Current discord in Hawks ownership has deep roots

When the Atlanta Spirit — a group, made up of businessmen from Atlanta, Washington and, for a time, Boston — celebrated its 10th anniversary of owning the Atlanta Hawks earlier this year, there likely wasn’t a party.

The Spirit’s ownership, after all, has been marked by in-fighting, lawsuits and controversy. And it has long seemed inevitable that the organization could self-destruct.

All of that came to a head last week, with the worst issue to rock the franchise. The latest imbroglio, beset with racial overtones, put the national spotlight on both the NBA and the diverse city of Atlanta.

It paints a clearer picture of the deep turmoil within the ownership group. And it has raised questions — in metro Atlanta and across the country — of just how far we’ve come in terms of dealing with racial issues.

Controlling owner Bruce Levenson agreed to sell his stake in the team following the publication of an inflammatory email he sent in 2012 regarding the lack of white fans coming to Philips Arena.

Co-owner Michael Gearon Jr. called for general manager Danny Ferry to be fired over racial comments he made about a player during a June conference call that sparked investigations, first by the team and then by the NBA. (Ferry requested an indefinite leave of absence Friday afternoon.)

And one owner recently described his relationship with another as “hostile.”

The current back-and-forth represents yet another low point for the Atlanta Spirit. And Levenson’s letter, in particular, has prompted widespread reaction.

“His comments undermine the best of Atlanta and what we have represented for race relations for the nation and for the world,” local civil rights advocate Markel Hutchins said.

It was the latest setback for an organization beset by controversy, including:

  • a six-year legal battle with a former partner that began 16 months after the sale agreement was signed and didn't end until 2010;
  • the sale and relocation of the Thrashers to Winnipeg, Manitoba, in 2011, leaving Atlanta without an NHL franchise for the second time;
  • and the failed sale agreement for the Hawks' sale with an L.A. businessman in 2011.

From the start, there was concern over the ownership group. One former employee called his tenure with the organization “bizarre.”

There were issues over who would get tickets to the NBA All-Star game or sit in on the Board of Governors meetings. There were complaints about which owners were getting mentioned in newspaper articles.

It didn’t take long for the lawsuits to begin.

Troubles lead to litigation

The initial legal problems began July 30, 2005.

That’s when part-owner Steve Belkin sent an email to the other co-owners. He told them that he had instructed Billy Knight, the Hawks general manager at the time, not to include the team’s 2006 first-round draft pick in a proposed trade for guard Joe Johnson.

That set off a testy volley of emails among the owners, many of whom were angry that Belkin would try to dictate the terms of the trade.

The episode culminated in a conference call during which Knight asked that his “intention not to speak to Steve under any circumstances going forward” be duly noted.

The encapsulation of the early discord was minted in a photograph taken during the legal proceedings when Knight refused to shake the hand of Belkin before a hearing.

The legal issues, which finally included a buyout for Belkin, would not be resolved until Dec. 23, 2010.

Less than two months later, the group would fail again.

Attendance woes

In a February 2011 interview with The Atlanta Journal-Constitution, Gearon said there was a “sense of urgency” to find buyers for the Atlanta Thrashers. The hockey team, he revealed, was in jeopardy of being sold — and could move from Atlanta.

Three months later, with no local buyer stepping forward, the Thrashers were sold and moved to Winnipeg.

The organization later attempted to distance itself from the hockey failure, going so far as to paint over a mural in CNN Center dedicated to Atlanta’s hosting the 2008 NHL All-Star game.

The prolonged Belkin lawsuit and the Thrashers failure were two setbacks for the group and, in part, they have contributed to an eroding fan base for the Hawks, now the lone tenant at Philips Arena.

Despite making the playoffs in seven consecutive seasons, the Hawks have struggled with attendance. Last season they ranked 28th among the 30 NBA teams with an average reported tickets-distributed figure of 14,339. During their current run, they have failed to advance past the second round of the playoffs. They qualified for the playoffs last season with a sub-.500 record.

The Hawks’ failure to attract big-name free-agent stars, such as LeBron James, Dwight Howard, Chris Paul or Carmelo Anthony, all of whom spurned the Hawks the past two years, is viewed as a negative to many.

Landing high-profile stars may prove more difficult moving forward, in light of the recent troubles.

Those troubles started with a conference call.

‘That’s going to be on TMZ’

In April, the Hawks hired TV executive Steve Koonin as their CEO. He was given an undisclosed ownership stake in the franchise and was to be the new face of franchise in an effort to rebrand the organization.

Two months later, Koonin was on a conference call — it was to be normal business procedure to discuss potential free agents. Part-owner Gearon; his father Mike Gearon Sr., also a part-owner; controlling owner Levenson; and general manager Ferry were among those on the June 6 call.

According to the audio recording of the call — obtained by The Atlanta Journal-Constitution — Ferry made this comment while discussing free agent Luol Deng:

“The rap on him is little bit, um, body is not as torn up as you think, um, although he’s played a lot of minutes. If managed the right way he’ll be fine. He’s still a young guy overall, um, but here is also, he is a good guy overall but he’s not perfect. He’s got some African in him. And I don’t say that in a bad way other than he is a guy who will do something behind you.”

Gearon Jr. is heard making a reference to former Clippers owner Donald Sterling, who was banned by the NBA and forced to sell the team after his recorded racist comments were made public.

Gearon exclaims: “That’s going to be on TMZ tomorrow.”

Ferry continued: “He has a storefront out front that is beautiful and great, but he may be selling some counterfeit stuff behind you. And when I say that, what I mean for example, is he can come out and be an unnamed source for a story, um, and maybe two days later come out and say ‘That was absolutely not me. I cannot believe someone said that.’ But talking to reporters you know it’s him.”

That conference call was only the beginning.

An inflammatory email

Six days later, after taking a recording of the comments to several prominent African-American lawyers, Gearon sent an email to Levenson.

In the letter, dated June 12, he seeks that Ferry be asked to resign or fired for cause because of the comments.

Levenson determined that there would be an independent investigation, conducted by the law firm Alston and Bird, that would uncover an inflammatory 2012 email he wrote to Ferry.

In that email, Levenson, in part, discusses ethnic makeup of the Hawks crowd and shares his theory on the team’s poor attendance.

“My theory is the black crowd scared away the whites and there are simply not enough affluent black fans to build a significant season ticket base.”

In the email, Levenson also wrote:

“When I hear some people saying the arena is in the wrong place I think it is code for there are too many blacks at the games.”

“I have been open with our executive team about these concerns. I have told them I want some white cheerleaders and while i don’t care what the color of the artist is, i want the music to be music familiar to a 40 year old white guy if that’s our season tixs demo. i have also balked when every fan picked out of crowd to shoot shots in some timeout contest is black. I have even (complained) that the kiss cam is too black.”

“And many of our black fans don’t have the spendable income which explains why our (food and beverage) and merchandise sales are so low. At all white thrasher games sales were nearly triple what they are at hawks games.”

Levenson reported the email to the NBA, and last Sunday announced that he would sell his stake in the team.

“If you’re angry about what I wrote, you should be,” Levenson said in a statement released by the team. “I’m angry at myself, too. It was inflammatory nonsense. We all may have subtle biases and preconceptions when it comes to race, but my role as a leader is to challenge them, not to validate or accommodate those who might hold them.”

In the days that followed, some blasted Levenson’s remarks as offensive, inappropriate and divisive. Others questioned whether it was an expression of bigotry or a market analysis.

Many of Atlanta’s black leaders quickly condemned Levenson’s email. Mayor Kasim Reed, for instance, called the comments “reprehensible and offensive.”

Basketball great Kareem Abdul- Jabbar said that although the comments “make me cringe a little,” the issues Levenson raised about attracting more white fans are reasonable.

“Levenson is a businessman asking reasonable questions about how to put customers in seats,” he said.

If anything, Abdul-Jabbar criticized the owner for relinquishing ownership so soon.

But the troubles are far from over.

Discord lingers

In a June 18 email, Levenson wrote to Gearon: “Your emails have triggered an independent investigation that will get to the bottom of your allegation but they also trigger for me serious questions about our partnership.”

Following the Alston and Bird investigation, Koonin issued an undisclosed discipline for Ferry.

But, he said that Ferry would keep his job based on the investigation’s findings that he was only reading from a background report on Deng during the conference call.

Ferry, who apologized in a statement, drew the support of NBA Commissioner Adam Silver, even though several prominent people, including Hall of Famer Magic Johnson and Spike Lee, have called for Ferry to be fired.

Levenson, Ferry and Gearon have all declined comment.

Koonin has not responded to several interview requests.

The in-fighting hasn’t stopped.

Gearon still wants Ferry to be removed. Koonin said he will stay. It’s possible Atlanta Spirit could find itself in another courtroom — yet again.

It’s also possible that the episode will finally end with new ownership.

“Any time you have a group of multiple owners, you are always going to have issues,” said William Sutton, professor and director of the Sport and Entertainment Management program at University of South Florida. “There is just no way that you are ever going to have consensus.

“What it appears here, is you have a couple of guys who battle behind the scenes and are not particularly fond of each other,” Sutton said. “They bring the laundry out in public and try to discredit each other.”