There have been scores of pro sports players in NA busted with illegal drugs (prescription or not). As far as I know, no one has ever had their guaranteed contract terminated. I have to think this doesn't survive the appeal and arbitration processes. I read on another site that if the Kings lose the arbitration, then they still have to pay Richards but aren't on the hook capwise (other than the 1.2/year termination amount). I guess that is a win win for everyone.
If I was wearing a tinfoil hat I might think that all parties planned this out together.
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