DALLAS — The Securities and Exchange Commission is seeking information from Daktronics concerning Kawhi Leonard, acting chief financial officer Howard Atkins said Wednesday on the company’s fiscal 2027 first-quarter earnings call.
Daktronics is the South Dakota manufacturer that designed the Halo Board inside Intuit Dome, the Los Angeles Clippers arena that opened in August 2024. The NBA has been investigating the Clippers since September 2025 over whether the team circumvented the salary cap in compensating Leonard, and Atkins said the league has also requested information from the company.
Atkins reported $155 million in cash and $10 million in debt at the end of the quarter. He saved the disclosure for the end of his prepared remarks.
“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,” Atkins said. “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,” Atkins continued. “At this point, out of respect for the respective processes, we will not be providing further comment.”
Chief executive Ramesh Jayaraman did not mention the NBA or SEC inquiry. Analysts did not ask about either one. Their questions instead focused on live events order timing, tariff refunds, margins, and Daktronics’ new Mexico plant.
Pablo Torre Report Preceded the SEC Inquiry
Pablo Torre reported Aug. 7 with Sammy Koppelman and Hunterbrook Media that Leonard had an undisclosed Daktronics sponsorship agreement worth multiple millions of dollars. Torre cited a high-level source under contract for Intuit Dome who said Clippers money went through Daktronics to Leonard. A former Clippers official told Torre that Leonard’s role as a Daktronics spokesperson had been talked about openly within the organization.
Torre wrote Wednesday that the SEC investigation follows his ongoing reporting with Koppelman and Hunterbrook Media on the Clippers and cap circumvention.
Hunterbrook Media reported that a Daktronics spokesman said Leonard did not have an active contract with the company. Asked what that meant, the spokesman said he did not know what the company wanted to say, or could say, given the Wachtell investigation. Hunterbrook reported that it found no evidence Leonard performed work for Daktronics.
Torre first reported the Clippers investigation on Sept. 3, 2025, detailing a four-year, $28 million endorsement deal between Leonard and Aspiration, a company Steve Ballmer had backed with $50 million. Aspiration co-founder Joe Sanberg pleaded guilty in October 2025 to defrauding investors and was sentenced to 14 years in prison. Ballmer and the Clippers have denied circumventing the cap and have said they were defrauded.
Wachtell, Lipton, Rosen & Katz is directing the NBA’s investigation. The Athletic reported in July that the firm had expanded its scope to a second endorsement deal and to expenses the Clippers covered for Leonard. ESPN reported July 29 that the inquiry could extend into 2027 if the parties do not agree on the findings. ESPN reported Aug. 17 that the league had not found evidence the Clippers funneled money to sponsors to pay Leonard, and that it was weighing whether to penalize the team over how it supervised employees who introduced Leonard’s representatives to sponsors.
The Toronto Raptors trade involving Leonard remains on hold. Commissioner Adam Silver said in July that his hope was to have the investigation completed before the 2026-27 season.
Daktronics Displays at Globe Life Field and American Airlines Center
Daktronics’ relationship with the Texas Rangers dates to 1994. At Globe Life Field, the company designed the display system that debuted with the ballpark in 2020, including eight LED displays and an IPTV system feeding more than 1,450 screens. Daktronics also put in two marquee LED displays at American Airlines Center, home of the Dallas Mavericks and Dallas Stars, ahead of the 2016-17 seasons.
Daktronics earned $0.40 a share in the quarter on $234.57 million in revenue. Its gross margin reached 30.5%, compared with 29.7% a year earlier. Backlog was $311 million going into the second quarter. That kept the figure above $300 million for a sixth straight quarter. Daktronics shares traded at $21.24 before the market opened Wednesday, up 9.71% from Tuesday’s $19.36 close.
No completion date has been announced for the NBA investigation.
