Ice Cube, Steve Bannon and the Weirdest Legal Battle in Hollywood
After a basketball league founded by the rapper-actor and Jeff Kwatinetz ran into rough seas, the pair filed a $1.2 billion defamation lawsuit against two lead investors, who now assert that the whole thing is a Bannon-orchestrated "anti-Qatari smear campaign."
Whether it's Jessica Alba's family products line, The Honest Co., or Gwyneth Paltrow's lifestyle brand, Goop, celebrity side businesses often generate as much controversy as they do cash. Still, BIG3 basketball, co-founded by rapper-actor Ice Cube and Hollywood executive Jeff Kwatinetz in 2016, might be in a league of its own. In slightly more than a year, it has gone from buzzy startup to central player in a sprawling political and legal drama involving Steve Bannon and the country of Qatar.
The "3" in BIG3 refers to the fact that each team fields three players, not five. Games are played on a half-court, with two- and three-point shots, but also a four-point zone; the first team to reach 60 points wins. NBA legends including Allen Iverson, Julius Erving and Gary Payton coach and play on teams like the Killer 3's and Ball Hogs, each with a roster of former pros, which means a potentially large built-in fan base. The first season kicked off in June 2017 with four games at Brooklyn's Barclays Center, each attended by 15,000. But the roar of the crowd was quickly drowned out by rumblings of a different sort when two investors with ties to the Middle East got involved a month later.
Ayman Sabi is a Palestinian-American raised in North Carolina. His business partner is former Qatari diplomat Ahmed al-Rumaihi, who until March 2017 ran Qatar Investments, an arm of the Qatar Investment Authority, which controls hundreds of billions of dollars. (Al-Rumaihi found himself in the news recently after Stormy Daniels' lawyer Michael Avenatti released photos of him boarding a Trump Tower elevator with Trump lawyer Michael Cohen and former National Security Adviser Michael Flynn in December 2016.) The pair had been introduced to Kwatinetz — the talent manager and Harvard law grad who had opened production companies The Firm, Prospect Park and Overbrook Entertainment — by BIG3 president and commissioner Roger Mason Jr., who played 10 seasons in the NBA.
According to legal documents, Sabi and al-Rumaihi, via limited liability company Sport Trinity, agreed to invest $11.5 million, along with an additional $9 million in sponsorship funds, to be disbursed at a later date. In return, they would get a 15 percent share as passive investors and seats on BIG3's board. In July, about a month after the first games, Sport Trinity ponied up an initial tranche of $6.5 million. In November, they added another $1 million. This left Kwatinetz, 53, $4 million shy of what was promised, which is where the trouble began. Before too long, the dispute had moved into arbitration.
Both sides have laid out their positions in a series of legal complaints and counter-complaints: Kwatinetz alleges that the investors failed to fulfill their contractual obligations. Sabi and al-Rumaihi — who spoke with THR in their first public comments since the dispute began — allege Kwatinetz never implemented basic corporate governance called for by the contract, which they say BIG3 required to survive. They also say Kwatinetz misled them about the league's finances, citing mounting losses and revenues significantly lower than projected. Nonsense, claims Kwatinetz's lawyer Mark Geragos — who points out that BIG3 is about to kick off a second season with an Adidas sponsorship already locked in. Geragos claims "not one single thing the investors have said is true." (Kwatinetz himself declined to speak, as did Cube, whose role as the company's public face means he's been one step removed from much of the legal wrangling.)
Sitting on the expansive pool deck behind al-Rumaihi's Beverly Hills mansion in May, the investors claimed their dispute with Kwatinetz is rooted in legitimate business concerns and that any investor would have acted as they did. "The balance sheet didn't balance," says Sabi, echoing his legal position. "Our due diligence was discovering one thing after another, and we were genuinely giving Jeff the benefit of the doubt." In court documents, Kwatinetz himself acknowledged problems with BIG3's books, saying his accountant "fucked up a lot of stuff" and "cost us $5 million from Qatar."
Sabi and al-Rumaihi were the biggest shareholders in BIG3, with more than three times the equity of the next largest. As the dispute has worsened, several members of BIG3's management team have left the firm and are backing the investors' version of events. "I was at a dinner where Jeff was promising all the corporate infrastructure and bringing in a COO," says Kai Henry, a longtime friend and associate of Kwatinetz's and the league's former chief marketing officer, who has since left the company. "Instead, Jeff named himself CEO in the fall. Everything bottlenecked to him. None of the executives had any power or range to do anything."
Sabi and al-Rumaihi began to feel uncomfortable. Echoing their court filings, they contend that Kwatinetz ran BIG3 like "an events management company" — with little to no corporate oversight and a fly-by-the-seat-of-your-pants ethos — instead of the billion-dollar enterprise that everyone agreed it could become. "Every time I asked Jeff, 'Where is our corporate structure? Where is our business plan?' he would point to his head and say, 'Right here,' " al-Rumaihi recalled. The investors say months of pleading with Kwatinetz to implement changes yielded nothing, which is when, they say, things got weird.
Kwatinetz and Bannon had been friends and colleagues for years. Bannon was a partner at The Firm, the talent management company Kwatinetz ran until 2008. In May, commenting for an unrelated THR story, Kwatinetz described Bannon as "ridiculously smart." According to Henry, Kwatinetz shared this glowing appraisal with others at BIG3 throughout 2017, even after Bannon's dismissal from the Trump administration in August. "He talked about Bannon daily," says Henry. "He would bring up his name in multiple meetings and brag about their relationship." He says Kwatinetz often dined with Bannon and the staff of Breitbart.com, calling them "some of the smartest guys I know."
As the BIG3 dispute metastasized, Bannon, 64, was maneuvering on the fringes of the political world but remained focused on his core isolationist message. He became a vocal critic of Qatar, which has been the subject of an international blockade by its neighbors Saudi Arabia and the United Arab Emirates for its financial support of the Muslim Brotherhood in Egypt and Hamas in Gaza. Since his ouster from the White House, he had landed lucrative consulting gigs with Qatar's adversaries. In October, during a conference about the Middle East, Bannon said the Qatar blockade was "the single most important thing happening in the world."
Qatar was certainly about to become very important to BIG3, where the management was in crisis. Mason was dismissed in early 2018 after Kwatinetz alleged that he failed to participate in an internal investigation about conflicts of interests with investors. Mason responded with his own lawsuit alleging wrongful termination and defamation, blaming Kwatinetz for conducting a "sham" investigation. He accuses Kwatinetz of breach of fiduciary duty, mismanagement, improper financial transactions and creating a hostile work environment. According to Mason's legal filings, Kwatinetz also allegedly called some of the players in his own league "rich n—ers" (which Kwatinetz, through his lawyer, strongly denies; the suit has since moved to arbitration).
Henry was also having serious doubts. During a dinner one evening, Henry says Kwatinetz told him that "all Arabs were terrorists." Henry soon quit in disgust. "That was the beginning of the end for me," he says. In his resignation letter, Henry wrote, "I became very uncomfortable when you [Kwatinetz] began using rhetoric that weaponizes the heritage of the Trinity investors in order to damage their character." The dispute came to a head one afternoon when al-Rumaihi and Kwatinetz got into a minor physical altercation after a memorial service for a colleague. Kwatinetz once again asked for payment. "You know what we want," al-Rumaihi responded. "We want a real company. Deliver us the league that we all want." There was some shoving and finger-pointing. In legal documents, Kwatinetz later alleged that al-Rumaihi threatened his life. Al-Rumaihi denies this. But the damage was done. Within weeks the president, chief financial officer and chief creative officer would all be gone.
In April, BIG3, Kwatinetz and Ice Cube (under his legal name, O'Shea Jackson) filed a $1.2 billion defamation lawsuit against Sabi and al-Rumaihi. The suit named two other defendants: Sheikh Abdullah bin Mohammed bin Saud al Thani, the CEO of the Qatar Investment Authority, and Faisal al-Hamadi, QIA's head of asset management. In other words, the chief investment instrument of the Qatari government was, suddenly, involved in a lawsuit about an American basketball league. There was just one problem: According to Sabi and al-Rumaihi and public statements from the government of Qatar itself, Qatar had never been involved in BIG3. Al-Rumaihi and Sabi believe Bannon encouraged Kwatinetz to move forward with the suit regardless. Geragos calls such allegations "utterly false" and insists Qatar was involved. "We've got the paper trail to prove it," he claims.
In May, Kwatinetz filed an affidavit in federal court in which he laid out another startling claim. He alleges that during a hike in January, in the final weeks before the arbitration began, al-Rumaihi had asked for Kwatinetz's help getting access to Bannon. According to Kwatinetz, al-Rumaihi said Qatar was offering to "underwrite all of Bannon's political efforts in return for his support." Kwatinetz wrote that he was "offended" by the request and turned al-Rumaihi down. Kwatinetz went on to say that al-Rumaihi laughed at this and said, "Do you think Michael Flynn turned down our money?"
Al-Rumaihi, for his part, recollects the hike, on a steep trail in Topanga Canyon, but says no such conversation ever occurred. In fact, al-Rumaihi says that it was Kwatinetz who offered to introduce him to Bannon, saying the connection would be a "game changer" for the Qatari. "He refused to address his failed promises and mismanagement and he also repeated a recommendation he had made many times that we get Steve Bannon on the 'payroll' to assist Qatar," al-Rumaihi said. Henry says he doubts Kwatinetz's version of events. "The only time Ahmed talked about Bannon to me was in response to Jeff mentioning Bannon," he says.
Al-Rumaihi and Sabi believe that the defamation lawsuit is a gambit to smear the country. "It's a pure Bannon strategy," says al-Rumaihi. "You know, make me a stand-in for Qatar and then conduct an anti-Qatar smear campaign to try to put pressure on Sport Trinity in an effort to extort us. This is a concocted geopolitical play to divert the focus from their mismanagement." (Bannon didn't respond to a request for comment.)
Throughout the BIG3 ordeal, some strange bedfellows have emerged. After the defamation lawsuit was filed, Ice Cube took out an ad in The New York Times calling for Donald Trump to tell the emir of Qatar "not to threaten the BIG3 and American athletes." For al-Rumaihi, Sabi and many others, it was an abrupt about-face for Cube. "That's out of the playbook of the alt-right," says al-Rumaihi. "He went from fighting for justice to hanging out with Steve Bannon." Henry said recently the rapper has taken it one step further: "Ice Cube's been saying, "Don't talk to the players, don't tell anyone about why you left." Al-Rumaihi says he and Sabi will see the arbitration through. His attorneys believe the defamation case against them and Qatar is thin and have filed a motion to have it summarily dismissed. That decision is pending.
Whatever the outcome, if the BIG3 spat shows anything, it's that the lines between politics and entertainment are as blurred as ever.
This story first appeared in the June 6 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.