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Smith Ruling Upheld By Arbitrator

November 9, 2000 / 12:54 PM EST / CBS/AP

An arbitrator upheld the NBA's penalties against Joe Smith, virtually assuring that the forward will leave the Minnesota Timberwolves.

Arbitrator Kenneth Dam ruled Thursday that NBA commissioner David Stern did not overstep his bounds when he voided Smith's contracts for the 1998-99 and 1999-00 seasons.

Smith, a free agent, now has no financial incentive to stay in Minnesota since the Timberwolves can only offer him a one-year contract for $611,000. Other teams, including the Miami Heat and Chicago Bulls, can offer Smith a much more lucrative contract.

The Timberwolves signed an illegal secret agreement with Smith, promising him a multiyear, multimillion-dollar contract extension that was to begin in the 2001-02 season after Smith had played three seasons in Minnesota.

Stern penalized the Timberwolves by taking away their next five first-round draft picks and fining the team $3.5 million.

The commissioner also voided Smith's contract for the current season along with his one-year contracts for the previous two seasons, thereby taking away Smith's so-called Larry Bird rights.

Players with Bird rights can re-sign with their team even if the team is over the salary cap. Smith will now have to play three more seasons to re-earn those rights.

"I think the arbitrator recognized the importance of enforcing the provisions relating to secret agreements," NBA deputy commissioner Russ Granik said. "It demonstrates that if you enter into secret agreements, the consequences of getting caught can be fairly significant."

Timberwolves coach Flip Saunders declined immediate comment on Dam's ruling.

Stern may not be finished penalizing the Timberwolves.

A hearing must still be held to determine which team officials had knowledge of the secret agreement. Owner Glen Taylor, vice president of basketball operations Kevin McHale and other team officials could face one-year suspensions.

Smith's agent, Dan Fegan, has had almost two weeks to negotiate with any of the 29 NBA teams who would be interested in signing Smith, who was the overall No. 1 pick in the 1995 draft.

The Bulls, with about $6 million in salary cap room, could make Smith the largest offer. The Heat have a $3.92 million salary cap exception that was granted by the NBA after they lost Alonzo Mourning for the season because of a kidney ailment.

The Dallas Mavericks, New York Knicks and Atlanta Hawks also have expressed interest in Smith, but the best offer those teams could make is a one-year contract for $2.25 million.

Fegan and Taylor did not immediately return calls seeking comment.

The Timberwolves had been hoping that Smith would win his appeal and re-sign with them, while the commissioner adamantly felt that the team should lose Smith since they had broken the rules to acquire him.

In their appeal, Smith and the players' union argued that Stern did not have the authority under the collective bargaining agreement to void past contracts. The league had argued that Stern has the authority to void any contract past or present.

"We were expecting a contrary ruling, but unfortunately we didn't get it," union director Billy Hunter said. "We're in consultation with Joe and his agent and we're studying the ruling to see what our next action, if any, will be."