SEC investigating Daktronics in Kawhi Leonard case

The federal government and the NBA are investigating video display and scoreboard manufacturer Daktronics in connection with a scandal involving the Los Angeles Clippers in which the club allegedly circumvented the league’s salary cap to sign star player Kawhi Leonard.

During Daktronics’s first-quarter earnings call, chief financial officer Howard Atkins confirmed the company had received requests for information from the NBA and the Securities and Exchange Commission “seeking information from us concerning the company and Mr. Leonard.”

“We take these requests seriously and are cooperating,” Atkins said, according to Dallas Business Journal . “At this point, out of respect for the respective processes, we will not be providing further comment.”

Daktronics is at the center of a story published earlier this year by independent sports journalist Pablo Torre laying out how Leonard was allegedly paid millions by the company using money from the Clippers, which have a video board designed by Daktronics in their arena.

The Clippers signed Leonard to a three-year extension worth nearly $150 million in 2024.

Torre first reported on the Clippers and billionaire owner Steve Ballmer’s efforts to circumvent the NBA salary cap last fall, with the club denying the allegations and arguing it was defrauded by investors.

ESPN reported last month the NBA has no evidence to suggest Ballmer funneled money through team sponsors to pay Leonard directly, but rather, the league is focused on “whether the team’s introduction of Leonard to team sponsors constitutes a violation of the league’s rules prohibiting salary cap circumvention.”