Arbitrator Hears Smith Case
An arbitrator will decide in the next few days whether NBA commissioner David Stern had the authority to void Joe Smith's previous two contracts with the Minnesota Timberwolves.
Arbitrator Kenneth Dam presided over an 8 1/2-hour hearing Thursday at a Manhattan law office and said he would issue his ruling in a timely manner.
"We're waiting for a decision. It won't be tonight," NBA spokeswoman Teri Washington said.
Smith's contract with Minnesota for the current season has already been voided, and he is a free agent. But still at issue is whether his contracts for the 1998-99 and 1999-00 seasons will be reinstated, thereby giving him a financial incentive to stay in Minnesota because the team would be able to exceed the salary cap to re-sign him next summer.
If his appeal fails, it's likely Smith would seek to play for the Miami Heat, Chicago Bulls, New York Knicks or Dallas Mavericks.
The Bulls, with about $6 million in salary cap room, would be able to outbid the other three teams, but the Heat could get a $3.9 million injury exception from the league after losing Alonzo Mourning for the season. The most the Knicks and Mavericks would offer Smith is a one-year contract for $2.25 million.
If Smith wins his appeal, he would regain his Larry Bird rights and be able to sign a lucrative long-term contract with Minnesota next summer.
"We feel pretty good about it," players union attorney Ron Klempner said, adding that Dam's first piece of business at the hearing was ruling on whether Smith had the right to appeal it before the systems arbitrator. Dam ruled in Smith's favor, Klempner said.
NBA deputy commissioner Russ Granik was the only witness to testify Thursday. His testimony took about two hours.
Dam ruled last week that Stern had the right to void Smith's current contract as punishment for signing a secret salary agreement with the Timberwolves that was to begin with the 2001-02 season and run through the 2007-08 season. Such agreements are a violation of the salary cap.
Dam's initial decision only concerned the voiding of Smith's current contract and any future contracts. It made no reference to whether Stern could void Smith's previous contracts.
Dam did say that "the commissioner does have the authoriy to void contracts not yet entered into at the time of the violation." The NBA argued that since the illegal contract was entered into in January, 1999, any contracts signed after that date - namely Smith's one-year contracts for the past two seasons - would be voidable.
Part of Smith's argument is that the collective bargaining agreement does not specifically give Stern the power to void past contracts.
Stern also penalized the Timberwolves by taking away their next five first-round draft choices and fining them $3.5 million.
Team officials, including owner Glen Taylor and vice president Kevin McHale, could be suspended for up to a year for signing the secret agreement with Smith. A hearing must still be held to determine who had knowledge of the secret agreement.
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