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Hawks ownership feud uncovered Danny Ferry-Bruce Levenson scandal

Jeff Zillgitt
USA TODAY Sports
Hawks co-owners Michael Gearon Jr., left, and Bruce Levenson disagreed on what to do with the team.

Within the past year, Atlanta Hawks co-owner Michael Gearon Jr. approached fellow co-owner Bruce Levenson about selling the franchise, two people familiar with the situation told USA TODAY Sports.

Levenson wasn't interested in selling but is going to do that now, and with NBA now in a seller's market, Gearon will be in position to cash in on his investment — despite financials losses in the past decade. Gearon understands that if he wants to capitalize, he needs to sell more than just his stake. The Hawks are worth more when a majority of the team is sold.

So for the second time in the past few months, an ownership group mired in a controversy over the use of racial language could stand to make a significant amount of money selling the team. In the case of the Hawks, how they got here is a decade of poor judgment, mismanagement and a power play among owners.

When Hawks general manager Danny Ferry made racist comments about Luol Deng during a free-agent conference call in June, the team hired Atlanta law firm Alston & Bird to conduct an independent review. That investigation uncovered a 2012 e-mail from Levenson that used racially insensitive and crude language to describe Hawks fans.

Ferry wasn't fired but was issued a significant fine, two people told USA TODAY Sports, but even with that punishment and two apologetic statements, Ferry announced late last week he was taking an indefinite leave of absence. Ferry made a serious mistake when he uttered racially insensitive comments about Deng, even if they were from a report provided a former front-office executive from another team.

In interviews with multiple people who have ties to Levenson, Gearon and Ferry, an unflattering depiction of Hawks management, including ownership, has emerged.

Those people requested anonymity because they were not authorized to speak publicly about the sensitive nature of the situation.

As soon as Ferry made his comments about Deng, Gearon seized an opportunity to do what he wanted to do: Get rid of Ferry. Ferry and Gearon never hit it off. Two years ago, Ferry had reservations about becoming the Hawks general manager because of Gearon, for whom Ferry was suspicious, three people told USA TODAY Sports.

Likewise, Gearon wasn't thrilled with Ferry, but went along with the hire. Ferry had success with the Cleveland Cavaliers during LeBron James' first era. Ferry put the Cavs in position to reach the Finals in 2007, advance to the conference finals in 2009 and win 60-plus games twice.

The Hawks needed a big-picture GM, and Ferry was Levenson's choice.

Levenson assuaged Ferry's fears and convinced him to take the job, making it clear Ferry reported to him. Ferry wasn't shy about letting people know that, and Gearon felt his ownership stake was marginalized.

Ferry, who has been described by allies as unwaveringly loyal, was hired to make the Hawks a contender, but his style didn't always help him make friends. Shortly after Ferry took the Hawks job in 2012, he dismissed longtime Hawks public relations director Arthur Triche, the first African-American team PR director in the NBA and a popular employee with the organization. Ferry has also alienated some popular ex-Hawks players.

Those actions didn't sit well with Gearon, an Atlanta native whose dad, Michael Gearon Sr., was a longtime Hawks executive. To top it off Ferry can be curt and difficult to work with, and the two clashed.

So when Ferry made his comments, Gearon wrote a letter to Levenson in which he called for Ferry's dismissal, saying, "If Ferry's comments are ever made public, and it's a safe bet they will someday, it could be fatal to the franchise." Then, Ferry's comments were made public.

Gearon recorded the nearly hour-long call but only a brief snippet of the audio has been made available, and there is no full transcript of the call, three people familiar with those details told USA TODAY Sports. The league requested a full transcript, but one was not provided.

Ferry's comments sparked the independent review, and the aftermath has rattled the franchise. Levenson is on his way out and Ferry is on indefinite leave.

Turns out, Gearon might be getting two wishes.

Also in Gearon's letter to Levenson, he wrote, "The racial diversity of our management team has changed for the worse since Ferry took over."

Yet, the Hawks have four African-American vice presidents, including three who are on the eight-person executive committee. Only the Miami Heat and Charlotte Hornets had more African-Americans in such positions, according to Richard Lapchick's 2014 Racial and Gender Report Card for the NBA.

Gearon made a power play, but his tactics aren't appreciated by all. Why was he recording the conference call and why was the full audio and transcription not available to the NBA?

One agent wonders if he can trust Gearon not to record their conversations, and one owner told USA TODAY Sports he would not want Gearon to be Atlanta's controlling owner. Owners are not thrilled about intense scrutiny in a post-Donald Sterling NBA, which is what Gearon invited.

Hawks ownership has not been a model of stellar management since Levenson, Gearon and ex-Hawks owner Steve Belkin, along with other partners, bought the Hawks and NHL's Atlanta Thrashers in 2004. There was trouble from the start, with Levenson based in Washington, D.C., Gearon in Atlanta and Belkin in Boston.

Belkin was the team's governor, the man who approved business and basketball moves. In 2005, Levenson and Gearon wanted to acquire guard Joe Johnson from the Phoenix Suns and send forward Boris Diaw and two first-round picks to Phoenix. Belkin objected, saying the Hawks were giving up too much for Johnson. The owners bickered, publicly, and then-NBA commissioner David Stern called Belkin, Levenson and Gearon to his New York office and urged them to resolve their differences.

That didn't happen. Levenson and Gearon called a vote to remove Belkin as team governor, and Belkin filed a lawsuit in Boston in August of 2005. That suit wasn't settled until 2010, and Levenson's group and Gearon's group bought out Belkin.

Since 2004, Hawks have been run on a tight budget. Amid all that, they have been a regular playoff team since 2008 although they haven't advanced beyond the second round.

Interestingly, Ferry has the Hawks in the right direction. Tired of first- and second-round playoff exits, Ferry wants the Hawks to be a contender in the East, not just a run-of-the-mill playoff team.

In 2013, Ferry dismissed Larry Drew and hired Mike Budenholzer as coach. Ferry also has spent money on forward Paul Millsap and guards Jeff Teague and Kyle Korver and signed guard Thabo Sefolosha this summer.

He drafted guard Dennis Schroeder in 2013 and Adreian Payne in June, and Atlanta will have money to spend in free agency next summer. It is uncertain if Ferry will be the GM then. Even if he survives this crisis, new controlling ownership likely will look for a fresh start in the front office.

The Hawks have issues and they're in the process of being resolved, and Gearon might be the one who gets exactly what he wants.

But more important, the Hawks might rid themselves of ugly and detrimental in-fighting among owners.

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