> ## Content Index > Fetch the complete content index at: https://www.sdnewswatch.org/llms.txt > Use this file to discover other available public pages before exploring further. # Daktronics part of NBA and SEC inquiry into team and player - URL: https://www.sdnewswatch.org/south-dakota-daktronics-nba-securities-kawhi-leonard-clippers/ - Published: 2026-09-04T20:30:40.000Z - Updated: 2026-09-05T00:00:32.000Z - Description: Brookings, S.D., company that makes scoreboards, video displays and signs confirms request for information over "impermissible endorsement arrangements." - Author: Bart Pfankuch - Tags: News/Investigations, Business The U.S. Securities and Exchange Commission and the National Basketball Association have requested information from Brookings-based electronic sign manufacturer Daktronics as part of their ongoing investigations into wrongdoing by player Kawhi Leonard and the Los Angeles Clippers team. The NBA named Daktronics as one of three companies that provided compensation to Leonard that circumvented the Clipper's league-issued salary cap by creating "impermissible endorsement arrangements" which paid Leonard money beyond his contractual salary. In a [35-page report](https://www.wlrk.com/docs/Report%5Fof%5FIndependent%5FInvestigators%5FConcerning%5Fthe%5FLA%5FClippers%5Fand%5FKawhi%5FLeonard.pdf?ref=sdnewswatch.org) written by an independent investigator on behalf of the NBA, the league said it found that the Clippers had "initiated, facilitate and induced" Daktronics and two other companies to pay multi-million endorsement deals to Leonard in order to secure business opportunities with the Clippers. ![](https://storage.ghost.io/c/cb/ab/cbabab5e-2dc6-462c-94a0-b72956c0d224/content/images/2026/09/20241205-110001-165-BRKG-PIX-120524-Daktronics-1-1.jpg) A warehouse at Daktronics in Brookings, S.D, in 2024\. (Photo: Brookings Register) The report notes that Daktronics paid Leonard $8 million and ultimately did win the contract to supply the electronic signage, including a reportedly $100 million "halo board" at the Intuit Dome in LA, where the Clippers play home games. So far, Daktronics has not formally been accused of wrongdoing or lawbreaking, though the company played a major role in the scandal involving Leonard and the Clippers, according to the NBA. The violations of NBA rules – which place limits on how much a team can spend on player payroll – led the league on Sept. 2 to hand down some of the harshest penalties ever issued against a player or team. They included a $30 million fine for the Clippers, a $700,000 fine for Leonard, forfeiture of five future first-round draft picks for the team and suspension of several team officials, including billionaire owner Steve Ballmer. Daktronics, founded in Brookings in 1968, is a "world leader in designing, engineering and manufacturing digital LED display technology and audio systems," according to the company website. The publicly-traded company has 2,700 employees worldwide. ## Daktronics confirms NBA, SEC inquiries Key company officials include president and CEO Ramesh Jayaraman and acting chief financial officer Howard Atkins. Atkins confirmed the company has been asked to provide information about the Clippers/Leonard investigation during a Sept. 2 quarterly earnings call with the SEC, an [archived webcast ](https://edge.media-server.com/mmc/p/gdqtdhos/lan/en/?ref=sdnewswatch.org#Slides%5F6)of which is available at the Daktronics website. "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," Atkins said on the call. ****Get free, fact-based South Dakota news and information** in a weekday email. No spam. Cancel any time. [Subscribe ](https://www.sdnewswatch.org/#/portal) "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 Mr. Leonard. We take these requests seriously and are cooperating." Daktronics did not respond to multiple requests for comment over the past week. During the SEC earnings call, Atkins said, "At this point, out of respect for the respective processes, we will not be providing further comment." ## NBA report firm in conclusions of wrongdoing Under the scope of its governing laws and rules, the SEC has authority to monitor and investigate financial dealings by professional sports teams. It is not yet clear if any SEC laws were violated by Leonard, the Clippers or Daktronics. However, the NBA said in a Sept. 2 news release that an internal investigation of the matter clearly found that league rules were violated and that strong penalties were warranted. "The LA Clippers and Kawhi Leonard have been penalized for violating the salary cap circumvention rules contained in the league’s Collective Bargaining Agreement with the National Basketball Players Association," according to the statement. "The investigation found a pattern of misconduct and multiple significant rules violations by the Clippers organization, a prior offender of the salary cap circumvention rules." ****Got a story idea, tip or question about something we should look into?** Email at the link below. We won't share your ID without permission. [Send a news tip ](mailto:news@sdnewswatch.org) More specifically, the NBA said the violations included: - Affirmatively initiating off-court income opportunities between Leonard and four companies doing business with the team: Daktronics, Aspiration Partners, Boingo Wireless and Lockton Insurance - Facilitating endorsement agreements between these companies and Leonard - Inducing the companies to enter into these agreements by offering them business from the team - Paying personal expenses on behalf of Leonard and his representatives - Failing to report improper solicitations for off-court income opportunities made on Leonard’s behalf through his former business manager, Dennis Robertson The NBA further stated: "Mr. Leonard, through the conduct of Mr. Robertson on his behalf, violated the circumvention rules by pressuring the Clippers to assist him in obtaining off-court income opportunities, successfully obtaining those opportunities, and failing to reimburse payments by the Clippers for personal expenses." ## Report: Daktronics paid millions to Leonard The NBA investigative report further finds that Daktronics and two other companies by August 2021 had paid Leonard $18 million in a "highly unusual" arrangement. The report refers to the financial agreement as a "spend back" arrangement, "whereby Daktronics would provide some amount of business back to the Clippers, which Daktronics told investigators is not uncommon in its industry." "In May 2020, in a call with a senior executive of Daktronics, a senior Clippers’ executive specified the precise financial terms that the Clippers expected Daktronics to provide to Mr. Leonard in the endorsement agreement: $3 million per year for two years." ![](https://storage.ghost.io/c/cb/ab/cbabab5e-2dc6-462c-94a0-b72956c0d224/content/images/2026/09/PHOTO_LA-Clippers_Intuit-Dome_Halo_01.jpg) The "halo" signage is shown at the Intuit Dome in Los Angeles. (Photo: Daktronics website) The report noted that after prodding from the Clippers, Daktronics later increased the final payment to Leonard by an additional $2 million. "In February of 2021, before the end of the first year of the Daktronics-Leonard endorsement agreement, the same senior Clippers’ executive approached Daktronics again. This time, the Clippers’ executive told Daktronics that, because the team had decided to increase the amount it would spend on the scoreboard, Daktronics should correspondingly increase the amount it would pay to Mr. Leonard. After some negotiation — and again based on its concern that failing to comply could jeopardize its business with the Clippers — Daktronics ultimately agreed to increase its second-year payment to Mr. Leonard by $2 million," the report stated. The scandal first came to light – and prompted the NBA investigation – after reporting by investigative journalist Pablo Torre for his podcast "Pablo Torre Finds Out," for which he recently won a national Edward R. Morrow Award. ## Strong first quarter for Daktronics Other than the references to the NBA and SEC inquiry, the earnings report by Daktronics for its first-quarter of fiscal year 2027 report was mostly positive. "I am proud of our executive team and our employee base as we continue to build the business together," Jayaraman said during the call. According to the report, Daktronics had net sales of $235 million in the first quarter of FY27, a 7.1% increase over the same quarter last year in its five product divisions that include live events, commercial properties, transportation signage, high school sports and international sales. ****Are you doing your part?** South Dakotans need free, fact-based news and information. Help us provide it. [Donate now ](https://www.sdnewswatch.org/donate/) Atkins said that operating income was $24.9 million, a year-over-year increase of 7.2%, while net income of $19.4 million was an 18% jump over first quarter of the prior year. Earnings per share rose 21.2% during first quarter, he said. Highlights from the previous quarter included strengthening executive staffing, completion of a new production plant in Mexico and rollout of Camino 8, a new graphics technology, Atkins said. The only downward trend came in orders in first quarter FY27, which were $192 million, a decrease of 19.6% year-over-year. But Atkins said the company has a backlog of orders valued at more than $311 million and is beginning to receive tariff refunds from the federal government. "It was another great quarter, carrying forward the momentum we had at the end of fiscal '26 into the first quarter with a really good tailwind," Atkins said. [Share your thoughts on this story](https://docs.google.com/forms/d/e/1FAIpQLScdTmGFf24Uhwiwd%5FndSxHkv6oBGSAy1LxF9BbwRbhBK5KflA/viewform?usp=sf%5Flink&ref=sdnewswatch.org) **South Dakota News Watch* is an independent nonprofit. *Read*, *subscribe* for free and *donate* at* [*sdnewswatch.org*](http://sdnewswatch.org/?ref=sdnewswatch.org)*. *Contact* content director Bart Pfankuch:605-937-9398/* [*bart.pfankuch@sdnewswatch.org*](mailto:bart.pfankuch@sdnewswatch.org)*.*