Juwan Howard: A Stroll Down Memory Lane

Do you remember the last time the Miami Heat had substantial cap space?

It was the summer of 1996.

Owner Micky Arison had hired basketball’s most celebrated coach the year prior with one goal in mind: to build a championship-caliber roster. This was Pat Riley’s chance.

He had been preparing for it since the day he arrived, having traded away Glen Rice, Khalid Reeves, Matt Geiger, Kevin Willis, Bimbo Coles, Billy Owens and Kevin Gamble in a series of moves throughout the prior season during which he acquired his future superstar, Alonzo Mourning, and set himself up with maximum cap space to build around him in what was considered at the time to be the NBA’s biggest free-agent market ever.

The Heat began the offseason with just $4.6 million in salary commitments to four players — Sasha Danilovic ($1.9 million) , Kurt Thomas ($1.2 million), Keith Askins ($650K) and first-round pick Martin Müürsepp ($489K, at his rookie-scale amount) — leaving an NBA-high $20.1 million of available room below the $24.4 million salary cap.

Mourning, now an impending free agent, was the cornerstone of the team’s vision. But Riley knew that, to turn a 42-40 team into a title contender, he needed more than to just re-sign him.

One minute after the new labor agreement was finalized at 4:59 p.m. on Thursday July 11, the NBA’s free agent marketplace officially opened.

Riley kicked off the summer by turning his sights to three players: Seattle Supersonics perennial All-Star free agent point guard and reigning Defensive Player of the Year Gary Payton, Washington Bullets budding first-time All-Star forward and hottest commodity in the free-agent market Juwan Howard, and his own perennial All-Star center Alonzo Mourning.

Pairing the three would certainly boost Miami into the league’s upper echelon. But, with just $20.1 million to allocate and no maximum salaries back then, the money was going to be tight. Riley knew he could leverage Mourning’s $6.8 million cap hold and full Bird rights to exceed the salary cap in giving him any first-year salary he demanded. But that would leave just $13.3 million in first-year salary for Payton and Howard to split, which could grow by up to 20% each season thereafter and span a total of up to seven years. The chance to get both was remote.

If there was to be only one, Howard was the clear priority. Boosted by gaudy per game averages of 22.1 points, 8.1 rebounds and 4.4 assists, the 23-year-old had opted-out of his existing contract with the Bullets in favor of the big payday, in what was soon to become one of the most heated and controversial battles in league history.

The initial bidding for Howard would take place at the headquarters of his agent David Falk — whose client list at his FAME (Falk Associates Management Enterprises) conglomerate also included Mourning, Michael Jordan and Patrick Ewing — at Chevy Chase Pavilion in Washington, D.C., in successive private sessions that would begin after Falk successfully negotiated a one-year, $30 million contract for Jordan to remain playing for the Chicago Bulls, at around 7:00 pm on July 11.

The Bullets opened up the bidding with an initial seven-year, $78.4 million offer. Despite his strong desire to stay with his incumbent team, Howard was not impressed. He felt his market value was far greater than that.

The Heat, in a late-night session that same night, initially countered at seven years and $84 million, but increased it to $91.0 million, plus another $3.5 million in bonuses, by the time the meeting was over in the early morning hours of Friday, July 12.

The Bullets then pushed their offer to an $84.0 million take-it-or-leave-it ultimatum that left Howard in tears about the prospect of leaving Washington.

The Heat upped the ante to seven years and $95.2 million, plus an additional $5.6 million in bonuses and perks that included luxury hotel suites and limousine service during road trips, bringing the total to $100.8 million. It was all but inevitable.

At around 1 a.m. on Saturday July 13, Riley’s phone rang. Howard was on the other end. “Coach,” he told Riley. “I’m coming to Miami.”

Bullets general manager Wes Unseld would go on to claim that he called Falk in the afternoon of July 13, after the Heat had reached its deal with Howard, to increase his offer to seven years and $94.5 million, but that Falk quickly rejected it. Falk denied having received such an increased bid, accusing the Bullets of using “spin control… to make it look like they were really close” in the wake of widespread outrage from Bullets fans.

Nevertheless, for Riley and Miami, Howard was secured.

The Heat was making progress with Payton as well. Once a five-team field (including the New York Knicks, Milwaukee Bucks and Charlotte Hornets), the competition for Payton’s services had been whittled down to just the Sonics and Heat by Friday night. But on Saturday, just hours after Falk announced the Heat’s agreement with Howard, Payton rejected Miami’s offer and the Heat were eliminated from consideration.

Howard’s deal would start at $9.0 million, leaving just $4.3 million for Payton, which could pay out as much as $47.6 million (excluding potential bonus money) over seven years (a total which could only have increased by renouncing Müürsepp or trading Danilovic, Thomas or Askins). He would ultimately re-sign with the Sonics for $85.0 million. His agent, Aaron Goodwin, would go on to say, “We were happy the Heat signed Howard. That (would have) made them a better team for Gary to play with. Gary likes Pat Riley and what the Heat are trying to build. But he also likes what the Sonics have done and considers the Seattle fans irreplaceable.”

When the moratorium ended on July 17, the Heat officially signed Howard to his seven-year, $100.8 million contract, making him the NBA’s first ever nine-figure player. Howard was slated to earn more than the likes of Hakeem Olajuwon and David Robinson.

With Payton no longer an option, Riley quickly worked to re-allocate his money.

On July 18, the Heat signed New Jersey Nets forward P.J. Brown to an incentive-laden seven-year, $19.0 million deal, but worth as much as $35.8 million based upon the achievement of certain individual and team milestones. Brown’s deal would start with a $1.7 million base salary.

On July 23, the Heat re-signed incumbent point guard Tim Hardaway to a four-year, $10.4 million deal, but worth as much as $20.8 million including potential bonus money. Hardaway’s deal would start with a $2.0 million base salary.

The final move in the master plan was to sign Mourning to a seven-year, $105.1 million contract, utilizing his Bird rights to legally exceed the salary cap by $2.0 million. This opportunity was made possible because Mourning’s $6.8 million cap hold was $2.5 million less than his $9.4 million first-year salary to be.

The vision was complete. The maneuvering was done. The Heat were set to become a perennial powerhouse.

But then, on July 31, with Howard parading around Miami as a member of the Heat, the league shocked the NBA world by voiding his contract — a full two weeks after it was executed.

Two reasons were given by the league for its decision.

According to NBA chief legal officer Jeff Mishkin: “First, the Heat incorrectly calculated their available cap room because they excluded performance bonuses provided for in contracts submitted for Tim Hardaway and P.J. Brown that should have been included. Second, Miami had already reached a deal with Alonzo Mourning prior to the signing of Howard, thereby further reducing the amount of cap room available for the Howard contract.”

A proper analysis of those assertions requires an understanding of how the offseason began.

The offseason had initially started with Riley asking Mourning to sign a one-year contract at less than market value to help the Heat create more room under the salary cap. Mourning dismissed the proposal. Riley then tabled his discussions with Mourning while he focused his attention exclusively on Howard, assuring Mourning that after “taking care of some business” with other players, “I will make you the highest-paid player on the team.”

Mourning, in an interview with ESPN on July 16 (three days after Howard’s $100.8 million deal was being widely disseminated publicly), would go on to leave the impression that he might already have had an agreement in place with the Heat. Asked if his new deal was for “$100 million plus,” Mourning replied “Yeah, it is.”

With that, the seeds of controversy were planted.

Under the terms of the CBA, club officials were forbidden from making undisclosed agreements, promises, “representations, commitments, inducements . . . or understandings of any kind” with players. The CBA also required teams to report immediately all player contracts – oral or written – to the league, and required such contracts to be charged against the team’s cap figure. The league deemed that such an undisclosed agreement existed between Riley and Mourning, shaving $2.5 million from the Heat’s total cap space (the difference between the $9.4 million starting salary in the as-yet unsigned contract and his $6.8 million cap hold).

The issue with Mourning was nothing more than one of timing. The league added $2.5 million to the Heat’s cap sheet because it felt the Mourning contract came before the Howard contract, despite the fact that it wasn’t yet executed. Had the league determined that Mourning’s contract came after Howard’s contract, as it technically did, there would have been no issue whatsoever and the Heat would have recovered the $2.5 million in full.

Riley contended, bitterly, that his pledge to Mourning was proper because it was neither finalized nor contained any specific dollar figures – an interpretation of the CBA supported by the players’ union. Riley asserted that he came to agreement with Howard on July 13, and that Falk had informed him as late as July 15 that he was going to shop Mourning to other teams if negotiations with Mourning did not speed up. How, then, could the league possibly allege that the Mourning deal came first?

Whether or not Mourning had an “agreement” in place with the Heat organization prior to the Howard contract, such “agreements” were (and continue to be) exceedingly commonplace in the NBA — in every summer, for every team — and never in practice are they ever deemed to count against the salary cap. It was therefore a unique, and shocking, determination for Riley to swallow.

Said Riley after Howard’s contract was voided on July 31: “In no way, shape or form is there, has there ever been an agreement with Alonzo Mourning. We are in the process of trying to finalize terms with him.”

Nonetheless, the Mourning situation alone would not have jeopardized the validity of the Howard contract. No matter which version of the events would ultimately prevail, the Heat would still have had enough cap space to fit the Howard contract, if not for the Brown and Hardaway rules.

Riley was equally infuriated by the allegations of misappropriation of performance bonuses for Brown and Hardaway.

Under the terms of the CBA, clubs were permitted to offer players performance bonuses that were either “likely to be achieved” or “unlikely to be achieved.” While likely bonuses were to be charged against the cap, unlikely bonuses were not. The CBA defined “likely” bonuses as those based on achievements which were attained by a player or his team the previous season, and “unlikely” bonuses as those based on achievements which were not attained by a player or his team the previous season. The CBA also gave the commissioner authority to contest any “unlikely” bonus he, in his discretion, considered to be, in fact, “likely.”

The incentive in question was one that would have paid Brown $1.5 million and Hardaway $1.0 million for the coming season if the Heat won either 27 home games or 43 total games. Since the Heat had never once won more than 26 home games or 42 total games in its eight-year history, Riley considered the bonuses “unlikely to be achieved.” But the league, noting that the Heat had significantly improved its prospects by signing Howard, disagreed, adding a further $2.5 million to the Heat’s cap sheet.

The ruling was a tenuous one by the league. Riley had reportedly been in constant contact with the league on this issue and, according to Rob Klempner, assistant general counsel with the National Basketball Players Association, the league actually agreed with Riley’s perspective at first. Klempner said the bonuses initially were deemed “unlikely to be achieved” by the NBA. He said the NBA then later backtracked on its position, contending that with Mourning, Howard, Brown and Hardaway on the roster, those bonuses were well within reach and should therefore be considered as “likely to be achieved.” Thus, they they took the bonuses they had already indicated were “unlikely to be achieved” and reclassified them as “likely to be achieved.” Had the league not retroactively reversed its prior position, there would have been no issue whatsoever and the Heat would have recovered the $2.5 million in full.

“We were on the phone on a regular basis, almost daily, move-by-move with the league,” Riley said. “We feel very good about this position.”

But even more tenuous, and downright shocking, about the league’s ruling was that the Howard contract had been executed and submitted to the league office long before the Heat negotiated, finalized and submitted for approval the contracts of Brown and Hardaway (a point which was not in dispute). Even in the league’s own determination, the Heat would have had the necessary cap space for Howard’s contract even if it was conceded that Riley had a prearranged deal in place with Mourning. It was only when adding the subsequently executed Brown and Hardaway contracts that its claims that the Heat had exceeded the salary cap would be true. Yet, rather than simply rejecting these contracts, the league instead used them as a basis for retroactively reversing its prior position on the Howard contract — a highly questionable step taking by the league office and its Commissioner David Stern, who knew full well that without this seemingly illogical step, the Heat could have simply restructured the Brown and Hardaway contracts to accommodate his issues and avoided this entire controversy.

According to the NBA’s calculations, the Heat’s salary cap figure therefore appeared as follows:

The $4.5 million excess was at issue for the league. Given the agreement said to be in place with Mourning (despite a yet-to-be-signed contract) and the treatment of bonus money for Brown and Hardaway (despite the fact that the Heat reached agreement and signed both of these players after they signed Howard), the league argued that the Heat did not have adequate cap space for Howard’s contract.

Riley denounced the ruling as “unconscionable.”

According to his calculations, the Heat was comfortably within the confines of the salary cap:

Riley was infuriated because he felt that Stern was allowing his extreme dislike for him and the Heat organization to cloud his objectivity and fairness. He felt he had operated well within the rules under which all teams operate, and was shocked that Stern would retroactively reverse contractual figures that were already approved over the phone by league officials.

“It is something that is totally surprising to me,” Riley said of the NBA charges. “We haven’t done anything different than any other team has in the league. We have not gone above or beyond creatively.”

Klempner agreed: “These claims are absolutely frivolous.”

Nonetheless, it wasn’t initially expected to be anything more than a minor issue. The upshot from Klempner and three NBA general managers: The Heat wouldn’t have to sweat this one out; an accommodation would be worked out to keep Howard in a Heat uniform, along with Mourning, Hardaway and Brown.

But that’s not how the league elected to proceed. It was preparing for a protracted fight.

Was Stern waging a personal vendetta against the Heat?

Neither Riley nor Heat owner Micky Arison nor Falk was well liked by Stern.

Arison and Riley had tangled with Stern before. In 1995, Stern accused them of colluding to tamper with the Knicks in coming to an agreement whereby Riley would join the Heat while he still had a year remaining on his contract as head coach in New York. The Heat settled, and avoided any league-imposed penalties, by providing the Knicks with $1 million in cash and their first-round draft pick in 1996 as compensation.

Falk was widely regarded as Stern’s supreme nemesis. He is often considered to be the most influential player agent the NBA has ever seen. In fact, during the peak of his career in the 1990s, he was considered the second-most powerful figure in the league behind Stern. He had previously negotiated the then-highest contracts in NBA history for Patrick Ewing and Danny Ferry. But now, and much to the dismay of Stern, he was at the time of the Howard ruling in the midst of spearheading the league’s most unprecedented free agent period in history, during which his FAME company changed the entire salary structure of the NBA, negotiating more than $400 million in contracts for its free agent clients (including the $100+ million contracts of both Howard and Mourning, as well as Jordan’s $30 million deal). These actions would subsequently prompt Stern to negotiate for a maximum salary in the new CBA three years later.

The Heat’s dealings with Mourning, Brown and Hardaway presented an opportunity for Stern to step in and scream foul, and Stern struck with full force and fury.

In a news release issued after Howard’s contract was voided on July 31, the NBA stated that, as dictated by the terms of the CBA, the matter would be resolved by a panel of three arbitrators jointly selected by the league and players union.

The Heat faced significant risk in arbitration. If it were to pursue arbitration, and in the process were to be found guilty of reaching an under-the-table agreement with Mourning that was not reported to the league office, not only would it lose Howard but also Mourning could have had his contract invalidated, the team could have been stripped of future draft picks, Arison could have been fined up to $5 million, and Riley could have been suspended for up to an entire season. It was an unlikely but nevertheless legitimate possibility.

With the support of Howard, who quoted himself as saying to Riley “Coach, I’m behind you 100%,” and with Arison looking on, the Heat trudged forward.

But the time it was taking the Heat to fight this fight was making it nearly impossible to win.

In the next several days the warm relationship between Howard and the Heat quickly cooled. Howard concluded that if he backed Miami and the team ultimately lost a protracted fight, with cap space quickly dwindling around the league, other NBA clubs might have as little as $40 million to offer him for seven years. In effect, he would need to take a $60 million pay cut from what the Heat had promised him and become, he said, “a laughingstock.”

Riley quickly found he couldn’t get Howard to return his calls.

“I mean, this is a business,” Howard later explained. “Yes, indeed, I believe in loyalty. But I believe in loyalty in the sense that it has to be done right and make sure that I don’t lose in no kind of fashion.”

The league leveraged Howard’s uncertainty to levy threats against the Heat organization even before the arbitration hearing had a chance to begin. They also provided Howard with an alternative he couldn’t refuse.

On Thursday August 1, the league declared Howard a free agent, allowing him to sign immediately with any of the league’s 29 teams.

On Friday August 2, NBA Deputy Commissioner Russ Granik told Arison by phone that based on his understanding of the CBA the Heat would be unlikely to regain Howard’s services through arbitration. “You will not get Juwan Howard,” Granik declared, according to Heat officials.

That prompted Riley to go to Florida state court to obtain a temporary injunction later that day, which Dade County Circuit Court Judge Joseph Farina granted. The injunction named not only the NBA but also Howard as defendants, which angered Howard. The order stated that unless the dispute over the validity of the Heat’s contract with Howard was resolved, Howard could not sign with another team — and the NBA could not approve such a contract — unless the contract recognizes the “prior validity and superiority” of the Heat’s deal with Howard. In issuing the ruling Farina stated that the “Miami Heat is likely to suffer irreparable harm if Juwan Howard signs with another NBA team.”

But on Monday August 5, the NBA struck back hard — setting in motion a series of events designed to make the battle impossible for the Heat to win.

First, it filed documents to have the case moved to a more favorable federal court in Miami in an attempt to have the injunction lifted.

Second, it came to an unprecedented agreement with the players union that if a player signs a contract with one team that has been disapproved by the league office and then goes on to sign a second contract with another team, the second contract would be the valid one, even if the first team has not been given the opportunity to complete the appeals process stipulated in the CBA. The league justified the agreement by saying it was intended to protect players against financial losses in disputes between the NBA and its teams. To better understand the gravity of this ruling, you must first understand that ever since the implementation of the NBA’s first CBA all the way back in 1970, the league and players union had always agreed that disputes between the NBA and its teams would be settled by an independent arbitration panel. It was one of the most fundamental bases upon which the league had always operated. In this particular case, however, the league and the players union agreed to change the rules in such a way that an outcome of the arbitration process in the Heat’s favor would effectively be rendered meaningless.

Third, it issued a ruling that made it easy for Howard to return to the Bullets. The league and union agreed to restore Howard’s full Bird rights for the Bullets, even though the Bullets had already used the cap space freed up by Howard’s departure on free agents Tracy Murray and Lorenzo Williams — contracts which were upheld because, as Stern put it, “intervening player transactions could not be undone.” The league effectively retroactively allowed the Bullets to exceed the salary cap in a way no other team in NBA history has ever been allowed. Had the Heat been offered a similar concession, the entire protracted fight would have instantly ended. In exchange for re-signing Howard, the Bullets would be required to forfeit their 1997 first-round pick.

Granted a reprieve after being vilified for allowing their star player to sign elsewhere, the Bullets seized the opportunity. They agreed to match the terms of Howard’s $100.8 million Miami deal, and added an additional $4.2 million to cover Maryland state taxes.

Riley suggested to league officials that the forfeited Washington first-round pick be awarded to Miami as compensation for losing Howard.

The league’s response? “They gleefully said no,” Riley said.

***

Howard’s seven-year, $105.0 million contract, signed with the Bullets on Monday August 5, did contain the “prior validity and superiority” clause required by the court.

‘I’m happy and excited about this,” Howard said at a news conference announcing his return to Washington. “I thank God for putting me in this position again. This is where my heart has always been. It was sad to leave a place like this.”

Riley trudged on for several more days but, with Howard no longer in his corner, he ultimately dropped his fight. He was fighting for a player who no longer wanted to come to Miami.

In a settlement between the Heat, the players union and the league announced on Saturday August 10, Howard’s contract with the Bullets was approved by the league, the Heat abandoned its bid for a permanent injunction, and the league agreed to forgo proceedings against Miami in regards to its alleged under-the-table agreement with Mourning. The contracts of Brown and Hardaway were renegotiated and approved with the disputed bonus money charged against the cap (which, in the case of Brown, was converted to salary), and Mourning was signed to a seven-year, $105.1 million deal with his $9.0 million first-year salary counting fully against the Heat’s cap sheet. The settlement amounted to a league victory on all contested issues.

“The league forced Miami to settle. The league presented the Heat with a pea bargain: If you go to an arbitrator, you’ll go to jail for 100 years. If you don’t, we’ll let you off,” said Falk.

No date had ever been set for the arbitration proceeding. At the time of the settlement, only one of the three arbitrators, New York University law professor Daniel Collins, had been selected. The league and union still needed to agree on two others.

As a result of the settlement, the Heat were left with $4.5 million of cap space. But the uncertainty and limbo of the 10-day fight hindered the Heat’s ability to bolster its roster. In the days between the league’s decision to void Howard’s contract and the settlement, most of the top free agents had already found a home. The damage had been done, and was irreversible.

Riley was irate. And he had no problem telling his side of the story.

In response to the league’s treatment of the issue, Riley commented to reporters:

There was not one mistake made by us when it came to the salary cap. We did not forget how to add. We never broke the rules. We played within the rules of the collective bargaining agreement. The only people who broke the rules were the NBA, because they changed the rules as they went along. That’s a fact.

We were treated totally unfairly in this whole process… This is about one thing. Whatever they used as a smokescreen to disallow Juwan Howard’s contract, they would have done it.

Micky Arison is one of the people who pays the commissioner’s salary. I have no idea why we didn’t get cooperation, despite the fact we were within the guidelines. They took Juwan Howard and put him with the team he wanted to be with. They didn’t want him down here.

I’m very upset about it. We’re very, very, very upset about it. And I spent the weekend at my proctologist’s trying to remove the NBA’s 17-foot pole out of my rear end.

In response to Howard’s change of heart, Riley commented:

The day that Juwan Howard signed a contract with the Washington Bullets is the day I hit a new low in my 30 years in the NBA. I knew that once he signed that contract, we would probably never get him back, even if we took it to the Supreme Court and won it, because he wanted to stay in Washington. It’s very disconcerting to invest $100 million in a player, to go that far, know that you’re going to fight to keep him, and they just run to another deal.

Buoyed with the nine-figure contract he always wanted from the team he always wanted, Howard celebrated by buying a $230,000 Ferrari sports car and by contemplating his dream house: a Washington-area mansion with eight bedrooms, indoor and outdoor swimming pools, a bowling alley, theater, and basketball court. “I want elevators inside my house,” Howard would explain. “That’s always has been a dream of mine.”

***

The ultimate irony is that the league actually did Riley a huge favor in perpetrating its apparent vendetta against the Heat.

It was widely held at the time that the league’s decision would set the Heat’s rebuilding plan back several seasons, and at the same time propel the Bullets forward as one of the league’s most improved teams. Ultimately, the reverse happened.

Riley rounded out his roster with veteran swingman Dan Majerle and hungry youngsters such as Isaac Austin and Voshon Lenard, who each had a huge impact on the performance and personality of what would become a close-knit team. The Heat went on to complete its most successful regular season ever, finishing in second place in the Eastern Conference with a 61-21 record. The regular season win tally remains a team record to this day. In the playoffs, Miami beat the Orlando Magic and New York Knicks before losing in five games to Michael Jordan’s Chicago Bulls in the Eastern Conference Finals. The Bulls went on to win their second title during what would ultimately become their second three-peat.

The Bullets went on to barely make the playoffs as the eighth seed in the Eastern Conference after an unspectacular 44-38 regular season record, and were swept by the Bulls in the first round. They never made another trip to the playoffs with Howard on the roster. Howard’s contract remains notorious to this day as one of the worst in NBA history. He was unceremoniously traded to Dallas in 2001. He has gone on to have a career has a journeyman, bouncing from Dallas to Denver to Orlando to Houston, then Minnesota, back to Dallas, back to Denver, on to Charlotte and finally, to Portland this past season. His teams have never made it to the Conference Finals. He never made another All-Star team again.