Knicks Owner Sued For Inflated Salary, Playing With Band

MIDTOWN MANHATTAN, NY — A shareholder of the Madison Square Garden company sued CEO and New York Knicks owner James Dolan for earning an excessive salary, according to reports. If the judge is a Knicks fan, Dolan may have reason to be worried.

The shareholder, an entity called Norton C. Willcox Testamentary Trust, argued in a lawsuit filed in Delaware that Dolan's pay raise from $3.6 million in 2016 to $11.8 million in 2017 and $11.6 in 2018 is excessive when compared to CEOs at similar companies, financial news publication Agenda first reported. The lawsuit also claims that Dolan doesn't deserve the pay because he devotes most of his professional efforts to his music career.

Dolan plays guitar and sings for rock band JD & The Straight Shot, and spends more of his time touring with the band than performing his duties as CEO, the lawsuit claims. The band has released seven albums since 2005 and has 20 concerts scheduled for this summer, according to its website.

Plaintiffs will have to prove that Madison Square Garden's board failed to exercise proper due diligence when deciding on Dolan's compensation, Agenda reported. Similar legal cases rarely pan out for plaintiffs, and a lawyer who spoke with the news site said the Dolan lawsuit is "highly unusual."

A spokesperson for the Dolan family called the lawsuit an attempt at "corporate extortion" and said the law firms that brought the suit "represent the worst in our legal system."

"They manufacture complaints and then advertise for clients, also known as trolling," the statement sent to Agenda reads. "Members of these firms tried the same tactic at Cablevision. They lost and will lose again. We look forward to fully litigating this matter to conclusion.

The lawsuit was filed by the law firm Purcell Julie & Lefkowitz LLP. In January the firm issued a press release calling on shareholders of Madison Square Garden to contact the firm regarding an "investigating a potential breach of fiduciary duty claim involving the board of directors of The Madison Square Garden Company."

A spokesperson for Madison Square Garden said that the law firm has sent out similar releases for more than 250 different companies. The spokesperson said that Dolan has added $2 billion in value for the company since becoming its CEO.

Read the full Agenda report here.