GoKawiilis a senior editor following news across tech, culture, policy, and entertainment. He joined The Verge in 2021 after several years covering news at Engadget.
Last September, Steve Ballmer insisted in an ESPN interview that the Clippers weren’t involved in a shady-looking $28 million endorsement deal for his star player, Kawhi Leonard, that involved no actual endorsing. Now, the former Microsoft CEO has been suspended by the NBA for a year, while the league says his team will forfeit five future draft picks and pay a $30 million fine, among other penalties.
A year later, an NBA-commissioned 35-page report by Wachtell, Lipton, Rosen & Katz is basically calling him a liar, saying those claims were “inaccurate (at best) with respect to Mr. Ballmer” and “clearly false” when it came to Clippers president of business operations Gillian Zucker, who is also suspended for a year. Leonard has accepted the punishment of a $700,000 fine and a ban for his business manager.
Now the Clippers are writing angry letters to the NBA, claiming a biased investigation spurred by “a podcaster’s baseless claims” has cost Ballmer $50 million for lawyers, cost more for his reputation, and upset partners like Daktronics, the company that built a massive 4K scoreboard for the team’s new arena, with its many, many bathrooms.
That unnamed podcast, of course, is Pablo Torre Finds Out, which is cited at the beginning of the document for kicking this whole thing off one year ago today.
The episode made largely unknown fintech startup / green bank / massive fraud Aspiration a household name, and launched a series by the former ESPN reporter and his team. Now the league’s report is filling out the role partners like Daktronics played in getting Leonard money above and beyond the NBA’s mandated salary cap and how it was tied to that massive scoreboard.
In the spring of 2020, and in response to a request-for-proposal process initiated by the Clippers, Daktronics began to compete to obtain a lucrative contract to supply digital scoreboard and signage technology at the Intuit Dome. In May 2020, the Clippers informed Daktronics that it was the team’s preferred provider for this project, but that the team wanted to agree on a “spend back” arrangement whereby Daktronics would provide some amount of business back to the Clippers—which Daktronics told investigators is not uncommon in its industry. Ms. Zucker thereafter suggested to a Daktronics senior executive that this “spend back” could be accomplished through an endorsement agreement between Daktronics and Mr. Leonard.
The report says that an unnamed Clippers executive told Daktronics exactly how much to pay Leonard ($3 million for two years), and eventually told the company in 2021 “that, because the team had decided to increase the amount it would spend on the scoreboard, Daktronics should correspondingly increase the amount it would pay to Mr. Leonard.”
As we mentioned at the time, costs for the eventual Intuit Dome had reportedly ballooned to over $2 billion, including the Daktronics-built “Halo Board,” a double-sided 44,000-square-foot wraparound 4K screen with a price said to be over $100 million. Said the now-suspended executive Zucker when it was announced, “We are excited to partner with Daktronics, an innovator in video displays, to develop a Halo Board that will create one of the most intense live experiences in sports.”
Daktronics, according to the investigators, along with now-incarcerated Aspiration cofounder Joe Sanberg and what remains of the company in bankruptcy proceedings, cooperated with the investigation. However, there are two other Clippers-affiliated companies apparently involved in paying Leonard an extra $18 million, including Lockton Insurance, which refused to cooperate, and Boingo Wireless, which should probably add an anti-snitching policy to its terms of service. According to investigators, Boingo “purported initially to cooperate, but then supplied information that was inconsistent or not credible to investigators and ultimately refused to cooperate further.”
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