James Dolan sued by Knicks shareholder for spending too much time with his band
UPDATE: This article has been updated with additional information from a Knicks spokesperson.
If you ask the average New York Knicks fans what their team’s biggest problem is, they might say that James Dolan is spending too much time calling the shots. Funnily enough, the Knicks owner is now being sued for the reverse.
A law firm has filed a suit on behalf of Madison Square Garden Company shareholders over Dolan’s income as the company’s chairman and CEO and how much of his time is spent focused on his band “JD & the Straight Shot” rather than the company he runs, according to Pitchfork.
What’s behind the lawsuit against James Dolan?
The lawsuit, filed by Purcell Julie & Lefkowitz LLP in April, reportedly cites Dolan’s $75.6 million in salary earned over the last three years as “excessive” and “far from fair” when compared to the $17 million average of his CEO peers. The suit claims the highest paid CEO among the group outside Dolan earned $32.4, less than half of the Knicks owner.
However, a Knicks spokesperson clarified Friday that Dolan’s base annual salary is actually only $1 million, with the majority of the $76 million figure coming from a one-time award paid based on the performance of his company.
With the company’s stock price increasing 37 percent since Dolan became CEO in November 2017, that would represent a significant windfall.
The lawsuit also reportedly took issue with the amount of time Dolan has spent on “JD & the Straight Shot.” The lawsuit reportedly claims that Dolan’s band performed 50 times in six countries and 41 U.S. cities during 2017, the idea being that Dolan spends too much time with the band to work effectively as a CEO.
Per a Knicks spokesperson, this lawsuit is one of a number brought by Purcell Julie & Lefkowitz LLP against the board of directors of various companies.
The firm reportedly identifies a company, sends out a release searching for a plaintiff, then files a lawsuit with a single plaintiff — this one being the Norton C. Willcox Testamentary Trust — on behalf of the company’s shareholders. So this isn’t a group of Knicks shareholders banding together against Dolan as previously believed.
James Dolan’s company and family respond to lawsuit
In a statement released to the Financial Times, MSG said the lawsuit “amounts to nothing more than corporate harassment,” and said “the company stands by its policies and practices.”
Dolan’s family also jumped in to criticize the lawsuit, saying that Dolan experienced a similar lawsuit in 2015 when Dolan was CEO at Cablevision. Via Pitchfork:
In a separate statement, the Dolan family — several of whom, as MSG board members, are named in the complaint — told Agenda that “these [law] firms represent the worst in our legal system. They manufacture complaints and then advertise for clients, also known as trolling. Members of these firms tried the same tactic at Cablevision [where Dolan previously served as CEO]. They lost and will lose again. We look forward to fully litigating this matter to conclusion. We will never settle nor give in to this corporate extortion.” (In 2015, a Delaware judge dismissed a similar lawsuit at Cablevision.)
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