Case Study
A Power Play for Howard
Student Name
University
Subject
Case Study: A Power Play for Howard
As a sophomore during the 1995-96 NBA season, Juwan Howard posted superstar-like
numbers for the Washington Bullets. The fifth pick in the 1994 NBA Rookie Draft was
immediately courted by many teams as he was about to be a free agent in the 1996-1997
season.
Although publicly stating he wanted to stay with the Bullets, Howard and his agent,
David Falk, were not attracted to the team’s seven years $78 million offer. Howard felt that
his market value was far more than that. Then Miami Heat offered a 7-year/$98M contract.
The Bullets pushed their offer to $89M, but stopped short of matching the Heat’s offer.
On July 15, 1996, Howard signed a $101 million contract with the Miami Heat. However,
this contract was voided by the NBA citing that the Heat exceeded its salary cap. On August
5, 1996 Howard returned to the folds of the Bullets after signing a seven-year contract worth
$105 million. The Heat went to court to challenge the NBA’s ruling.
Assumptions
The NBA indicated that the Heat violated its salary cap and only used this as basis to
void its contract with Howard. However, salary cap violations come with strict penalties - $5
million penalty to the team and a season long suspension for Heat Coach Pat Riley. The NBA
maintained that the Heat already had an agreement with center Alonzo Mourning before
signing Howard and, that the bonuses of two other players were not counted against the cap
when they should have been.
Vantage Points
1. Impose the $5 million penalty against the Heat and season suspension for Coach Riley.
2. Give concessions to Miami for it to stay competitive in the league during the season.
3. Allow the courts to settle the matter.
A Power Play for Howard 1
Diagnosis
Impose Sanctions against the Heat
For the NBA to pursue its allegations of salary cap violations against the Bullets it
would have to seek imposition of the $5 million penalty against the Team and a season long
suspension of Coach Pat Riley.
The league maintained it had evidence that the Heat had an agreement with its center
Alonzo Mourning prior to signing Howard – a violation of salary cap rules. The league also
maintained that the bonuses in the contracts of Tim Hardaway and P. J. Brown were not
counted against the cap by Miami, and that those bonuses should have been included. These
allegations, as expected, were denied by the Heat camp.
Voiding Howard’s contract with the Heat and imposing severe penalties on the team
may have been the right thing to do, but many things would have to be given consideration –
the Heat can contest the matter in court and the league could face a backlash from Miami fans
and other fans of the league who might view this action as too much on the part of the NBA.
Remember, the Heat took pains to prepare for drawing Howard to Miami unloading several
of its high value players to make room for Howard. Now left with a shallow roster of talents,
Miami will be facing an uphill challenge to stay competitive and maintain its base of loyal
fans in market rich Miami.
If the Heat decides to slug it out in court, as would be expected if the matter reaches
arbitration, the players union and the team owners would be coming into the picture as the
union was supporting Howard and the Heat was getting sympathy from some team owners. In
that situation, a lock-out scenario could be inevitable and it’s one scenario that the NBA –
from Howard Stern down to the last man in a team’s staff - dreads.
Give Concessions to Miami
A Power Play for Howard 2
The NBA can opt not to pursue sanctions against the Heat as a concession. At the
same time the league should recognize the Heat’s disadvantages – if losing Howard is not
enough, losing key players just to make salary room for Howard has given a serious dearth in
team competitiveness. The league should stay away from giving impressions that it favors
certain teams.
Coach Riley had suggested that the Bullets’ first round pick should have been given to
the Heat. Giving Miami concessions would allow it to stay competitive and maintain their fan
base.
The NBA decided that that Washington can keep the players it had signed up after
renouncing Howard - Tracy Murray and Lorenzo Williams, Rod Strickland and Harvey
Grant. These are high caliber players that Washington could not have been able to sign up if
their initial deal with Howard pushed through in the first place. Sure the Bullets forfeit their
next year's first-round draft choice for the right to re-sign Howard still they got a huge
concession in this case.
The league can also require the Bullets to release one or both of their free agent
signings (Tracy Murray and Lorenzo Williams) and pay the difference between the final offer
for any player cut and the deal they signed with the Bullets.
In the overall picture, Washington became a powerful team by a stroke of
circumstances. And the Heat just had to start from scratch, again.
Allow the courts to settle the matter
The Heat had gone to Florida state court and was granted a temporary injunction. According
to the Heat, the judge's order stated that Howard could not sign with another team, and that
the league could not approve Howard’s contract with the Bullets, unless the contract
recognized the prior validity and superiority of Miami's contract. If the Heat won the case it
would have been disastrous for the league as its powers to scrutinize and approve player
A Power Play for Howard 3
contracts will be put to question. Team owners can follow suit and bend the salary cap rules
then bring the matter to court and have a reference case to peg against.
On the other hand, if the league wins the case and Miami gets sanctioned, the Heat would
claim that David Stern succumbed to pressure by the Bullets and, more importantly, by the
players’ union - an idea that would not sit well with a lot of team owners.
Prescription
The NBA is successful because it thrives on balanced competition. And one way that
ensures that balance is the implementation of a salary cap. If not for the cap the richer teams
will raid the players’ roster with abandon. Fans like to see healthy competition; they don’t
pay to see their team to get trashed by other teams with deeper resources. I say impose the
sanctions on Miami. The spiraling salaries of players need to be put in check. Otherwise,
what is a salary cap for? Ultimately it is the fans that pay for the spectacle that is the NBA.
And they will pay more if the league loses sight of this basic premise.

…References
Brown, C. (1996). Howard: 2 Deals, 2 Teams, $200 Million. Retrieved October
26, 2007 from
http://topics.nytimes.com/top/reference/timestopics/people/h/juwan_howard/
Brown, C. (1996). Howard Will Remain a Bullet, After All. Retrieved October
26, 2007 from
http://topics.nytimes.com/top/reference/timestopics/people/h/juwan_howard/ …
Howard Attempting To Return to Bullets (1996). The New York Times Archives,
Retrieved October 26, 2007 from
http://topics.nytimes.com/top/reference/timestopics/people/h/juwan_howard/
N.B.A. Rejects Howard Deal (1996). The New York Times Archives, Retrieved
October 26, 2007 from
http://topics.nytimes.com/top/reference/timestopics/people/h/juwan_howard/
Where Will Howard Play Next Season? (1996). The New York Times Archives, Retrieved
October 26, 2007 from
http://topics.nytimes.com/top/reference/timestopics/people/h/juwan_howard/