In a federal courtroom in Manhattan, Thomas listened to a jury foreman announce the panel had decided that Thomas and Madison Square Garden sexually harassed a former top executive, then fired her out of spite. It also found MSG and chairman James Dolan owed plaintiff Anucha Browne Sanders $11.6 million in damages.
The Garden owes $6 million for condoning a hostile work environment and $2.6 million for retaliation. Dolan must pay an additional $3 million.
What happened in Manhattan could affect Thomas' future as the Knicks' coach.
"He says he's innocent. The jury has found otherwise. Now they are knowingly retaining an employee who's a ticking time bomb. If another woman comes forward (with a sexual harassment charge), there will be even bigger punitive damages," Court TV's Lisa Bloom said on CBS News' The Early Show.
The jury of four women and three men needed roughly two days to decide on the allegations, but only about an hour to pile on the damages at the close of a three-week trial rife with accounts of crude language and sexual escapades behind the scenes of a storied franchise. Jurors declined to talk about their deliberations as they left the courthouse amid a media frenzy.
The verdict spared Thomas himself from paying any damages, but it still amounted to another blemish on the resume of a two-time NBA champion whose post-playing career has been marked by one failure after another. His trademark smile disappeared as he grimly reasserted his innocence amid a crush of reporters and cameras.
"I'm extremely disappointed that the jury did not see the facts in this case," he said. "I will appeal this, and I remain confident in the man that I am and what I stand for and the family that I have."
In court, Thomas cited his four years at NBC working with Early Show co-anchor Hannah Storm as an example of a positive working relationship with a woman.
"I was the host of the show, and he was my basketball analyst. We spent literally hundreds of hours together in a room watching tapes and a lot of time on the air. And he had said in court that when he left Toronto, he then came to NBC and worked with me and there were no problems. And that was accurate," Storm told co-anchor Harry Smith.
As news of the verdict reached the Knicks training camp in Charleston, S.C., guard Stephon Marbury - who testified at the trial - and other players said it was time for the team to move past the off-court controversy.
"It's a tough situation, and the only thing we can do now is go forward," Marbury said.
Forward Malik Rose predicted the team would rally behind Dolan and Thomas, who was expected to arrive on Wednesday.
"We all know what kind of guy Mr. D is," he said. "We all know what kind of guy Isiah is and how they treat us. I'm sure all you guys agree this is a first-class organization."
In a statement, MSG denied any wrongdoing in a case widely viewed as a public relations disaster for a team struggling to regain credibility. The Knicks haven't won a playoff game since Thomas joined the team in 2003, and the franchise has wasted millions of dollars this decade on a series of free-agent busts.
The harassment verdict was partly anticlimactic, because the jury had sent a note to the judge a day earlier indicating that it believed Thomas, the Garden and Dolan sexually harassed Browne Sanders, a former vice president for marketing. A 44-year-old former Northwestern University basketball star, she is a married mother of three.
The jurors had heard Browne Sanders testify that Thomas, after arriving as team president in 2004, routinely addressed her as "bitch" and "ho" in outbursts over marketing commitments. He later did an abrupt about-face, declaring his love and suggesting an "off-site" liaison, she said.
Thomas, while admitting to using foul language around Browne Sanders, insisted he never directed it toward her.
Degrading a woman in the workplace "is never OK," said Thomas, himself a married father of two. "It is never appropriate."
Dolan and a string of other executives also took the witness stand to deny that they tolerated or witnessed sexual harassment. They testified that Browne Sanders was fired from her $260,000-a-year job because she was incompetent on budget matters, and because she sought to undermine an internal inquiry into her allegations against Thomas.
"She proved to the satisfaction of the jury that she was retaliated against, that they went after her. That's why she got the big punitive damages," said Early Show contributor Bloom, whose law practice specialized in sexual harassment cases. "They drove her out. She had to relocate with her family to Buffalo. That's what angered the jury."
The trial also made headlines with its testimony about an admitted tryst involving Marbury and an MSG intern. The plaintiffs' attorneys argued that the encounter demonstrated the organization's frat-house mentality.
"In business, where women, regardless of their professionalism and marital status and morals, are objectified and not treated with respect, that is what saddens me, and it saddens me to see a friend involved in the culture of that nature, which is what was happening at Madison Square Garden," said Storm.
Browne Sanders sought $10 million in punitive damages, but the jury was free to deviate from that figure. A judge will determine and award compensatory damages in the coming weeks.
Outside court, a beaming Browne Sanders claimed her victory was more about sending a message than about money.
"What I did here, I did for every working woman in America," she said. "And that includes everyone who gets up and goes to work in the morning, everyone working in a corporate environment."