Revelations from NBA Clippers investigation: What the report says about Uncle Dennis, other companies and more
“The investigation found a pattern of misconduct and multiple significant rule violations by the Clippers organization, a previous violator of salary cap circumvention rules,” the league said in a news release. Additionally, NBA commissioner Adam Silver said he was “deeply disappointed by the blatant violations” of NBA rules.
In addition to the aforementioned sanctions, the league also suspended Clippers president of business operations Gillian Zucker without pay for one year and suspended Clippers president of basketball operations Lawrence Frank without pay for six months, ordered Kawhi Leonard to pay $700,000 “in connection with his violations” and prohibited Leonard’s uncle and business manager, Dennis Robertson, from “conducting business or otherwise associating with NBA teams and their affiliates on behalf of or with respect to any player, employee or other league or team personnel” for five years.
The Clippers later issued a scathing statement saying they “vehemently reject” the NBA’s findings and “will vigorously contest these findings and sanctions through all avenues available to us.” The Clippers characterized the investigation, conducted by a law firm at the NBA’s behest, as “highly biased” and “seeking to justify a predetermined narrative rather than facts and evidence.”
Now that the research is complete, let’s take a look at some interesting aspects you may have missed:
Aspiration was not the only company involved
By now, everyone who has followed this story is familiar with the now-bankrupt company Aspiration, which was at the center of this scandal. However, that was not the only company involved. The investigation found that the Clippers “initiated, facilitated and induced Boingo, Daktronics and Lockton to enter into agreements with Mr. Leonard.”
Boingo is a provider of wireless networks and other communications, Daktronics is a manufacturer of scoreboards and video displays, and Lockton is an insurance brokerage. Here is more information from the summary report prepared by Wachtell Lipton:
“In early July 2020, a month after Ms. Zucker connected Mr. Robertson with Boingo, Daktronics and Lockton, Mr. Leonard signed (on the same day) multi-million dollar, multi-year sponsorship agreements with two of the companies. By the end of August 2020, he had signed a similar sponsorship agreement with the third company. By early September 2020, Mr. Leonard had received payments under each of these three. endorsement agreements.
“The total owed to Mr. Leonard under the Boingo, Daktronics and Lockton agreements was $18 million. The $18 million was paid to Mr. Leonard in August 2021.”
And more from Wachtell Lipton:
“The highly unusual nature of these three endorsement agreements with Mr. Leonard caused investigators to question why each company entered into them. The investigative record provides the answer: because the Clippers initiated, facilitated and induced these companies to enter into agreements with Mr. Leonard through the prospect of lucrative business deals with the Clippers.”
The Clippers agreed to Robertson’s demands
Just months after Leonard signed with the Clippers in 2019, Robertson began lobbying the organization to help his nephew generate additional off-the-court income. In fact, Robertson stated that he wanted at least $10 million a year for Leonard and presented the demands to Ballmer, Frank and Zucker.
Here, via Wachtell Lipton’s summary, are some of the notes Frank took in March 2020:
“Mr. Robertson complained to Mr. Ballmer that Ms. Zucker was making “introductions” for “bull business” and that ‘I [Mr. Robertson] not able [sic] serve [Ms. Zucker] – They have to pay me.”
“Mr. Ballmer responded by telling Mr. Robertson that he and the Clippers staff were all ‘pulling together to try to help.’ [Mr. Leonard] achieve their financial goals,’ and Ms. Zucker assured Mr. Robertson that Mr. Ballmer ‘will keep his promise.'”
Mr Robertson requested a period of between 3 and 6 months.[] plan’ for more lucrative presentations by the Clippers, a list of ‘5-6 companies’ in the process of ‘potential presentations’ and more frequent and consistent communication from Ms. Zucker.”
Additionally, Wachtell Lipton found “hundreds of cases in which the team paid for personal air and ground travel, accommodations, gifts and tickets” for Robertson and other members of Leonard’s family “without then properly deducting the amounts of these expenses from Mr. Leonard’s salary (as required by CBA rules).”
While the investigation found that the “added financial value of these expense payments was only a fraction of the amounts” Leonard received from his endorsement deals with Aspiration, Boingo, Daktronics and Lockton, “it was nonetheless substantial.”
Why Zucker received a harsher punishment than Frank
Gillian Zucker, the Clippers’ president of business operations, was suspended without pay for one year, while Lawrence Frank, the Clippers’ president of basketball operations, was suspended without pay for six months. Because?
Wachtell Lipton’s summary report stated that “Ms. Zucker made several statements that were found to be inconsistent with contemporaneous documents, other witness statements, and the broader chronology of events, professed a lack of recall on important issues, attributed responsibility to subordinates, and offered inconsistent interpretations of events in separate interviews.”
By contrast, Frank “openly discussed with investigators his conduct during the relevant period, recalled details of key events, took responsibility for his subordinates’ actions, and was generally consistent in his interviews.”
In other words, Zucker lied and Frank didn’t. Additionally, the investigation found that Zucker had personal relationships with two of the companies that signed Leonard to endorsement deals at the Clippers’ behest.
“Ms. Zucker had personal relationships at two of the companies. In one, her husband was chairman of the board during the relevant period, and also had a 30-year working relationship with the CEO of that company. In another, Ms. Zucker had a long-standing relationship with the company’s president (the person who signed the company’s sponsorship agreement with Mr. Leonard), and recommended him as “really good people” in an email to an internal colleague in charge of the Clippers’ sourcing process at this area.”
Ultimately, Zucker was the one who “initiated and facilitated Mr. Leonard’s endorsement deal with Aspiration.”
