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FILE - In this July 10, 2013, file photo, Atlanta Hawks general manager Danny Ferry speaks at a press conference in Atlanta.

David Goldman/AP

The fallout from racially charged comments by Atlanta Hawks' leadership continued on Tuesday as general manager Danny Ferry was disciplined for making inflammatory remarks about Luol Deng.

Hawks CEO Steve Koonin has imposed undisclosed discipline on Ferry for comments the GM made to the ownership group in June when the team pursued Deng as a free agent.

Atlanta media outlets obtained a letter Monday night from Hawks co-owner Michael Gearon Jr. which cites Ferry telling the ownership group that Deng "has a little African in him."

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Gearon's letter on June 12 to co-owner Bruce Levenson said Ferry went on to say, "Not in a bad way, but he's like a guy who would have a nice store out front and sell you counterfeit stuff out of the back."

Added Gearon: "Ferry completed the racial slur by describing the player (and impliedly all persons of African descent) as a two-faced liar and cheat."

Deng, 29, was born in what is now South Sudan. His father moved his family to Egypt and then England. The 10-year NBA veteran is now a British citizen and played for England in the 2012 Olympics.

Deng, like Ferry, also played at Duke.

In his letter, Gearon recommended that Ferry resign or be fired.

He warned Levenson he believed Ferry's comments "could be fatal to the franchise" if made public.

Gearon said he and the other co-owners "were appalled that anyone would make such a racist slur under any circumstance, much less the GM of an NBA franchise on a major conference call."

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Gearon declined to comment when contacted by The Associated Press on Tuesday and Deng's agent, Ron Shade, could not be immediately reached.

Hawks spokesman Garin Narain said the team's investigation of Ferry's comments uncovered a racially inflammatory email written two years ago by Levenson. That discovery led to Levenson's announcement Sunday that he will sell his controlling share of the team.

Ferry apologized Tuesday but said he was only repeating what he had heard about Deng.

"In regards to the insensitive remarks that were used during our due diligence process, I was repeating comments that were gathered from numerous sources during background conversations and scouting about different players," Ferry said in a statement released by the team.

"I repeated those comments during a telephone conversation reviewing the draft and free agency process. Those words do not reflect my views, or words that I would use to describe an individual and I certainly regret it. I apologize to those I offended and to Luol, who I reached out to Monday morning."

Koonin has agreed to meet with Atlanta civil rights leaders on Wednesday. The Rev. Markel Hutchins said Monday he asked for the meeting to discuss what he believes is a racist attitude throughout the organization.

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In his letter to Levenson, Gearon compared Ferry's remarks to racist comments which forced Donald Sterling to sell the Clippers.

"We believe these comments by Ferry were far worse than Sterling's because they were not from a private personal conversation — they were in a business environment on a business matter in front of a dozen or more people," Gearon wrote. "If Ferry would make such a slur in a semi-public forum, we can only imagine what he has said in smaller groups or to individuals."

Gearon also said in the letter that he wanted to point out Ferry's comments to Levenson because he wasn't sure Levenson was listening to the full conference call. Gearon said his belief, confirmed by his consultations with two attorneys, was the fallout from Ferry's comments could be "devastating."

Ferry was named the Hawks' general manager in 2012. He came to Atlanta after two years as vice-president of basketball operations for the San Antonio Spurs. As general manager for the Cleveland Cavaliers from 2005-2010, Ferry helped build a team that advanced to the 2007 NBA Finals.

There was renewed optimism about the direction of the team after Ferry hired coach Mike Budenholzer from San Antonio in 2013 and Budenholzer began to implement the Spurs' system. Despite losing centre Al Horford to a season-ending injury, the Hawks made the playoffs and lost to Indiana in a competitive first-round series.

The turmoil resulting from the inflammatory comments from Ferry and Levenson threatens to derail any momentum gained last season. New ownership must be found, and Ferry's ability to survive the crisis is unknown.

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One key issue Ferry now must address: Can he draw interest from future free agents?

In his letter of apology, Ferry pledged he would learn from the incident.

"I am committed to learning from this and deeply regret this situation," Ferry said. "I fully understand we have work to do in order to help us create a better organization; one that our players and fans will be proud of, on and off the court, and that is where my focus is moving forward."

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