A New York judge ruled Friday that NBA Commissioner Adam Silver must resolve a dispute between the New York Knicks and Toronto Raptors over the alleged theft of thousands of confidential files.
Less than a week after the Knicks sued the Raptors in August 2023 over the alleged theft, Toronto asked Silver to step in and help settle the dispute. The Raptors continued those efforts in court filings in the months that followed, arguing that the lawsuit had “no reason to waste judicial resources” given Silver’s authority to try it.
The Knicks, who were seeking more than $10 million in damages in the lawsuit, have pushed back against the Raptors’ request, arguing that Silver should not get involved in part because of his close relationship with Raptors governor Larry Tanenbaum, who is also chairman of the NBA’s board of governors.
On Friday, U.S. District Judge Jessica Clarke ruled and sided with the Raptors, who are now sending the case back to Silver, according to a court filing obtained by ESPN.
For now, the case, which was proceeding in the U.S. Southern District Court in Lower Manhattan, is on hold while the parties explore the possibility of reaching an amicable resolution.
If Silver determines the case cannot be arbitrated, the court must be notified within seven days of that decision, according to the filing. All parties have until Dec. 13 to provide the court with an update on the status of the arbitration process.
“The Raptors and (Raptors owner Maple Leaf Sports & Entertainment) are pleased that the court has decided that this matter should be resolved by the NBA, which we believe is the appropriate forum for disputes of this nature,” a Raptors spokesperson said in a statement to ESPN. “We hope this will bring this matter closer to a resolution.” »
A spokesperson for MSG Sports, which owns the Knicks, said in a statement to ESPN that the team “continues to evaluate our legal options.”
“We were the victims of a theft of confidential and proprietary files in clear violation of criminal and civil law,” the statement read. “We do not believe it is appropriate for the NBA Commissioner to rule on a matter involving his boss, the NBA President, and his staff.”
The NBA declined to comment.
In the initial complaint, the Knicks alleged that the Raptors poached Ikechukwu Azotam, who worked for New York from 2020 to 2023, and ordered him to provide a wealth of inside information after Toronto began recruiting him. in the summer of 2023. The Knicks argued that this effort was intended to give the Raptors a competitive advantage.
“The truth or falsity of this allegation is not the issue at this point,” Clarke wrote in his Friday filing. “Instead, the question before the court is where this matter should proceed: either in this court or in arbitration before the commissioner of the National Basketball Association.”
The judge added that the answer to that question depended on the wording of the NBA constitution, which, under Rule 24 (d), gives Silver broad powers over such disputes.
This regulation states: “The Commissioner has exclusive, full, entire and final jurisdiction over any dispute involving two (2) or more members of the Association.”
Relying on similar court precedents involving other general arbitration clauses, the judge wrote that “the determination of whether this dispute is arbitrable is within the jurisdiction of the NBA Commissioner, not the Court “.
The Knicks alleged that Azotam — who worked for the Knicks as an assistant video coordinator and then as a director of video/analytics/player development assistant — sent the Raptors thousands of confidential files, including play-rate reports, a preparation book for the 2022-23 season, video scouting files and opposition research.
The Knicks also alleged that Azotam did so at the request of the Raptors, who they said were trying to “organize, plan and structure the new coaching and video operations staff,” the August 2023 complaint states.
The Raptors, Azotam, Toronto head coach Darko Rajaković, player development coach Noah Lewis and 10 “unknown” employees were listed as defendants in the lawsuit.
In an October 2023 court filing, the Raptors called the Knicks’ allegations “baseless” and a “public relations stunt” while asking Silver to intervene. The Raptors also argued that “the alleged ‘data theft’ involved little more than publicly available information compiled from public sources readily available to all members of the NBA.”
In a court filing a month later, the Knicks argued that Silver had a conflict of interest because of Tanenbaum’s position as chairman of the board of governors.
“Tanenbaum is Silver’s boss and exercises control over his employment and salary and has strong influence over him,” the Knicks said. Additionally, the Knicks highlighted the friendship between Silver and Tanenbaum.
“Tanenbaum has been described, among other things, as a ‘close ally of Commissioner Adam Silver,'” the Knicks wrote. Silver himself has described Tanenbaum as ‘not only my boss as chairman of the board, but he is also a true role model in my life.’ If Silver were to preside over the current dispute, he would be arbitrating a case for his boss and ally.’
The Knicks also highlighted the limits on Silver’s power to impose monetary penalties under Article 24 of the NBA constitution, which states the commissioner cannot issue a penalty greater than $10 million. The Knicks also pointed out that the league constitution does not allow Silver to award legal fees in the event of a dispute between two teams.
“As the Knicks intend to prove at trial, the damages exceed $10 million,” the Knicks said in the filing, adding that they also intend to seek attorneys’ fees.
The lawsuit itself constitutes a rare case of one professional team suing another. The only other case where ESPN’s research could uncover involving two NBA teams was a legal battle between the Knicks and Nets in 1977 over the Nets’ attempts to move from Long Island to New Jersey.
The lawsuit between the Knicks and Raptors appears to be the first between two NBA teams that focuses on basketball-related information.
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