The power forward, who played with the team for 10 years, was causing a disturbance while in the audience of a game between the Knicks and the Los Angeles Clippers, according to police. The scuffle caused a temporary stop in the game as the players watched, a video posted to Twitter shows.
Oakley, 53, refused to leave the Garden and punched three male employees during a brief melee, an NYPD spokeswoman said.
He was taken into custody at 8:30 p.m. and is currently being held at the Midtown South Precinct, with charges pending, police said.
Video from the game shows Oakley involved in a verbal dispute with a group of men — getting in one man's face before shoving it with his hand. He also shoved another unidentified man before he was escorted out of MSG by security guards.
Soooooo Charles Oakley just got into a fight at he Knicks game. pic.twitter.com/klZBD89VI7— Ian Schafer (@ischafer) February 9, 2017
Oakley reportedly tried "going after" Knicks owner James Dolan, which is why security asked him to leave.
The Twitter account of the team's public relations office confirmed the incident, saying he acted in a "highly inappropriate manner and abusive manner."
Oakley told the Daily News late Wednesday night that he was not going after Dolan.
"I was there for four minutes," Oakley told the paper. "I didn't say anything to him. I swear on my mother. They wanted to know why I was sitting there. I bought the ticket. I said why do you guys keep staring at me. Then they asked me to leave. And I said I'm not leaving."
There is a history of bad blood between Oakley and Dolan, according to sources and news reports.
Oakley has lobbied for years to be a goodwill ambassador for the team, like other Knicks greats such as John Starks and Allan Houston, but has been rebuffed, sources said.
Last year, Oakley tried to attend a game at the Garden with a ticket and tried to enter the arena through the employees' entrance, sources said.
Garden security workers stopped him from entering and called to their managers to see if they should allow him to enter, sources said. The guards were told not to let him in by Garden management.
He was eventually allowed into the stadium.
The New York Times reported on Oakley's exile from the Knicks last year.
On Thursday, the reporter for that story, Scott Cacciola, tweeted that Oakley has to buy his own tickets to games he attends and that Dolan must be informed whenever he's there.
1/ Oakley told me in November that he goes to 3-4 Knicks games a year. Always acquires his own ticket...— Scott Cacciola (@ScottCacciola) February 9, 2017
2/ Referring to Dolan, Oakley told me in November: "Everytime I walk in the Garden, they got to let him know, 'Oakley in the building.' "— Scott Cacciola (@ScottCacciola) February 9, 2017
3/ Oakley also told me he was approached by three Garden security guards at a game last season. This was not his first such interaction.— Scott Cacciola (@ScottCacciola) February 9, 2017