Judge Upholds Three Rich NBA Contracts : Pro basketball: League had said deals for Green, Dudley and Kukoc circumvented salary cap.
In the NBA, this will be remembered as the summer everyone sued everyone else.
In its latest case, the league, determined to close the loophole in its salary cap, went to court against four players, lost three of the cases, got no ruling in the fourth but claimed “a very important victory.”
U.S. District Judge Dickinson Debevoise upheld the contracts of the Phoenix Suns’ A.C. Green, the Portland Trail Blazers’ Chris Dudley and the Chicago Bulls’ Toni Kukoc after a 90-minute hearing Monday in Newark, N.J. Dickinson rejected the NBA’s claim that the lucrative contracts--each signed after the player was given a one-year termination clause in his earlier contract--circumvented the salary cap.
Debevoise didn’t rule in the case of Horace Grant, the former Bull who was signed by the Orlando Magic. His contract also was struck down by the league.
Grant’s deal is the most closely watched because it tilts the balance of power in the Eastern Conference. With Grant, a top power forward, the Magic would be a division favorite.
Grant’s attorneys said they will seek an immediate hearing. Magic officials said if the judge found a problem with this contract, they would write another one.
That was as close as the league came to winning anything Monday, but NBA officials claimed to be pleased.
“We just have to show in each case the contract is a circumvention of the cap,” said Jeffrey Mishkin, senior vice president for legal and business affairs.
“All new contracts can now be challenged. We think this is a very important victory for the NBA.”
Salary cap rules limit teams’ offers to free agents but allow teams to pay anything to their own players who are eligible for free agency. This is the defining feature of the NBA’s “soft cap,” which differs from the NFL’s more restrictive “hard cap.”
Last summer, however, NBA teams began getting around the restrictions by signing free agents with whatever money was available--but giving their new players “one-year outs,” making them free agents again in a year when the teams could offer them anything.
“This has become a standard operating procedure on behalf of teams signing free agents who are looking to change teams,” NBA attorney Howard Ganz said.
Dudley, a Net, turned down a $3-million-a-year offer from New Jersey to take a $1.5-million deal in Portland. When the NBA sued, Dudley said in court that he was choosing Portland for its lifestyle.
This summer, when Dudley triggered his “out” clause and became a free agent again, the Trail Blazers signed him to a $4-million-a-year deal. Even though this confirmed what the NBA had predicted would happen, the league was unable to demonstrate in court that its cap had been circumvented.
Similarly, Green, the former Laker, got a new contract in Phoenix for $5.2 million a year--a $2.2-million raise.
Kukoc, the European star who was paid $1.5 million by the Bulls in his first season, will make $4.1 million this season.
Only Grant’s deal was not immediately upheld. He turned down a $4-million offer in Chicago to accept $3.7 million in Orlando.
The salary-cap issue is expected to be resolved in collective bargaining, but that isn’t going well, either.
The players’ contract expired at the end of last season and there have been no new negotiations. Instead, the players association sued to have the present rules thrown out, was defeated in court and has appealed. The appeal is scheduled to be heard Sept. 22.