Arenas Contract Could Become Conundrum for N.B.A.

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Earlier this month, I described the effect Gilbert Arenas’ suspension can have on the Wizards, the league, and Arenas himself. Since then, Arenas has pleaded guilty to a felony charge of carrying an unlicensed pistol. Sentencing is scheduled for March 26, and it is unlikely the league will act before then to change his current indefinite suspension.

We still don’t know if the Wizards will seek to terminate Arenas’ contract, also unlikely to be decided before March 26, but if they do, they could find themselves at odds with the N.B.A. front office.

The Wizards have plenty of reasons to seek termination, citing the morals clause that is part of every player’s contract. This clause gives the team the right to terminate the contract should the player “at any time fail, refuse, or neglect to conform his personal conduct to standards of good citizenship [or] good moral character (defined here to mean not engaging in acts of moral turpitude, whether or not such acts would constitute a crime).”

The Wizards have already said they find Arenas’ behavior unacceptable, and the ship has probably long since sailed on repairing their relationship. There’s also the matter of the $88.3 million he’s still owed on his contract for the remainder of this season and through 2014 – not including any luxury tax they also may have to pay. And there’s virtually no chance of a trade. Arenas may have the least tradeable contract in the league right now.

However, the current collective bargaining agreement is set to expire in 2011. Both sides are already gearing up for the negotiations, and the league will be seeking a number of concessions from the players. One of these could be altering the nebulously-worded morals clause, giving the teams a clear set of criteria for terminating a player’s contract.

The league is still chagrined by the Golden State Warriors’ attempt to void Latrell Sprewell’s contract in 1997, after Sprewell attempted to choke Coach P.J. Carlesimo. This action was overturned by the league’s arbitrator, who ruled that Sprewell did not violate the morals clause.

Given this history, the league could find itself in a no-win situation should the Wizards attempt to void Arenas’ contract. It would certainly be grieved by the players’ association on Arenas’ behalf. Should Arenas prevail in the subsequent litigation, it would be a severe blow to the league.

But even if the league prevails in litigation, their negotiating position would be weakened. A victory would send a message that the current language in the morals clause is sufficient and not in need of revision.

Given this no-win situation, the league might prefer that the Wizards seek to buy out Arenas’s contract. It would be expensive –- even if they pay 50 cents on the dollar, Arenas would still receive $44 million –- but it might be the best solution for everyone.