NBA just sent a warning to every billionaire owner with Kawhi Leonard ruling
The NBA’s $30 million penalty was aimed at the Clippers.The five missing first-round picks were a warning to every billionaire owner like Steve Ballmer.By hammering Los Angeles for circumventing the salary cap through off-court opportunities for Kawhi Leonard, the NBA did more than punish one franchise.It drew a boundary around one of the biggest advantages available to modern owners: the enormous business networks surrounding their teams.According to the 36-page report from independent investigator Wachtell, Lipton, Rosen & Katz, that boundary was hardly ambiguous.NBA rules prohibit teams from actively creating endorsement opportunities for players.
Investigators found the Clippers crossed that line, steering Leonard toward four companies doing business with the franchise and using Clippers business to help induce those deals.The clearest example involved Daktronics.While competing for the Intuit Dome scoreboard contract, the company was encouraged to include a Leonard endorsement worth $3 million annually.
Investigators said Daktronics believed refusing could jeopardize its Clippers business.That is exactly the type of leverage that poses a problem for a salary-capped league — and the potential danger had already surfaced while the NBA was still investigating the relationships between Leonard, the Clippers and team sponsors.The cap is designed to keep the richest owners from simply buying better rosters.But modern sports billionaires possess financial power far beyond payroll: sponsors, corporate relationships, arenas, real estate and multiple franchises.That concentration was on display in Los Angeles just one day before the Clippers ruling, when Rams owner Stan Kroenke agreed to purchase the Angels for a record price of more than $3.9 billion.There is no suggestion Kroenke has done anything improper.
But adding the Angels to an empire already featuring the Rams, Nuggets, Avalanche, Rapids and Arsenal illustrates how much business influence can surroun...