The Securities and Exchange Commission and the NBA have contacted Daktronics seeking information related to Kawhi Leonard and the Los Angeles Clippers, the company’s acting chief financial officer said during an earnings call Wednesday, according to The Athletic.
The disclosure marks the first time Daktronics has publicly acknowledged that both the NBA and a federal government agency are examining matters involving the company and its reported endorsement arrangement with Leonard. The development follows a report last month from Pablo Torre, who alleged that the 35-year-old NBA forward had a previously undisclosed endorsement agreement with Daktronics.
“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 during the call. “As you might expect, we have received requests for information from the NBA,” he revealed.
The NBA’s investigation into the Clippers began last September, with the league examining a reported $28 million sponsorship agreement between Leonard and Aspiration under which the player allegedly received compensation despite having no work obligations. The Clippers were fined $30 million, while Leonard received a $700,000 penalty for violating the NBA’s salary-cap circumvention rules. The league’s investigation concluded Wednesday, however, with significant penalties for both the organization and Leonard.
