(Photo / Daktronics)
BROOKINGS, S.D. (KFGO) – An investigative report released by the NBA has detailed the involvement of Brookings-based Daktronics in the Los Angeles Clippers’ salary cap circumvention scheme. The league announced Wednesday it had punished the Clippers for sponsorship deals involving forward Kawhi Leonard that violated league rules.
The Clippers were ordered to forfeit five first round draft picks and multiple team executives, including Owner Steve Ballmer, were suspended from team and league activities.
In a 35-page report conducted by an independent investigator, it was discovered that the Clippers had initiated, facilitated and induced Daktronics, along with two other companies, to enter endorsement deals with Leonard in exchange for business with the Clippers organization.
The report says in 2020, Daktronics was competing for a lucrative contract to supply the video scoreboard and signage at the Intuit Dome, an arena opened in 2024 where the Clippers play home games. The Clippers told Daktronics that they would give them the contract in exchange for a spend back agreement.
The Clippers later told Daktronics the spend back could be completed through an endorsement deal with Leonard worth $8 million over two years. The report states that Daktronics was concerned if they did not sign Leonard to an endorsement deal, they would lose the contract for the Intuit Dome.
Daktronics was responsible for a LED video board that wraps around the arena and includes 52,000 square feet of LED. Daktronics says it is the largest 4K UHD LED ever built.
“For the screen itself, we went to South Dakota, where Daktronics sets the standard. Daktronics and its strong local employment force shipped every single piece of this board across the country on schedule” Gillian Zucker, who was suspended as part of the NBA’s punishment as Clippers President of Business Operations, said.
The endorsement deal raised concerns with investigators because it was worth a large amount of money for the services Leonard returned to Daktronics. The deal was also signed during the COVID-19 pandemic, when a lot of companies were not signing endorsement deals. Investigators also questioned why Daktronics would sign a high-caliber player like Leonard to an endorsement deal, since they have not signed any athletes of similar popularity and the deal was never publicly announced.
During an earnings call Wednesday afternoon, Daktronics CFO Howard Atkins said that the NBA and Federal Government were investigating the endorsement deal.
“As you might expect, we have received requests for information from the NBA, additionally, the Securities and Exchange commission is seeking information from us concerning the company and and Mr. Leonard. We take these requests seriously and are cooperating.” Atkins said.
The report released Wednesday did note that of the four companies being investigated, Daktronics was one of two that had provided substantial cooperation.
After the punishment was handed out by the NBA Wednesday Afternoon, Commissioner Adam Silver made the following statement.
“The NBA’s collectively bargained system for determining player compensation is a fundamental component of the basketball competition that the league oversees for the benefit of the teams and players and ultimately the fans. I am deeply disappointed by the flagrant violations of our rules and by the Clippers’ institutional and leadership failures that led to this misconduct. The severity of the penalties reflects the seriousness of the violations.” Silver said.
The investigation into the Clippers organization, Kawhi Leonard, and the companies involved, including Daktronics, began after an investigative report from independent journalist Pablo Torre, on his podcast ‘Pablo Torre Finds Out’. The initial report can be seen here.
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