NBA Commissioner Adam Silver banned Los Angeles Clippers owner Donald Sterling for life from the league and fined him the maximum $2.5 million. Owners have the authority, subject to a vote of 3/4 of the owners, to force Sterling to sell the team.
But it might not be that simple.
By now, the court of public opinion has judged the comments made by Sterling, a billionaire real estate developer who is considered one of the worst owners in professional sports, harshly. Talk radio blared with calls to kick him out of the NBA. Many players and coaches wanted the same outcome.
Although Silver alone lacks the authority to force a sale, the other owners could make that happen if 75 percent agree. Silver technically works for Sterling and the other NBA owners, and there’s nothing in the NBA bylaws that give Silver alone the power to force one of his employers to sell their interest in the league.
Sterling, a lawyer by training, could also fight back against the NBA. He has yet to confirm that his voice is on the tape, although Silver claimed in a press conference today that Sterling's voice was in fact on the tape allegedly made by his girlfriend V. Stiviano. Sterling could also challenge the legitimacy of the recording if it was made without his knowledge, a violation of California criminal statutes.
This means that Sterling could argue that the recording should never have been released, as it is part of a criminal conspiracy. The NBA also does not have the power to compel TMZ, the website where the audio first appeared, to hand over the tape. This might make it impossible for the league to determine if Sterling is on the tape, or if the tape was altered.
Michael McCann, founding director of the Sports and Entertainment Law Institute at the University of New Hampshire School of Law, says Sterling could make things really ugly with a lawsuit against the league and his fellow owners.
“The NBA must also be concerned about the possibility of Sterling suing the NBA and owners, such as for breach of the Clippers franchise agreement or for violations of federal and state antitrust law,” McCann writes on SI.com. “A potential antitrust claim by Sterling against the NBA would be that his competitors (other NBA owners) and the NBA have conspired to expel him. By doing so, the logic goes, Sterling would have to sell his team at less than market value because prospective buyers would know that Sterling "has to" sell. As a result, he would attract lower bids.
There has also been speculation about a boycott by the Clippers, but even that move would backfire against the players. If they were to sit out a game, they would be in violation of their employment contracts and suspended and fined. The NBA would also have to refund tickets.
The other thing the league has going for it against Sterling – other than public opinion - is a loss of advertisers. Companies like Mercedes Benz, CarMax, State Farm, Virginia America, and Red Bull are among those that have already canceled their advertising schedules with the Clippers.
These losses, combined with the public backlash, are bad for the team. But it’s important to keep in mind that Sterling bought the team for just $12 million in 1981. It’s now valued at $700 million, so Sterling can afford to take a hit and still make a sizable profit.
Even if the team does lose value quickly, Sterling has a reputation of being a shrewd businessman who doesn’t walk away from a fight. If he wants to, he can be a thorn in the league’s side for years to come.
And one influential owner has already said that kicking Sterling out of the league was too harsh an action.
“In no uncertain terms am I supporting what Donald Sterling said, or his position. He's obviously racist, he's obviously bigoted,” outspoken Dallas Mavericks owner Mark Cuban said in an interview with The New York Daily News.
“But regardless of your background, regardless of the history they have, if we're taking something somebody said in their home and we're trying to turn it into something that leads to you being forced to divest property in any way, shape or form, that's not the United States of America. I don't want to be part of that."
Updated at 2:28 pm April 29, 2014.
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