SBD/May 1, 2014/Franchises

NBA Deciding How To Proceed With Sterling Vote, Seems Destined For Court Battle

Sterling is expected to file an injunction to stop the NBA
The NBA advisory/finance committee, consisting of 10 owners, today "will hold a conference call" to determine "what to do now" in order to vote out Clippers Owner Donald Sterling, according to Mike Bresnahan of the L.A. TIMES. All 30 owners "aren't scheduled to meet until a regular mid-July gathering, but a resolution over Sterling is expected well before then, with a vote in a to-be-determined manner" (L.A. TIMES, 5/1). USA TODAY's Jeff Zillgitt writes the league's owners in a "best-case scenario" could "vote to remove Sterling and force him to sell the team in mid-May." But Sterling is "expected to throw up a roadblock, filing an injunction to stop the NBA." One possible route Sterling could take is "claiming an antitrust violation and saying the NBA is trying to undermine the value of his franchise and injure the competitive process of the league" (USA TODAY, 5/1).

DOES THE CASE HOLD WATER? In L.A., Wharton & Pfeifer cite legal experts as saying that if Sterling "decides to fight back, the resulting litigation could drag on for years and set a precedent for American professional sports." The courts will find "little or no precedent for a team owner facing expulsion because of offensive comments about race." New Hampshire School of Law professor Michael McCann said, "We're in uncharted territory." The team is "owned by the Sterling Trust, which includes Sterling, his estranged wife, Rochelle, and two living children." A Clippers spokesperson "did not provide percentages of voting rights or other details." Sterling "could be motivated to hang on to the team if only for tax reasons," as one predicted that if Sterling were to sell at an estimated $1B, "capital gains and state taxes could exceed" $360M. Wharton & Pfeifer note a large share of those taxes "could be avoided if the owner bequeaths the franchise to his family upon death." Sterling's lawyers would have to "show that their client faced irreparable harm from a forced sale" and "present a case that has substantial likelihood of success at trial" before any injunction could be issued. N.Y.-based Foley & Lardner attorney Irwin Raij said that an injunction would "place the team under the management and control" of NBA Commissioner Adam Silver "until the legal dispute is resolved." Wharton & Pfeifer note if Sterling "subsequently filed an antitrust suit, he would have to prove the league's other 29 owners conspired to oust him in an anticompetitive manner, forcing him to sell his team at below-market value." McCann said that a breach-of-contract suit would "require showing that the league misinterpreted or did not follow its own bylaws" (L.A. TIMES, 5/1).

SEE YOU IN COURT: In N.Y., Armstrong, Madden & Thompson cite a source as saying that Sterling "won’t go down without a fight" and will "sue the league if the other 29 owners vote to force him to sell." Source: "He is not going to sell the team. ... He'll sue and it'll take years to settle" (N.Y. DAILY NEWS, 5/1). Also in N.Y., Kerber & Kosman cite a source as saying that Sterling will work with Clippers General Counsel Robert Platt to "fight the NBA."  Source: "I think it will be one last-ditch effort for both billionaire Sterling and millionaire Platt" (N.Y. POST, 5/1).

VOTE COUNT: YAHOO SPORTS' Marc Spears reported the NBA is "expecting the decision" to force Sterling to sell the Clippers to "be unanimous" among the league's owners (SPORTS.YAHOO.com, 4/30). ESPN's Mike Greenberg said, "No owner, even if he didn’t agree with this, is going to vote in the opposite direction. Then in my opinion, there’s no reason not to just go ahead and make it public for the public relations' sake" ("Mike & Mike," ESPN Radio, 5/1). The L.A. TIMES' Bresnahan writes the "symbolic question would be whether the Clippers themselves could vote not to sell." Bresnahan: "Who casts the Clippers' vote?" A source said that it is "not Sterling." It will be "either President Andy Roeser or Coach Doc Rivers" (L.A. TIMES, 5/1). Hawks Managing Partner Bruce Levenson: "There is a process, and assuming that process is followed properly and the allegations prove to be true, I would vote yes" (ATLANTA JOURNAL-CONSTITUTION, 5/1). Heat F LeBron James said of Silver's ruling, "The job is still not done. It's a win, but we still need the owners to do their part." ESPN.com's Darren Rovell reported that the NBA has "requested that owners and senior management not make any further public comments about the Clippers and the ownership situation." James: "I've seen some of the owners come out and say they're in favor of the decision Adam Silver made. But it's not all of them. We need three-fourths of them, and I've only seen, like, three or four of them comment. So we need more than three or four" (ESPN.com, 4/30). 

FREEDOM OF EXPRESSION? SLATE's Mike Pesca wrote the process of forcing Sterling to sell "does raise some troubling issues." A private citizen "whose private thoughts were audio-taped (perhaps illegally) has been told he can no longer own his private property because of the thoughts that were revealed on that tape." These thoughts were "loathsome to be sure, but didn’t advocate anything illegal and didn’t call for any violent or even literally hurtful actions" (SLATE.com, 4/29). In San Antonio, Tom Orsborn reports Mavericks Owner Mark Cuban yesterday "lamented the 'lack of privacy' in America," specifically in reference to the Sterling scandal. Cuban: "If you just completely put aside the NBA, everybody's life has been changed. You don't have privacy." Cuban also "declined to say how he would vote in the Sterling matter." Cuban: "I looked at a picture of my house and saw it was made out of a whole lot of glass, so I don't have anything else to say" (DALLASNEWS.COM, 4/30). In Orlando, Mike Bianchi asks if Magic Owner Rich DeVos might be "the next owner to be scrutinized for a stance that is considered biased and bigoted by some." CNN was in Orlando this week "working on a story about DeVos and his strong stance against gay marriage." Bianchi: "How does the NBA decide what an owner can and can't say or do?" (ORLANDO SENTINEL, 5/1).
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