David Stern and the Minnesota Timberwolves: The Joe Smith Debacle

In part, this is a story about Joe Smith, and the illegal deal the Wolves made with him entering the 1999 season. But really it's about the growth of the NBA under David Stern, not only in terms of money, but in corporatism.  Or professionalism if we are being generous.  One of the big picture changes in the league, and maybe all sports leagues, is that the days of the small time operator are gone. No more seat-of-the-pants operations.  Everything is buttoned up, corporate now. The league and its teams have become too big to fail.  Part of that story is the salary cap and its development over the decades.

But first, I want to tell another salary cap story from a couple of years prior to the Smith debacle: the Juwan Howard story. This one is among my favorites, but I tell it here to remind everyone that there was a time when we didn't have quite the sophisticated understanding of the CBA and salary cap as we do now; in fact, nobody, not even the teams did.  There was a lot of fast and loose activity as everyone tried to push the boundaries and understand what was permitted and what wasn't.

So: Juwan Howard.  Late in the 1995-96 season, Juwan Howard, then playing for the Washington Bullets, had the best six weeks of his professional career.  This was great for Howard, as he was about to become a free agent, and teams were significantly less sophisticated then they are now.  And so he was going to get paid.  A lot.  This was before maximum contracts existed, and Howard was a prize on the market.  The Miami Heat made him an offer of over $100M, and, no fool he, Howard accepted.

Shortly following that signing, the Heat re-signed their superstar, Alonzo Mourning.  And the league called shenanigans.  Essentially, the Heat had used the "cap space" that existed due to Mourning's expired contract to sign Howard, then used their Bird rights to re-sign Mourning over the cap.  The NBA voided the Howard contract on the theory that it was an intentional circumvention of the cap, and it was this maneuver that led to the formalization of the idea of the "cap hold" for free agents.  (Howard still got paid a ton of money; he wound up re-signing with Washington).

Onto Joe Smith. Smith was the first overall pick in the 1995 draft, the draft in which the Wolves got Kevin Garnett with the fifth pick.  After a couple of good but not superstar seasons in Golden State, he was traded to Philadelphia for half a season, then became a free agent just in time for the lockout that killed the first half of the 1998-99 season. After the settlement, he signed with the Wolves for one season at a low dollar value (after he turned down a sizable extension offer from Golden State, which prompted his trade).

As it turns out, Smith had an agreement with the Wolves to sign three one year deals in a row with them in order to establish Bird rights, and then the team would sign him to a lucrative contract over the salary cap. This agreement was discovered after his 2nd year with the club (following the 1999-2000 season) when a lawsuit between his agent and his agent's former partner led to the discovery of incriminating documents about Smith and the Wolves.

Stern came down hard. It seems clear that he chose to make an example out of the Wolves and try to put an end to teams trying to circumvent the salary cap.  The Wolves were penalized by having their next five first round picks taken away, (though one was later returned), and then GM Kevin McHale and owner Glen Taylor were suspended for a year.  The club was also fined $3.5M.  Smith had his previous contracts with the Wolves voided, which meant that Bird rights were not forthcoming.  He wound up signing with the Pistons for a year before returning to the Wolves on a long term contract.

I remember at the time that there was a lot of angst among the fan base.  There was significant frustration with the front office for taking such a risk for a player the caliber of Joe Smith, and there was a lot of debate about who specifically was at fault.

More, though, there was anger at Stern for inflicting such a harsh punishment.  Five first round picks in a row.  Ouch. The argument was that had this been the Lakers or Celtics or Knicks the penalty would not have been as harsh, that Stern was taking the opportunity to take it out on a small market team that nobody cared about, much like the NCAA, impotent to really punish the big boys, takes it out on SWNE Small State U.

While there might be truth to that, I always thought: hey, the Wolves did something stupid that they knew was against the rules; if you aren't prepared to pay the price for your rule breaking, don't do it.  You get what you get if you get caught.  The Wolves wound up missing out on the 2001, 2002, and 2004 drafts because of their punishment.

In retrospect, the Joe Smith fiasco marked a turning point in Stern's tenure as commissioner.  After that, the work of corralling ownership and getting everyone on the same page was essentially over. The league had grown to the point that only the extraordinarily wealthy could afford to own a team.  When he took over in 1984, there were still some mom-and-pop operations. By 2000, that was no longer the case. At that point, his job became much more that of a CEO reporting to shareholders (owners).  Build the brand, increase revenue, negotiate CBAs on behalf of ownership, etc.

David Stern is retiring this month. In truth, I can't say that I enjoyed his public persona, which always struck me as exceedingly smug.  I don't love everything that has happened to the league during his reign; I could do without a dress code. The corporatism that has taken it over isn't really to my taste. On the other hand, perhaps that was inevitable.  The revenue growth over the last three decades has been phenomenal, and with that comes a need to protect it.  A new breed of owner, more businessmen, less showmen.  The league had to move that way if it was going to survive, and David Stern ushered in that new era with great success.

Perhaps the penalties he imposed on the Wolves around the illegal Joe Smith agreement was the signal to the league as a whole to finally finish cleaning up its act; get in line and start pulling in the same direction.  A reminder that acting in the best interest of the league as a whole meant a bigger pie for everyone.

David Stern retires as one of the most successful commissioners in sports history.  Good luck to Adam Silver.