In a courtroom version of a New York Knicks lowlight reel, NBA icon and head coach Isiah Thomas privately ridicules white season ticket holders. Owner James Dolan obsesses over the skimpy costumes of the team’s dancers. Star guard Stephon Marbury seduces an intern.

The allegations portraying the once-storied franchise as a dysfunctional frat house were recounted at a sexual harassment trial in federal court in Manhattan. The often-salacious details came in the first three days of the trial, which continues next week with the promise of more to come.

The case, stemming from a $10 million lawsuit brought by a fired team vice president, Anucha Sanders, quickly became a public relations disaster for a team struggling to regain respectability after a three-season playoff drought. The spectacle also has raised questions about why the front office couldn’t work out a face-saving settlement.

“I’m quite frankly stunned that they didn’t settle it,” an attorney specializing in sexual harassment litigation for the Manhattan firm Cullen and Dykman, James G. Ryan, said.

Testimony this week about Marbury’s alleged encounter with the intern resulted in front-page headlines — “LURED INTO MY LIMO” — and photos of him flashing a goofy grin and sticking out his tongue while leaving the courthouse in a Rolls-Royce. Sports columnists have enjoyed a field day as well.

Though the case still “has a chance of being settled before it gets too embarrassing, Dolan has already lost,” Dave D’Alessandro of The Star-Ledger in Newark wrote. “It is one thing to run a company badly, but it is another thing to subject a publicly traded company to three weeks of public ridicule, and having its name dragged through the tabloid muck.”

Things could get even uglier when a cross-examination of Sanders continues next week followed by possible testimony by Thomas, Dolan, and even the intern.

“Everything in this woman’s life is going to be exposed for credibility purposes,” Ryan said of Browne Sanders. “The same thing will happen with Isiah Thomas.”

The trial is expected to last another two weeks, meaning a verdict could come just before the Knicks open their training camp for the 2007-08 season.

Lawyers from both sides have declined to discuss what went wrong in settlement talks. The failure means a jury of five women and three men must decode conflicting stories before determining whether Sanders deserves damages of least $10 million based on her claim that she was fired for daring to accuse Thomas of harassment.

Sanders, 44, already has spent several hours on the witness stand offering a poised account of her rise from a former Northwestern basketball star to her “dream job” as vice president in charge of marketing for the Knicks.

Thomas, flanked at the defense table by two female lawyers, has listened to Sanders repeatedly intone “bitch” and “ho” — slurs she alleges he used to address her when complaining about her attempts to involve him in promotions.

“Bitch, I don’t give a (expletive) about these white people,” she claimed he said in one conversation about season ticket holders. Thomas, through his lawyers, has called the allegations “outrageous.”

She said Thomas suddenly developed a crush after the pair challenged each other to a basketball shooting contest at a Christmas party. “I let you win,” she said she teased afterward.

Soon, she said, he was professing his love and demanding private time “off site.” She claimed another Knicks boss told her to put up with it.

Sanders said Dolan, the chairman of Madison Square Garden, had other concerns — like the Knicks City Dancers. At meetings about the dance squad, Dolan “was very opinionated,” she said, even offering “feedback on what they were wearing.”

Dolan, she added, “was easily agitated and we all knew it. He would yell, and we just became pretty accustomed to that.”

Asked about Marbury and the MSG intern, Sanders said the woman told her about a drunken April 2005 outing to a Manhattan strip club with Marbury. The intern claimed that afterward Marbury lured her into his truck for sex, she testified.

Marbury later took the witness stand, called by the plaintiff to try to establish that management didn’t take sexual misconduct seriously. In his testimony, Marbury called Thomas his “mentor” and the sexual harassment case a “joke.” When questioned about claims his coach insulted Sanders, he kept replying, “Not his persona,” before the judge ordered to simply answer, “Yes” or “No.”

Asked about the intern, he admitted driving up and asking her, “Are you going to get in the truck?'” He said she answered, “Yes.”

At that point, the judge cut off the questioning.