MANHATTAN (CN) – Days after closing its first season with a Las Vegas championship tournament, America’s new basketball league BIG3 faces a fraud suit in Manhattan.
Champions League Partners filed the Sept. 1 complaint in Manhattan Supreme Court against BIG3 Basketball. The brain child of rapper Ice Cube and Jeff Kwatinetz, BIG3 offers an outlet to retired NBA stars like Allen Iverson and Dermarr Johnson who still have the talent and star power but lost their seat on the bench to new generations of players.
Ice Cube has been quoted as saying he got the idea for his half-court, three-on-three league format last year, after watching Kobe Bryant score 60 points in his last professional game before retirement.
Disputing this in court, however, the Champions League says its five-on-five model, abbreviated in the complaint as CBL, had already signed contracts with more than 140 players by mid-2016.
“Upon information and belief, during 2014 and 2015, business associates and acquaintances of Mr. Cube and Mr. Kwatinetz attended one or more investor presentations given by CBL as part of CBL’s efforts to raise money and promote the CBL,” the complaint states. “Upon information and belief, business associates of Mr. Cube or Mr. Kwatinetz were aware of the CBL’s expansion and ancillary projects which included promotional basketball activities involving 3 on 3 basketball games involving former NBA players.”
Though BIG3 does not offer contact information on its website, court records show that Los Angeles attorney Victor Sapphire filed for the company’s trademark. Sapphire has not returned an email seeking comment.
Champions League says founder Carl George began putting the CBL together in 2011, investing hundreds of thousands of dollars of his own money, and collecting millions more from excited investors.
The CBL’s first team, New York City’s own Gotham Ballers, raised approximately $605,000 from more than 1,700 investors, according to the complaint.
Champions League says its fundraising events that began in 2015 were open to the public, and that there was a very obvious reason why it did not ask players to sign noncompete agreements.
“Since the CBL was expressly formed with the intention of enhancing player opportunities both inside the CBL format as well as outside, the league did not wish to limit players from playing on other professional basketball venues that did not directly compete, provided that such players be available once the CBL provided adequate notice of the commencement of the league.”
Champions League says it was open to letting the players it signed play for Big3 as well as CBL, and that George hashed out the arrangement in a phone call with Kwatinetz on Feb. 16, 2017.
“Unknown to CBL at the time, the BIG3’s real intent was to sign these players and then prevent their playing in the CBL’s summer games,” the complaint states.
Champions League says it delayed its launch until late summer 2017 to avoid conflict with BIG3’s league.
The truth about BIG3’s intent came out, according to the complaint, when CBL started reaching out to players in July about the start of the season.
“To CBL’s surprise, players slated to participate in the CBL’s inaugural game on August 23, 2017 informed the CBL that they would be unable to participate due to threats made by the BIG3,” the complaint states. “Specifically, such players indicated that the BIG3 had asserted that the player agreements prohibited participation in the CBL league for the August 23 game and that any player participating in with the CBL would be found in violation of the BIG3 contract and rules and subsequently significantly fined and/or kicked out of the BIG3.”
BIG3 CEO Amy Trask has allegedly not returned any of CBL’s calls.
Champions League says BIG3 does not appear to have included terms in the contract that forbid players from playing on CBL.
What it has done, according to the complaint, is dangle the promise of participation in 52 percent of revenues as a season-ending bonus pool.
“Upon information and belief, when certain players expressed their desire to participate in the CBL games, Mr. Cube confronted the players personally about playing in the CBL and threatened the players that they would be fined, not allowed to participate in the 52% of revenues bonus pool or replaced on their teams,” the complaint states. “These threats were also shared with the CBL.”
BIG3’s interference ultimately affected 80 percent of CBL’s starting 10 players on the New York and Los Angeles rosters, Champions League says.
Citing negative feedback about playing with replacement rosters, Champions League says it shelved the inaugural game entirely.
Champions League wants $50 million in punitive damages, alleging tortious interference, fraud, breach of contract and other claims.
The league is represented by Wesley Paul.