Timberwolves Heavily Penalized for Secret Deal

Joe Smith contract was ruse; salary cap rules violated; team loses player, five first-round picks and is fined

New York, October 25, 2000 - NBA commissioner David Stern handed down one of the most severe penalties in league history today against the Minnesota Timberwolves. He not only voided Smith's current contract, making him a free agent, but he also voided Smith's last two contracts, thereby stripping him of his "Bird Rights." Stern was not done there! He also fined the team $3.5 million and took away their next five first-round draft picks. Even further, Stern could still suspend owner Glen Taylor and/or vice president of basketball operations Kevin McHale.

According to the Minneapolis Star and Tribune, the ruling comes less than a week after arbitrator Kenneth Dam ruled that Smith and the Timberwolves entered into secret contracts to avoid the salary cap rules. Under their illegal agreement, which was negotiated by Smith's former agent Eric Fleisher, Smith agreed to sign three one-year contracts ($1.75 million, $2.1 million and $3.6 million) with the Timberwolves for much less than his market value. In return, Smith received a promise from Taylor that the team would give him a huge pay day beginning in the 2001-02 season for between $40 million and $86 million over seven years. The total would have been dependent on performance clauses. Such an arrangement violates the NBA collective bargaining agreement which requires a team to earn the three-year "Bird Rights" on a player - the ability to pay him without regard for salary cap figures - one season at a time. (Arbitrator Dam also found that Stern had the right to void Smith's current contract.

The Arbitration proceeding was really the crux of this entire situation. Dan Fegan, Smith's current agent, was cited before the arbitration as saying, "Joe would be free to negotiate now with any of the 29 teams, but we wouldn't have been in this whole fight if Joe didn't want to play for Minnesota. This fight is about staying." Attorneys for the Timberwolves, Smith and union had argued that Stern's options were limited to penalties specified in the collective bargaining agreement, including fines, suspensions of team personnel, the forfeiture of draft picks and the voiding of current player contracts Obviously apparent now, Arbitrator Dam sided with the Timberwolves and Smith.

Although Stern's ruling comes down hard on the franchise, Arbitrator Dam's ruling gives Smith and his representatives reason to smile. Ron Klempner, an attorney for the NBA Players' Association told the Associated Press that, "it's a complete victory for Joe Smith." The arbitrator's decision gives Smith the ability to re-sign with the Timberwolves or sign as a free agent with another team immediately.

There is much speculation about what Joe Smith is going to do now. If he stays with the Timberwolves, he would have to sign for one season at the league minimum for a player with five years experience ($611,000). On the other hand, if Smith is interested in getting paid a significant amount more money, he will have to sign with another team. If he does leave, which he likely will, look for Chicago and Miami to make very attractive offers.

Smith was selected first overall in the 1995 draft by the Golden State Warriors and signed with the Timberwolves in January, 1999. He averaged 9.9 points and 6.2 rebounds in 78 games last season.

Nate Allen