The Los Angeles Clippers finally got an answer on the NBA’s cap circumvention investigation, but it’s not the one they were hoping for. Despite claiming innocence and complying with the league throughout the process, NBA Commissioner Adam Silver came down with strict penalties, including a $30 million fine, the loss of five draft picks, and suspensions for several Clippers executives.
Instead of accepting their losses, however, the Clippers plan to fight with everything they have. After making their initial statement today, they shared their official email to the Commissioner, in which they called him out on the way this investigation was conducted. According to the Clippers, they worked tirelessly to comply with the league office, committing millions of dollars and many hours to prove their innocence.
“Almost one year ago today, you announced that the league would be investigating podcast allegations that the Los Angeles Clippers engaged in salary cap circumvention by funneling money to Kawhi Leonard through a ‘no-show’ contract with a Clippers sponsor, Aspiration. In announcing that investigation, you represented that ‘due process’ and ‘a fundamental sense of fairness’ would govern the process. You made clear that the ‘burden [would be] on the league’ to prove any violation through actual evidence, not ‘mere appearances.’ And you concluded by promising that everyone involved in the investigation would be treated ‘the same way I would want to be treated if people were making allegations against me.'”
“Unfortunately, none of those promises have been kept. In the last year, Steve Ballmer has spent nearly $50 million funding an investigation by Wachtell, Lipton, Rosen & Katz that has stretched far beyond the bounds of what the league set out to investigate, let alone the bounds of ‘fundamental fairness.’ The Clippers have produced more than 30,000 documents and provided more than 20 witnesses who have sat for 30 interviews.”
“Third parties, including Clippers business partners and sponsors, have likewise provided documents, interviews, and statements to investigators. Mr. Ballmer has reimbursed the costs of at least six law firms, many of which were hired at the demand of the league’s lawyers. To say the investigation has been a distraction would be an understatement—Clippers employees have spent thousands of hours scouring document repositories, phones, messaging systems, central files, and accounting records, working with counsel, and sitting for interviews. This investigation has permanently strained relationships with key Clippers stakeholders.”
It’s more than money and picks that the Clippers have lost. Ballmer’s reputation has also taken a hit, and relations with stakeholders have been severely strained. What’s worse is that the Clippers claim they were given no warning about the NBA’s ruling. Up until recently, they had the impression that they’d be cleared of wrongdoing, only to be convicted without the opportunity to respond right away.
“Mr. Ballmer’s reputation has been irreparably damaged as he now finds himself embroiled not only in this heavily biased investigation but in civil litigation, the Aspiration bankruptcy proceeding, and more. It seems increasingly likely that Mr. Ballmer will spend years defending himself and the team against a podcaster’s baseless claims. We have already detailed for Wachtell our concerns about the ways in which this process was designed to substantiate a predetermined outcome. But suffice it to say that you would not want to be treated the way that Mr. Ballmer and Clippers personnel have been treated during the past year. To what end?”
“League counsel has acknowledged in our discussions that the league does not believe there was an agreement between the Clippers and Aspiration to funnel money to Kawhi Leonard. League counsel also agreed with the Department of Justice, the Securities and Exchange Commission, and a federal judge that Mr. Ballmer was a victim of Joe Sanberg’s fraud—not a participant. Nonetheless, with less than an hour’s warning and no opportunity to respond, the league has issued a report and accompanying press release purporting to conclude the exact opposite of what it has said privately. None of this comports with any fundamental sense of fairness.”
The Clippers did not directly funnel money to Kawhi Leonard through these endorsement deals, but they were still far too involved in helping him secure revenue outside of his NBA contract, including no-show endorsement deals with Aspiration and Daktronics, companies once associated with Ballmer and the Clippers. According to the Clips, however, their involvement in those deals (which they call introductions) is completely legal and not outside the norm, suggesting other teams and players might have similar arrangements. They even cited the NBA’s previous investigation from several years ago, which failed to find any evidence against them.
“Instead, the league is intent on punishing Mr. Ballmer and the Clippers based on an entirely new theory: that the Clippers introduced Kawhi Leonard, at his request, to certain team vendors and sponsors. Wachtell has known about these introductions for months, yet raised them only at the eleventh hour—a pivot that demonstrates the league’s predetermined decision to reach an adverse finding here. But more importantly, and as you well know, such introductions are both proper and commonplace in the league. We are confident that if the league spent $50 million investigating any team, it would find plenty of instances of team personnel making introductions to both sponsors and vendors in response to player requests.”
“That is unsurprising because no league rule prohibits teams from making such introductions. Indeed, the Clippers’ agreement to introduce Kawhi Leonard to team sponsors and vendors was the subject of a league investigation conducted more than seven years ago—an investigation that was concluded with no penalty or finding of wrongdoing. And as you know, high-ranking league officials, including Rick Buchanan, knew the Clippers were making introductions like these, in response to a player’s requests, and raised no concerns about that approach.”
“There is no due process in relitigating the league’s prior investigation and finding fault with behavior that the league knew about back in 2019. And retroactively punishing the Clippers for violating a rule that never existed is hardly consistent with due process.”
Finally, the Clippers conclude their email with a clear and powerful show of resistance. They accuse the investigation of being heavily flawed, call out the league for not giving them a heads-up on the decision, and announce their plans to fight back with everything they have.
“This investigation has been flawed from the outset. And your decision to issue this report without any notice to the Clippers or their counsel is inexcusable. This type of witch hunt flies in the face of fundamental fairness and of the integrity of the league and of this sport that we all love. We are exploring every legal remedy to address this gross injustice.”
It’s clear from this lengthy email that the Clippers have no intention of accepting the NBA’s ruling here. They continue to claim their innocence and take issue with how this entire investigation has played out. But after a years-long quest to discover the truth, Adam Silver is showing no signs of reversing his decision, and it raises questions as to how far the Clippers will go to avoid the crippling list of penalties.
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