Friday, July 07, 2006

Belkinkampf! Scheiss!

The latest disaster from the Belkin v. Rest of the World imbroglio:

the Hawks and Thrashers cannot sign any players to contracts longer than one year. While this isn't quite as disastrous at it might appear, since the inept Judge Eric Johnson carved out an exception for negotations already commenced (and thus the signing of Speedy Claxton can proceed, as well as the signing of the Hawks' draft picks), it does severely complicate the Al Harrington sign-and-trade, since the Hawks will only be able to trade him for players with one year remaining on their contracts or for players for whom trade discussions have already commenced. It also makes the Thrashers' efforts to bolster their defense and sign a center to replace Marc Savard extremely difficult.

The decision by Judge Johnson is favorable in the sense that it allows Atlanta Spirit LLC to continue operating the teams pending their appeal of the decision giving Belkin the right to buy the teams out. It's also favorable because Judge Johnson didn't require the posting of a massive bond, which would have severely hamstrung the efforts of the owners to operate the teams. However, the fact that the Judge would initially suggest that the teams not be able to sign any free agents demonstrates that he has no idea how professional sports teams operate (and more generally, that litigation is often completely at odds with the business objectives of both parties in a given case). The fact that both parties had to step in and stop him from doing so demonstrates that they both understand that such a decision would damage the teams' ability to compete and therefore reduce the value of the assets over which the parties are fighting. The fact that the parties then couldn't reach an agreement as to parameters for trades and free agent signings, thus leaving Judge Johnson to employ the absurd one year or less restriction, shows that their acrimony is getting in the way of what should be a common goal. The one positive spin I can put on Judge Johnson's decision limiting signings is that he knows that it will put significant pressure on the two parties to settle, as he has put them on the road to mutually assured destruction. However, his original decision in favor of Belkin has given Belkin no incentive to settle, because he knows that if he prevails at the appellate stage, then he gets both teams and Philips Arena for a relatively reasonable sum.

Schmuck...with good lawyers.


Eric said...

I'm confused as to why this is STILL going on!

It seems to me that when 80% of the other guys controlling the team want you gone, you should accept their money, and find another team to leech onto...

Ian said...

I'm sure you'll see the Simmons article about the trade value top which he mentions how amazing it is that Joe Johnson did what he did with WNBA point guards and still ranks Boris Diaw above him. What a maroon.

LD said...

I'm not so sure about the Harrington trade and I haven't been able to get info anywhere.

Here's the thing. The ruling prevents the Hawks from signing anyone to deals longer than a year. I don't think the application as to Harrington would be that they could only trade him for players with a year or less on their contracts. I think it means that they can't sign Harrington at all (since presumably, any team wanting to take on Harrington would want to have him for longer than a year). Since it's a "sign and trade", the way it has to work is that the Hawks sign Harrington to an extension (under the terms agreed to with his new team) first (in order to allow him to get paid via the Larry Bird Rule above the slotted cap provisions), then trade him. If the ruling prevents the Hawks from signing anyone for longer than a year, why would they be able to even do a sign and trade at all? Seems to me like the ruling forces the Hawks to let Harrington walk without compensation (though Gearon suggested on 790 this morning that they might be able to get consent from Belkin on a sign-and-trade,). Of course, that severely inhibits Harrington from obtaining a contract for his optimal value, so I could then see a grievance filed on Harrington's behalf against the league over this screw up (and I could see any number of other prospective free agents who had any contact or hopes of getting an offer from the Hawks in the same position).

Kinkade on 680 yesterday was livid about the ruling from the Thrashers' POV as well. He didn't think FA signings was all that big a deal, since he suggested the Thrashers were pretty close to the cap already, but he did say that getting Kari Lehtonen signed to an extension was priority #1 and that is impossible under yesterday's ruling.

This was not a good ruling, and the situation for fans is very very bad.

Michael said...

Eric, this dispute is still going on because there was a dispute between Belkin and the rest of the owners as to how much the remaining owners would have to pay to buy out Belkin's interest. Because of poorly-drafted contractual language, the owners failed to buy Belkin out in a certain time period and Belkin has obtained a ruling in Maryland that he is therefore entitled to buy the rest of the owners out for their original investments. The current dispute is over what the team can do while the case is being appealed.

Ian, I haven't seen Simmons' article yet, but I'm sure there are some idiotic statements about the Hawks in there. He has a real boner for Atlanta teams.

LD, I can't imagine that the Court would hold the Hawks in contempt for violating the order if they signed Harrington solely for the purpose of trading him. That would be a technical violation of the order, at best, and wouldn't meet the intent standards needed for a showing of contempt. Belkin certainly isn't going to move to have them held in contempt if the alternative is letting Harrington go for nothing in return. Additionally, if the Hawks have already entered into negotiations to sign and trade Harrington, then that signing is OK under the order. The problem is that the universe of players the Hawks can get back in return is now limited to players with one year or less remaining on their deals and players for whom negotiations have already commenced. The Hawks' negotiating position has been drastically undercut.

Kincade makes an excellent point on the Thrashers. There is a huge incentive now for the parties to settle in advance of the appeal since it's in no one's interest for the assets to lose their value as a result of this idiotic order, but Belkin is very dogged and litigious and he seems unlikely to do so with victory in sight.

LD said...

Also, Eric, I believe that the raw numbers of individuals (80% vs. Belkin) doesn't match up with the relative investments of particular individuals. My understanding was that Belkin put in more than the others.

Seriously, if I were a free agent, I'd call Billy Knight and ask him what kind of an offer he could get from the Hawks if they weren't bound by the ruling. If I were Billy Knight, I'd tell him a very high number over multiple years. Then, if I were the player, I'd file a grievance saying the NBA's failure to address the ownership situation in Atlanta has prevented him from obtaining the best offer available on the market. It might get the NBA to do something about it. Stern's pulled Belkin's chain before (in re Charlotte when he was the high bidder and lost), he can do it again.

Fox said...

Not to be the Simmons defender, although that may be my role on this board, but his player value rankings take contract into account. And knowing what we know now, i would much rather pay Diaw $4.6 mil a year than owe Joe Johnson max money for the next five years. I understand why the Hawks had to give him that kind of money but he's not worth it and he's a cap killer because of it. Of course, it could be worse--look at the Cavs and Larry Hughes who is one year into a near max contract and they already want to dump him.

I think that what this judge's ruling does is put Belkin into de facto control of all long-term moves. So the Harrington sign-and-trade will happen but Billy Knight will be under Belkin's control on which offer to take.

Michael, any idea why Belkin was able to bring this case in Maryland state court?

LD said...

One of the owners of the Hawks group lives in Maryland I believe (The DC group guy who is the NHL governor).

Michael said...

I think the Agreement has a Maryland choice of law provision. If not, then LD is right that a couple of the Hawks owners are based in DC and probably live in Maryland.

Fox, I disagree that Johnson's contract is a cap-killer. The Hawks are still way under the cap, so signing him hasn't hurt the team's ability to grow. Also, cap space was pretty irrelevant to the Hawks until they found someone who actually wanted to come here. Finally, I think the Hawks front-loaded the contract to make it unpalatable for the Suns, so Johnson won't be overly pricy when the team becomes an attractive destination in a few years (assuming that the ownership situation doesn't kill them altogether).

peacedog said...

I don't think we can easily suggest that Diaw was a better fit based on his performance for the Suns last year. I don't think he duplicates that with the Hawks.

Johnson, OTOH, is better than I thought he'd be. It's still unpossible to judge the deal given that some of the particulars have yet to factor in. But I'm pleased with what we got out of it thus far.

Fox said...

What I meant by cap-killer is that Johnson's contract is hard to move (not Steve Francis or Starbury hard, but still pretty hard). Of course cap space isn't a problem for the Hawks because they have a bunch of guys on their rookie contracts and tons of cap space. It's often the way of these max signings--you get a guy that you can afford but if things turn bad in a few years, you can't get rid of him because nobody else wants to pay that kind of money. (Just picture the Bulls in two years trying to unload Ben Wallace or even the Cavs with Hughes and Z now. The extreme examples are Zach Randolph in Portland and K-Mart but that's mostly because they suck.)

As to Diaw, there's no question that he fluorished in Phoenix and never would have in Atlanta for a host of reasons. But nobody will ever convince me that the Suns didn't make out like bandits for a guy who didn't want to re-sign with them anyway. I mean they got two # 1s and a guy who completely filled Johnson's role last year (and was better/bigger defensively) for basically one year of Johnson (remember, he was a restricted free agent so could have walked this summer for nothing. But I also understand that bad teams have to overpay for good players so the move wasn't as bad as, say, passing on Chris Paul.