The NBA stripped the Los Angeles Clippers of five first-round draft picks, fined the team $30 million, suspended owner Steve Ballmer and two executives, and ordered Kawhi Leonard to pay $700,000.
The Clippers say they will explore every legal remedy. Martin Edel, who co-chairs the sports practice group at Goulston & Storrs, said the team already agreed to the commissioner's authority to do exactly this, and that arguing it never expected the authority to be used on itself is a losing position.
"So they're saying that notwithstanding their agreement to that, they never thought that would happen to them, so therefore they should be relieved of it. Not a very good argument."
Edel co-chairs the sports practice at Goulston & Storrs and has argued the college-athlete employment question with Grosso on this program before; he reads league discipline, NCAA eligibility litigation and sports-betting prosecutions as one industry.
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Here are the 7 takeaways that matter.
👤 Guest: Martin Edel, Co-Chair of the Sports Practice Group at Goulston & Storrs
🎙️ Host: June Grosso, host of Bloomberg Law on Bloomberg Radio
📰 Published: 9 September 2026 on the Bloomberg Law podcast feed
🟣 Apple Podcasts | 🔗 Episode page | ⏱️ 32 min
Key Takeaways
The endorsement deals paid Kawhi Leonard millions of dollars for no work at all
Edel on what Leonard did for a four-year, $28 million sponsorship: "I think the legal term is bupkis"
Losing a first-round pick every year from 2029 is the penalty with a precedent behind it
The forfeited-picks precedent is Joe Smith's hidden contract in the 1990s; Edel says he does not know where the $30 million figure comes from
The Clippers agreed in writing to the authority they now want a court to set aside
The commissioner's power to investigate and punish is non-arbitrable under the league and ownership agreements
Investigating before punishing is what makes the NBA's decision hard to attack
73 interviews and more than 200,000 pages, with proposed findings shown to both sides first
Professional athletes are going back to college because college now pays more
Some of the 42 plaintiffs said they earned less as pros than a school would pay them
A conference is suing its own member school and may vote to expel it
The Southeastern Conference adopted a rule on 25 August barring players who signed professional letters of intent, and has moved to remove LSU
Legalized betting reached every party in sports except the players
After the Supreme Court's 2018 ruling, 39 states, the District of Columbia and Puerto Rico wrote gambling laws, and prop bets made individual performances wagerable
1. The Sham Sponsorships
The Clippers issued a statement saying they did not do this. Edel's starting point was that a detailed investigative report by Wachtell Lipton, which he described as a well-known law firm, concluded otherwise.
The report's finding is that the owner helped route outside money to a player. Over a number of years, Edel said, Steve Ballmer, the principal owner, assisted Leonard through his uncle and agent Dennis Robertson — "Uncle Dennis, he calls him" — in putting together what seemed to be sham sponsorship deals
The clearest example is a deal with nothing on the other side of it. "Leonard, for instance, got $28 million over four years to deal with Aspiration Parks. What did he do for that? I think the legal term is bupkis. He did nothing"
There were also deals with Boingo, Daktronics and Lockton. Again, Edel said, Leonard did nothing and was paid millions in consulting fees, even though the companies, per the Wachtell Lipton report, "had no consulting arrangements with anyone"
Grosso put the purpose plainly — the deals were used to get around the salary cap — and Edel agreed: "Correct"
The motive was that a maximum contract was not considered enough. "Again, a player of Kawhi Leonard's stature was being paid tens of millions of dollars per year. But Uncle Dennis and supposedly Leonard thought that wasn't enough." What they wanted were sponsorship deals "which didn't require him to do anything"
Ballmer, his executive vice president for basketball operations and other executives facilitated the deals with those companies, according to the report
2. Five Years of Draft Picks
Asked what he made of the punishment, Edel took the components one at a time and separated the ones with precedent from the ones without.
"The Clippers lost each of their first-round draft picks for a five-year period starting in 2029—that's an enormous penalty"
The precedent for forfeiting first-round picks is Joe Smith, a first-round pick in the 1990s who had two contracts, one presented to the league and one hidden. The league found the hidden contract because Smith fired the agent who negotiated it and the agent handed it over
Smith was barred from invoking the Larry Bird rule, which Edel described as a rule dealing with how much a player could be paid and how much the team would charge under the salary cap. His contract was voided, and Edel believes it was the Minnesota Timberwolves that also forfeited a number of draft picks. "So that's where we get that number"
The fine is the part he cannot source. "The $30 million, I'm not sure where we get. I just haven't had the time to do all the research on that." He assumes some compensatory element and possibly a punitive one
The suspensions are the part he thinks is legally exposed. "Throwing executives out of basketball for a period of time, and both without pay—that, I think, presents a bit of a problem, how they can be suspended without pay"
Robertson was thrown out of basketball for five years
On the player's own fine: "And yes, Kawhi Leonard was fined $700,000, which is supposedly the amount he actually pocketed. Not entirely clear to me why he would pocket so little"
3. The Agreement They Signed
The Clippers wrote to commissioner Adam Silver promising to explore every legal remedy to address what Grosso read as "this gross injustice." Edel's answer separated having a remedy from having a case.
"Everybody always has a legal remedy. The question is, what is the likelihood of success or even them bringing a legal action?"
The obstacle is the contract the team signed. "They have to tell a court that they're undermining the very agreements they signed, the owner's agreement, the league agreement with the team, which gives the commissioner the unbridled authority to investigate and punish people who violate what goes on there." That authority, Edel said, is non-arbitrable under the agreement
The argument left to them is that they never expected it to be used on them. "So they're saying that notwithstanding their agreement to that, they never thought that would happen to them, so therefore they should be relieved of it. Not a very good argument"
The second obstacle is process, and Edel rated the league's higher than its peers'. "I think the one thing to keep in mind is what the NBA did here was it investigated before it acted. That's sometimes better than other professional leagues, which seem to have a more knee-jerk reaction"
The scale of the investigation, from the report: the firm "conducted 73 interviews, reviewed over 200,000 pages," and made each of its findings or proposed findings available to Leonard's attorney and to Ballmer and the Clippers' attorney so they could challenge them or supply more information
Private leagues do not owe due process, which is why supplying it matters. "That's at least the rudiments of fundamental due process. I mean, it's a civil action—due process doesn't apply to private leagues, but they've given them the rudiments of due process, which makes the challenge even more difficult"
4. Pros Going Back to College
Grosso turned to a Louisiana judge who issued a preliminary injunction against the NCAA on Friday, clearing the way for LSU to list some former NFL players on its roster, and asked whether the case is about professionals returning to college football.
Edel said it is broader. The NCAA said as a one-time matter that players who graduated in a particular year — "I forget the year, 2021 or 2022" — are entitled as a one-shot deal to be eligible for five years of college play
42 players sued in Louisiana state court across several sports, some from football, some baseball, some soccer, all claiming the right to play the fifth year
The part that inverts the usual assumption is the money. "Included among that group were certain professional players who claimed that they were making less money as professionals than they would as college players. And therefore, they should be entitled to receive their fifth year of eligibility and play again"
Some of the professional football players had played for Lane Kiffin at Ole Miss, so he was "sort of happy to take them back." Others had not, but LSU could promise them significantly more dollars than they were getting as pros to play that fifth year — "that's what the case was about"
5. NIL Beats an NFL Check
Grosso asked what she called a silly question — college is supposed to be four years, so how long are these players in school?
Some go through in four years and some in five, Edel said, and the ceiling keeps moving: "There were a couple of examples last season of some players seeking a ninth year of eligibility"
"The line between being a college student and being a professional employee at the college is rapidly evaporating"
The reason a professional contract can pay less is name, image and likeness money paid by the school. "That could amount to several million for a well-regarded player," Edel said
On top of that sits the House settlement: "There's something called the House case, which was a settlement for media revenues to be paid to college athletes, where the athletes now are entitled to, I think this is right, 22% of the media revenues that the school gets." That pool grows every year, and the school decides which players are eligible for the money
The school's discretion is the part that decides who gets paid. "I told my son, for example, that as a crew racer, he would probably get nothing. If he were a football quarterback, he might get, again, several millions of dollars from that settlement"
Grosso said college sports had completely changed and that the players used to be amateurs. Edel tied it back to the recurring question of whether college athletes are students or employees, one he noted the two of them have discussed before: "there's no hard and fast answer right now"
6. LSU vs. Its Conference
Asked to explain the ruling, Edel described a decision nobody has read yet and a conference that has started suing its own member.
"A judge who supposedly has some ties to LSU, but at least sits in Louisiana, ruled in favor of Louisianans." The decision is not public, but he granted an injunction letting the 42 players play the fifth year and barring any school or the NCAA from retaliating against them
Kiffin has announced he will not sign those five players yet. Edel said: "They weren't on his roster this past week where LSU clobbered its opponent—I think it was 51 to 10—but he's reserving that right"
The Southeastern Conference wrote a rule to stop it and Edel reads the rule as aimed at one coach. On 25 August the conference adopted a rule that no player who signed a notice of intent to play professional sports would be eligible to play college sports: "This may be the anti-Lane Kiffin rule"
The conference has opposed the ruling and said it will appeal, which had not happened as of the interview
It has also gone after its own member school, and the remedy on the table is expulsion. "The SEC has also filed a separate action against Louisiana State and Lane Kiffin to stop them from doing what they're doing, which they amended today to claim that they may, if LSU does not renounce what it has said it intends to do, take a vote to toss LSU out of the SEC. And that supposedly will occur Thursday"
7. Why Players Started Betting
Grosso raised the prosecutions of former NBA players Malik Beasley and Ed Davis, accused of changing their game performance to profit from illegal bets, and asked whether the charges match those facing Terry Rozier, who goes to trial next year.
Edel said: "Well, it's a different investigation, but it all stems from gambling by players, which is an enormous problem right now, not only for the professional leagues, but also for college sports"
Told that prosecutions have not stopped the conduct, he agreed: "Unfortunately, I think the answer is, decidedly, yes"
The starting point is the Supreme Court. "2018 was a watershed year. Why? Because the Supreme Court announced in Murphy against NCAA that the federal government could not tell the states they could not permit gambling"
Everyone with a claim on the revenue legalized it. "In the wake of that, 39 states, the District of Columbia, and Puerto Rico all enacted gambling laws to permit gambling." States were hurting, and leagues and teams needed the money
"One entity was left off the bandwagon: players." Edel put the obvious objection himself — "Now, you might say, okay, but a player in the NBA who's a supermax player is going to be making $60 million a year—why does that player need more money? And the answer is because he wants more money"
Prop betting is what made an individual player's performance wagerable. Betting began with the outcome of the game. "As FanDuel and DraftKings expanded their platforms, you suddenly had what we call prop betting. You could bet on any statistic of any player." His examples: "You want to bet the player will miss a shot? Go for it. You want to bet that a baseball player is going to get a strike on the next pitch? You can bet on that"
The result, Edel said: "And so you have them participating, sometimes through the mob, as we saw with Terry Rozier and his games, sometimes just illegally, because each of the leagues prohibits its players from betting on that sport's contests, outcomes, statistics"
Bonus Insights
Edel set prediction platforms aside as a separate subject: "I've not been getting into prediction platforms, which is a whole other conversation"
He and Grosso have covered the student-or-employee question on the show before, and he expects it to keep recurring
Grosso's own framing of why the Clippers will fight: the $30 million fine is a trifle to a franchise owned by one of the world's wealthiest people, and draft picks are not
Grosso closed the segment on the amount of money now involved in sports gambling
Edel's bottom line is that the Clippers' case is weak where it matters most — the team signed the agreement that hands the commissioner unreviewable authority, and the league documented its findings before using it — while the college and gambling cases are moving the other way, with courts, conferences and prosecutors all still working out who is a professional and who is not.
Products, Companies & Tools Mentioned
Los Angeles Clippers (Stripped of five years of first-round picks and fined $30 million; Edel says its legal path runs into the agreements it signed)
Wachtell Lipton (The law firm whose investigative report is the basis for the penalties — 73 interviews and more than 200,000 pages reviewed)
NBA (Edel credits the league for investigating before punishing, which he says makes the Clippers' challenge harder)
Boingo, Daktronics and Lockton (Three of the companies whose consulting and sponsorship deals with Leonard the report describes as paying him for no work)
Aspiration Parks (The counterparty on the four-year, $28 million deal Edel says required nothing of Leonard)
NCAA (Enjoined by a Louisiana judge from enforcing its eligibility limit against the 42 plaintiffs, and barred from retaliating against them)
FanDuel and DraftKings (Their platform expansion is what Edel says turned betting from the outcome of a game into a bet on any statistic of any player)
Books & Resources Mentioned
The Wachtell Lipton investigative report (The document behind the NBA's findings; Edel says the firm made its proposed findings available to Leonard's and the Clippers' lawyers before finalizing them)
Murphy v. NCAA (The 2018 Supreme Court decision Edel calls the watershed — the federal government could not stop states from permitting sports gambling)
The House settlement (The media-revenue settlement Edel says entitles college athletes to about 22% of the media revenues their school receives, with the school choosing who is eligible)
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