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.
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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.
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“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 has 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.
Aspiration was a jersey patch sponsor for the team, and Clippers owner Steve Ballmer invested $60 million in the company from 2021 through 2023. The Clippers and Ballmer have repeatedly denied violating league rules.
The Athletic has reached out to the Clippers and NBA for comment. A spokesperson for the SEC declined to comment.
The NBA hired Wachtell, Lipton, Rosen & Katz, a white-shoe New York law firm, to conduct the investigation. The firm has not released the results.
The Athletic reported in July that the law firm examined whether Leonard had a previously unreported endorsement deal with another company, according to multiple sources who spoke to The Athletic on condition of anonymity to speak freely. Those sources also said the law firm looked into whether the Clippers improperly covered Leonard’s expenses without being reimbursed.
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.