Monday, August 15, 2005

An ugly paper trail follows Spirit feud - Atlanta Attorney

A few days before the feud reached the courtroom and the front page, it began to boil with testy e-mails and a hasty teleconference among the Hawks' owners.
While tensions between Steve Belkin and his Atlanta Spirit partners go back much further, their meltdown over the pending Joe Johnson trade began on the afternoon of Saturday, July 30. A volley of e-mails led to an early-evening conference call that culminated with Hawks general manager Billy Knight asking that his "intention not to speak to Steve under any circumstances going forward" be duly noted.

Things went downhill from there.
A rare glimpse into a fractious franchise emerges from documents — affidavits, letters, copies of e-mails and minutes of meetings — filed in the Boston court that last week issued, then lifted, an injunction blocking the Hawks' ownership group from removing Belkin as the team's NBA governor. The group plans to take that action within five days.
The battle, now extraordinarily public, began privately at 1:45 p.m., July 30, when Belkin sent an e-mail to his partners about a trade Knight had in the works. Brimming with basketball insider vernacular, the message tipped off his partners that a showdown was brewing.
"Phoenix is talking to Billy about a sign-and-trade for Joe Johnson," Belkin wrote. "Billy wants to give our LA/Boston '06 pick and Boris [Diaw] and our '06 first-round pick lottery-protected and then 1-3 protected in '07. I have told Billy not to include our '06 pick at all and this is our best offer."
(Translations: "LA/Boston '06 pick" is a draft pick the Hawks acquired in a trade last season — the lower of the Lakers' and Celtics' 2006 first-round picks. "Lottery-protected" means the Hawks keep the pick if it's in the top 14; "1-3 protected" means the Hawks keep the pick if it's in the top three.)
The spark that lit the fire
Belkin's e-mail roused his partners from whatever they were doing that last Saturday in July:
• 3:01 p.m.: Bruce Levenson sent an e-mail to Belkin, outlining seven reasons the trade should be made. Among them: "Boris . . . asked to be traded and would not get minutes on our team this year anyway. . . We would be making a mistake to risk losing JJ given our history of losing out on free agents and the expectations of our customers and sponsors."
• 4:48 p.m.: Michael Gearon Jr. sent a detailed message to Belkin making his case for the deal. "I am shocked to hear that Phoenix is not asking for a lot more from us," Gearon wrote. "I expected them to also ask for [Josh Childress or Josh Smith]."
• 5:20 p.m.: Belkin e-mailed Knight and Atlanta Spirit CEO Bernie Mullin "to make sure that you each understand the Hawks' decision-making structure." Belkin explained that, as governor, he "has the power and authority to manage the business and affairs of the team and to act for and bind the team without the consent of any other person." He acknowledged that he could be removed as governor if he made a trade or signed a player without the consent of his partners, but contended he could not be removed for blocking a trade.
• 6:09 p.m.: Gearon sent an e-mail to Mullin, asking him to set up a 6:30 p.m. "trade call" for the Board of Managers, which is the ownership committee on which the Atlanta, Boston and Washington groups have one vote each. "Please have Billy available," Gearon wrote.
• 6:30 p.m.: On the hastily arranged call, Knight got support for the deal from Gearon, representing Atlanta, and Levenson, representing Washington. "Steve said as governor he will not do the deal," according to the minutes of the call. "Bruce said that if [Belkin] vetoes this trade, Bruce will move to have Steve removed as the governor. . . Steve left the call." The minutes conclude: "Billy requested that the notes of the call reflect his intention not to speak to Steve under any circumstances going forward."
(About a week later, Knight told the Journal-Constitution that there was no reason for conversation with Belkin because he is "not telling the truth" about his motives for blocking the trade and is "not someone I can trust.")
Neither side blinks
Around midnight on July 31, Gearon e-mailed Belkin, telling him that "after you got off the call last night" the trade was approved, and Knight was instructed to "go forward with it." Gearon warned Belkin: "If you take any action as NBA governor to interfere with this trade, you will be removed."
The NBA moratorium on trades and free-agent signings was to expire two days later, on Aug. 2. Knight wanted to complete the deal then. On Aug. 1, Belkin's attorney informed the NBA via fax that "any representative of the Atlanta Hawks attempting to make such a trade" is unauthorized to do so. The NBA requires the governor's endorsement on trades before they can be completed.
Belkin's partners scheduled a Board of Managers vote for Aug. 5 to remove him as governor. On Aug. 4, Belkin got a temporary restraining order to block his removal. On Aug. 5, Gearon sent an e-mail to Belkin, pleading with him to let the Johnson trade go through.
"On behalf of D.C. and Atlanta [ownership groups], we are writing in an effort to preserve for this franchise a player acquisition which we believe is critical for its future," Gearon wrote. "We want to appeal to you to consummate a trade for [Johnson] on the terms negotiated by Billy Knight, or more favorable terms if you can achieve them, in the best interests of our franchise.
"Securing this opportunity for the future development of this franchise is more important to us than the opportunity to remove you as governor for blocking the trade. If you will authorize this trade, we will desist from any effort to remove you based on your actions blocking this trade."
Four days later, the owners squared off in a Boston courtroom — Belkin seated on one side, his partners and team officials on the other. Knight refused a handshake from Belkin. The judge referred to the Hawks as a team "in chaos."
It all boils down to money
The Atlanta Spirit group also owns the Thrashers, but the partners apparently have not clashed about the hockey team, which did not play last season because of the NHL lockout. Levenson is the Thrashers' NHL governor.
Beneath the surface of the discord is, not surprisingly, a debate about money. Belkin's partners, as well as Knight, contend that Belkin wants to spend minimally on player payrolls and is blocking the trade to avoid a five-year, $70 million contract with Johnson. Belkin contends he has approved the contract but wants to preserve "valuable assets" — the draft picks that would be dealt for Johnson.
Mullin, the Atlanta Spirit CEO, stated in a sworn affidavit filed in court that "during the budget debates" Belkin "recommended" a Hawks payroll of $32 million, "or otherwise as low as possible." The board later approved a payroll of $48 million for next season, according to Mullin's affidavit, and the new NBA collective bargaining agreement set a minimum of $37.125 million.
Belkin's position on the Johnson trade ignited long-simmering tensions between him and the rest of the group. The NBA had expressed concerns previously — in late February, when there was a disagreement between Belkin and his partners about use of All-Star Game tickets, and in late April, when NBA commissioner David Stern and a league committee met with Belkin, Gearon and Levenson and implored them to get along.
In a Feb. 25 letter to the owners — included in the court filings — NBA executive vice president of legal and business affairs Joel Litvin wrote that the league was "in receipt of a recent e-mail exchange between Mr. Belkin on the one hand and Messrs. Levenson and [Ed] Peskowitz on the other that reflects substantial discord among the owners of Atlanta Spirit LLC regarding the management of the Hawks.
"While the underlying issue seems, on its face, to be rather insubstantial — location of all-star tickets — the tone of the correspondence suggests that this discord is sufficiently serious it could affect adversely the operation of the team. . . . We view the current conflict among your ownership group as a matter of some urgency."

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