SBD/June 9, 2014/Franchises

Sterling Re-Brandishes Threat To Sue NBA After Silver Declines To Rescind Punishments

Donald Sterling agreed to drop the suit and sell the Clippers last week
Max Blecher, the attorney for Clippers Owner Donald Sterling, last night indicated that Sterling is now "considering going ahead with his lawsuit against the NBA" in the wake of comments made by Commissioner Adam Silver prior to Game 2 of the NBA Finals last night regarding Sterling's lifetime ban and $2.5M fine, according to Brian Costa of the WALL STREET JOURNAL. Blecher last week had said that his client "agreed to drop the lawsuit and sell the team to former Microsoft CEO Steve Ballmer." But Blecher last night wrote this agreement was "based on an understanding which the NBA acknowledges was reasonable" that Sterling's lifetime ban and $2.5M fine be rescinded. Silver at a press conference said, "There is absolutely no possibility that the lifetime ban will be rescinded or that the fine will be changed in any way." Blecher wrote as a result, Sterling is "ruminating" going ahead with the lawsuit and added to his knowledge, no decision "has yet been made." NBA Exec VP/Communications Mike Bass said, "There was never a discussion involving the NBA in which we would modify Mr. Sterling's penalty in any way whatsoever. Any suggestion otherwise is complete fabrication" (WSJ.com, 6/9). USA TODAY's Jeff Zillgitt reports Silver hopes that league owners "can vote on approving the sale" to Ballmer in mid-July, but added that it "could happen before then." Still, issues "remain before the league can approve the sale to Ballmer. Silver said that Donald and Rochelle Sterling "have their issues to resolve before the sale can be approved." While steps are "required before Ballmer becomes owner of the team, Silver does not anticipate a situation where the league would need to reschedule the termination hearing." Silver added that Ballmer "plans to bring in other investors once the sale is complete" (USA TODAY, 6/9). Silver reiterated that Rochelle Sterling's position is one in which she "does not need her husband's approval to sell the Clippers because she became sole trustee of the trust that controls the team when medical experts found Donald Sterling mentally unfit." Silver said that she "remains free to attend Clippers games ... but will have no other future role with the team" (L.A. TIMES, 6/9).

ROCHELLE'S FUTURE
: In L.A., Rainey & Bresnahan cited sources as saying that Rochelle Sterling decided to sell the team last week in part because of a "novel arrangement that will make her 'owner emeritus' and fund a major foundation to serve the poor, minorities and battered spouses." She would "maintain a significant presence with the franchise, even though she is giving up her 50% stake." The new foundation would "be created and funded by the Clippers organization, with some of the details of the arrangement still to be finalized." She "is expected to become co-executive director of the organization, which does not yet have a name, along with Ballmer" (L.A. TIMES, 6/8). The AP's Tami Abdollah cited sources as saying that terms of the Clippers sale to Ballmer allow for up to 10% of the team -- or $200M -- to "be spun off into a charitable foundation that Shelly Sterling would essentially run." The idea "to allow Shelly to continue some role was floated early on by her attorney, Pierce O'Donnell ... and it was enthusiastically agreed to by the NBA." The NBA "made clear she wouldn't be involved with the basketball franchise" (AP, 6/7). However, Silver last night reiterated that she "will not own any stake in the Clippers and any charitable foundation she starts with profits from the sale will not be associated with the Clippers" (USA TODAY, 6/9).

BEHIND THE SALE: Ballmer said that Rochelle Sterling "seemed bittersweet about selling the basketball team but determined to see it go to a worthy successor." In L.A., James Rainey reported Ballmer "was charmed by her fervor for the Clippers." The day after Ballmer originally met with her, Lakers investor Patrick Soon-Shiong "visited the Sterling home." Former NBAer Grant Hill and Ares Management Chair & CEO Tony Ressler "had to wait their turn outside." One of the participants said, "It was like speed dating. I'm sure it was exhilarating to her to have the undivided attention of all these very important people." Those who visited "agreed: Shelly Sterling seemed calm and in control" (L.A. TIMES, 6/8).

AVOIDING A PRECEDENT: In S.F., Bruce Jenkins wrote Silver's "hasty and brilliant strategy was so crucial" because the Sterling issue "never came down to a vote of his fellow owners." They "didn't want to be the executioners, setting a dangerous precedent and opening windows of scrutiny into their own affairs." To say the "least, some of them are very relieved" (S.F. CHRONICLE, 6/8).
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