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Clippers lose five first-round picks
The owner's suspension
Owner Steve Ballmer is suspended for one year from all league and team activities, which rules out games, practices, and owners meetings. The league cited him for knowingly seeking to help Kawhi Leonard obtain off-court income, for approving a business deal he knew was a precondition for Aspiration to sign an endorsement agreement with Leonard, and for failing to create conditions in which his organization followed the circumvention rules.
Executives and monitoring
Gillian Zucker, the Clippers' president of business operations, is suspended without pay for one year as the person primarily and directly culpable for impermissible endorsement arrangements and for providing false and misleading statements to investigators. Lawrence Frank, the president of basketball operations, is suspended without pay for six months. The organization and its personnel are also subject to a compliance and monitoring program.
The investigation
Leonard must pay the league $700,000, and his uncle and business manager, Dennis Robertson, is banned for five years. The penalties follow an investigation by the law firm Wachtell, Lipton, Rosen, and Katz, which conducted 73 interviews with 60 people and reviewed more than 200,000 pages of documents. The findings called Ballmer's lapse especially egregious because the Clippers were a prior offender, previously investigated by the NBA over Leonard.
How does the NBA salary cap actually work?
The NBA uses a soft cap, which lets teams go over the salary limit through exceptions such as re-signing their own players. A separate luxury tax line sits above the cap, and teams over it pay a fee on the excess. The rules are written into the collective bargaining agreement between the league and the players union. The league first adopted a salary cap in 1984.
Why are first-round picks worth so much?
First-round picks become players on rookie-scale contracts, which pay a fixed amount set by the draft slot. That makes them cheap for the first several seasons, even when the player turns out to be a star. Teams also trade picks as currency to acquire established players, so losing several limits what a team can offer in trades. Draft picks are among the few assets every team in the league holds in the same quantity each year.
How can a league suspend an owner?
Owners agree to the league's constitution when they buy a franchise, and it gives the commissioner authority to discipline owners for conduct that harms the league. The Board of Governors, made up of the team owners, can vote to force the sale of a franchise, which takes a three-fourths majority. Fines and suspensions fall short of that step and sit within the commissioner's own powers.
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