The film director on Sunday called the Oakley incident "insanity" and questioned owner James Dolan's decision to suggest Oakley had a drinking problem.
"I mean, how can you say somebody is an alcoholic? You just can't, in my opinion," Lee, speaking to a small group of reporters, said Sunday at Madison Square Garden while wearing an Oakley jersey. "And even if the person was, why would you say that? I don't know why you would say that. All I can do is wear my jersey."
Oakley was ejected from the arena and arrested Wednesday night after a scuffle with security.
The Knicks said Oakley was behaving in an abusive manner toward security. Oakley denied it.
Dolan has banned Oakley from the arena indefinitely.
Lee, a lifelong Knicks fans, believes that the Knicks' treatment of Oakley -- coupled with Phil Jackson's direct and indirect criticisms of star Carmelo Anthony -- will hurt their recruitment of free agents.
"Who's gonna come here?" Lee said. Earlier in the week, when asked to pick a side in the Jackson-Anthony feud, Lee told Tencent-ESPN that he'd help Jackson pack his bags.