Prospective Chinese Cavaliers Investor Facing Legal Troubles
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James Will Have To Be Careful With Any China-
Based Opportunities As A Result Of Partnership |
Florida-based import/export company AutoChina Limited has filed suit against Chinese businessman Kenny Huang, who is leading a consortium "purchasing a minority stake" in the Cavaliers, according to Brian Windhorst of the Cleveland PLAIN DEALER. While the outcome of the suit "does not directly impact" the Cavs investment, it "could give [the NBA BOG] some pause because it involves a liaison relationship between U.S. business and Chinese business, the same basic role Huang would be playing with the Cavs and Chinese investors" (Cleveland PLAIN DEALER, 5/30). On Long Island, Alan Hahn noted the NBA will "have to keep a very close eye on any China-based opportunities that are offered" to Cavaliers F LeBron James "as a result of this partnership because, technically, it can be viewed as a means of circumventing the salary cap." However, NBA agent Keith Glass said, "If a company wants to hire LeBron James ... I don't think there's anything the league can do about that. But if they go to LeBron and said, 'Here's your salary. We can give you more money than anybody else and we can sign you to an endorsement,' now you are circumventing the cap." Meanwhile, Hahn noted with the investment, Cavaliers Owner Dan Gilbert gets a "much-needed infusion of cash to help with the franchise's bottom line and maintain a hefty payroll that otherwise would cripple the resource-limited middle-market team" (NEWSDAY, 5/31).
A QUICK-EN STUDY: In N.Y., Katie Thomas writes Gilbert, four years after acquiring the Cavaliers from Gordon Gund, has "been credited with transforming the small-city team into one of the most coveted franchises in the league." Gilbert has "accomplished this feat in no small part by maintaining a keen awareness of the needs of James." The Cavs have "done everything from building a practice facility closer to James's home to hiring an omelet maker to prepare brunch for players on the road." And the potential investment from the Chinese consortium has been "interpreted as yet another attempt to keep James in Cleveland." Prior to owning the Cavs, Gilbert "built a reputation as an innovative if sometimes quirky thinker who transformed his brick-and-mortar bank," Quicken Loans, "into an online pioneer." While Quicken Loans employees are "treated to lavish perks, including trips to Cleveland to watch Cavaliers games," Gilbert also "can be an exacting manager" (N.Y. TIMES, 6/1).
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