Hawks facing lawsuit from former team president over failure to pay: Report

The Atlanta Hawks will have to get litigious.

According to a report from The Atlanta Journal-Constitution’s Rosie Manins, former team president Robert Williams is claiming the Hawks “refuse” to pay him $660,000 of a $410 million television rights contract he negotiated for the franchise.

Per Williams’ official complaint filed on June 28, Manins writes, he is seeking the bonus plus interest and legal fees. A Hawks spokesperson acknowledged the case to Manins but declined to comment on an ongoing legal matter.

Williams also served as president of Philips Arena (the Hawks sold naming rights to State Farm in 2018), culminating what was a 40-year run with the franchise.

The deal, which was with Fox Sports, was announced in 2014.

“FOX Sports South and SportSouth senior vice president and general manager Jeff Genthner, and Atlanta Hawks CEO Steve Koonin, today announced a new long-term television rights agreement,” NBA.com’s atljwilson wrote in 2014. “The new agreement goes into effect with the 2015-16 NBA season. Financial terms were not disclosed.”

Williams began in the role in 2013 and provided a copy of his employment agreement which runs through 2018, per Manins. The agreement spells out Williams’ entitlement to $210,000 plus 5% of every dollar over $32 million with an additional $200,000 bonus if the Hawks “broke even or showed profitability.”

Bob Williams could have troubles collecting full bonus from Hawks

Williams left in 2015 amid a change in ownership led by current governor, Tony Ressler. The former exec was entitled to the higher of the bonuses once does not disclose if he received any bonus pay.

The claim asserts the Hawks’ profitability since then and that conditions for payment were met.

The Hawks generated $142 million in revenue in 2014-15. They generated $326 million in 2022-23, per Statista; an increase of more than 129%. Notably, Bally Sports bought the rights to Fox Sports in 2021 but saw its parent entity – Diamond Sports Group –  file for bankruptcy in March 2023

That put the Hawks’ game broadcasts in jeopardy last season. They aired 10 games on Peachtree TV in a decision made during the season due to the ongoing financial issues for DSG.

That was the result of an agreement between the league and DSG that impacted 15 teams.

In addition to the Hawks, the Cleveland Cavaliers, Dallas Mavericks, Los Angeles Clippers, and San Antonio Spurs among others. The agreement allowed for changes in Diamond’s contracts with those teams, cutting ties after this past season, per The Athletic’s Mike Vorkunov.

Some of the agreements were slated to run through 2030, underscoring the magnitude of the situation.

Diamond is currently reorganizing, complete with a new flagship for its RSNs: FanDuel.

“FanDuel, the sports-betting giant, is close to an agreement to put its brand on 18 regional pay-TV networks owned by Diamond Sports Group,” Bloomberg’s  Christopher Palmeri wrote on June 3.

“A multiyear deal between the companies would also involve FanDuel-related programming for the channels, according to people familiar with the terms, which are still being finalized.”

There have been no further updates on the deal.

Lawsuit against Hawks just tip of the iceberg regarding TV issues

The Hawks 2023-24 television schedule was released in late September, so a similar timeline will reveal when and where fans can catch games in 2024-25. Diamond has also had issues with its former parent company.

“As part of the 91-page re-organization plan Diamond filed earlier this year, the company disclosed that it would extricate itself from the legacy naming-rights deal that its estranged parent company, Sinclair Broadcasting, inked back in 2020,” Sportico’s Anthony Crupi wrote on June 4

“At the time of the transaction, Sinclair received various warrants and options with respect to the common stock of Bally’s, valued at more than $184 million; for its part, Diamond was set up to generate approximately $88 million in naming-rights fees from Bally’s over a span of 10 years.”

Bally’s agreement is slated to end after the end of the 2024 season, after which counsel for Major League Baseball said they anticipate filing an objection, per Crupi.

There is doubt about Diamond’s ability to recover from filing Chapter 11 bankruptcy.

“This chapter of the Bankruptcy Code generally provides for reorganization, usually involving a corporation or partnership. A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. – USCourts.gov”

FanDuel’s involvement could help alleviate that concern. The organization posted a $1.2 billion net loss in fiscal 2023, per SBCAmericas.com’s Justin Byers in March.

Byers also notes that this is a 227.3% increase from 2022.

FanDuel’s parent company, Flutter Entertainment, also posted $11.7 billion in revenue in 2023, per Byers. Flutter also owns Betfair, PokerStars, and Paddy Power. Byers writes that they attribute the loss to a “trademark impairment charge” related to PokerStars.