm O’Melveny and Myers called the league’s investigation a “witch hunt.”
“We are exploring every legal remedy to address this gross injustice,” the letter read.
The Clippers have since agreed to trade Leonard to the Toronto Raptors, the team with whom he won an NBA title in 2019, but the deal is on hold.
— Law Murray contributed to this story.