Scouting report sparked Hawks probe

An internal and unexpected chain of events stemming from a June conference call looking ahead to free agency led to Atlanta Hawks owner Bruce Levenson putting controlling interest in the team up for sale Sunday, multiple officials told ESPN.com.

A racially insensitive email written by Levenson more than two years ago came to light only after one of his co-owners called for an investigation because of something that was included in a background report on free-agent target Luol Deng that was read aloud by team general manager Danny Ferry, who did not fully edit the remark as he read it off the report, according to multiple sources.

Hawks CEO Steve Koonin, who has assumed day-to-day control of the team while sale proceedings begin, told the Atlanta Journal-Constitution on Sunday that Ferry will also be disciplined for his role in the situation. The nature of the discipline was not disclosed by the team.

Sources say that, as of Monday, Ferry was in line to remain as Hawks general manager.

Koonin told the Journal-Constitution that the Hawks held a meeting in early June to discuss potential free-agent targets. According to Koonin, Ferry cited a background report that included an "offensive and racist" remark about a player.

"Instead of editing it, he said the comment," Koonin said.

The Hawks held a players-only meeting Sunday night to discuss the situation, sources with knowledge of the situation told ESPN The Magazine's Chris Broussard.

The meeting, which was held at Philips Arena, occurred after the Hawks players were addressed by Koonin, Ferry, coach Mike Budenholzer and assistant GM Wes Wilcox.The officials apologized to the players and then left the locker room to allow the players to talk among themselves.

More than 10 players attended the meeting, including some of the club's non-African-American players. One person familiar with the meeting said the players were extremely upset with the club's management and ownership.

Earlier Monday, ESPN.com's Marc Stein and Ramona Shelburne first reported that the player referred to was the Sudan-born Deng, who is among the most respected veterans in the league and was named in April as the winner of the J. Walter Kennedy Citizenship Award presented annually by the Professional Basketball Writers Association for his off-court charity work.

Yahoo! Sports and the Journal-Constitution, in subsequent reports Monday, quoted Ferry as saying of Deng: "He is still a young guy overall. He is a good guy overall. But he is not perfect. He's got some African in him. And I don't say that in a bad way."

The Hawks, sources said, were reluctant in July to make a multiyear commitment to Deng, who ultimately landed a two-year deal from the Miami Heat worth $20 million after LeBron James left the Heat to return to his home-state Cleveland Cavaliers.

Without identifying Deng or revealing specifics about what was said, Koonin told the Journal-Constitution that the comment troubled others on the conference call, saying, "This is wrong. This should not be said. It's not appropriate in any world but not a post-Sterling world."

"I support Steve's leadership and greatly appreciate his support," Ferry told the newspaper Sunday. "I look to learn from this situation and help us become a better organization."

Yahoo reported Monday that Ferry has met with Hawks coaches and players to apologize. Koonin, meanwhile, told the Journal-Constitution that the Hawks were not in a position to discipline the author of the background report for the comment because it originated with an employee of another team.

"It was word of mouth," Koonin said. "It was background information. Something was shared with Danny that was shared with the group."

The meeting took place less than two months after NBA commissioner Adam Silver banned Donald Sterling, the Los Angeles Clippers' former owner, for life and started proceedings to force him to sell the team when racist comments he made became public. Levenson had been one of the most outspoken owners against Sterling's actions.

After the meeting, one of the Hawks' stakeholders called for an internal investigation based on the remark being in the team's research of a player.

The team hired an Atlanta law firm to perform an investigation, which included 19 interviews and a review of more than 24,000 documents, according to the team.

It was in the review of those documents that Levenson's email was discovered.

The email, which was sent to Ferry and copied to several of Levenson's partners, had numerous comments that could be considered racist when discussing the atmosphere at Hawks games. In it, Levenson suggested changes that he thought would potentially attract more white ticket buyers. It included the following passages:

"I think southern whites simply were not comfortable being in an arena or at a bar where they were in the minority" and "I have been open with our executive team about these concerns. I have told them I want some white cheerleaders and while I don't care what the color of the artist is, I want the music to be music familiar to a 40 year old white guy if that's our season [tickets] demo. I have also balked when every fan picked out of crowd to shoot shots in some timeout contest is black. I have even [complained] that the kiss cam is too black."

The Hawks' ownership group has a cluster of owners based in Atlanta and a cluster based in Washington, D.C., that includes Levenson. The group, which operates as Atlanta Spirit LLC, has been divided frequently since it bought the team in 2005.

There have been lawsuits among owners over personnel decisions, a failed sale attempt of the Hawks in 2011 and Atlanta Spirit's sale and relocation of the NHL's Atlanta Thrashers to Winnipeg, Manitoba, that same year.

After Levenson's email was found, the Hawks informed the NBA, which launched its own investigation. Within the past week, sources said, the details of the email became known to several other owners and league officials as Silver discussed the league's options.

Although no punishment decision had been reached, Levenson chose to sell the team on his own, several sources told ESPN. Convinced the email was going to become public eventually, Levenson believed there would be damage done to the team's business if he stayed on as controlling owner and informed Silver that he intended to sell.

In the wake of the announcement, the Hawks reached out to their players to explain the developments. In general, sources said, the players were upset by Levenson's comments. He was well-liked by players and around the league as a whole.

Even as the investigation progressed during the summer, Levenson discussed his optimism for the upcoming season with friends and associates and gave no indication that he planned to sell the team in the short term, sources said.

It will be the NBA, not Levenson, that takes the lead on the sale, which could move reasonably quickly. There was strong interest in the Milwaukee Bucks, who sold for $550 million earlier this year, and multiple bids for the Clippers, who ultimately sold for $2 billion this summer.

There are several deep-pocketed groups that have made their interest in buying a team known to the NBA, making it likely that a controlling interest in the Hawks will have high demand.

The team has made the playoffs in each of the past seven seasons, the longest current streak in the Eastern Conference and second-longest in the NBA behind the San Antonio Spurs' 17. The team is in position to have more than $30 million in salary-cap space next summer.

However, the Hawks finished 28th in attendance last season.

They have a lease with Philips Arena that runs through the 2017-18 season.

Information from ESPN The Magazine's Chris Broussard was used in this report.