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SBD/July 23, 2014/Franchises
Sterling Files Another Suit To Block Clippers Sale As Parsons Warns Of "Death Spiral"
Published July 23, 2014
LANGUAGE OF THE LAWSUIT: Shelly Sterling's attorney Pierce O'Donnell called Donald Sterling's latest lawsuit a "frivolous, last-ditch act of desperation by a delusional, bitter man" who is "obsessed with ruining" the sale of the team. In L.A., Shelburne & Markazi note it "is not known whether the probate-court judge will seek to consolidate Tuesday's lawsuit with the current trial" (ESPNLA.com, 7/23). Donald Sterling's new complaint reads in part, "(Shelly) is attempting to usurp (Donald's) interest in LAC by unilaterally selling LAC's shares to Ballmer. (Shelly's) unilateral attempt at the sale of LAC shares to Ballmer is without the consent of the sole shareholder of record (Donald) or the board of directors of LAC. The sole shareholder of record was denied the right to sell his shares. As the sole shareholder, (Donald) retained the right to withhold his shares and refused to sell the team to Ballmer" (USA TODAY, 7/23). In California, Kelly Puente notes closing arguments "are set for Monday" (ORANGE COUNTY REGISTER, 7/23).
THE "DEATH SPIRAL" DETAILED: Parsons said that while the Clippers' ticket revenue was "essentially the same as the past season's, many of the team's 20 or so sponsors have made it clear they want to continue a relationship with the team only if Sterling is replaced as owner." Parsons said sponsors such as Mandalay Bay and Kia Motors are "sitting at the edge of the pool and don't want to go in the water unless there is resolution" on the ownership situation. But he added that only six or seven sponsors "had explicitly asked to be disassociated" from the team following Donald Sterling's controversial comments. ESPN L.A.'s Shelburne reported the Clippers "gave the remaining two-thirds 'a holiday' before they felt compelled to disassociate from the franchise." Parsons: "If none of your sponsors want to sponsor you, your coach doesn't want to coach you and players don't want to play for you, what do you have?" Parsons and Bank of America's Anwar Zakkour testified that the $2B price Ballmer agreed to pay for the franchise "was much higher than the team's revenues justified under the most aggressive and optimistic predictions." Zakkour, who helped conduct the sale, added, "Whether you want to call it a slam dunk or a home run, none of us believed we would get to the $2 billion." Zakkour warned that if the sale "fell through and the NBA restarted termination proceedings, there was significant risk the franchise would sell for far less" (ESPNLA.com, 7/22). Parsons testified that ticket sales are "holding steady thanks to excitement over last season, but that fans could still revolt." He added that he has "seen emails from fans saying they don’t want any of their money going to the Sterling family" (N.Y. DAILY NEWS, 7/23).
WHAT'S UP, DOC? ESPN L.A.' s Markazi wrote Rivers "isn’t just the team’s coach and president; he’s its heart and soul." Rivers is the "calming presence that kept the team afloat when it was rocked by the tsunami that was the Sterling controversy during the playoffs." He "not only did his best to shield his players from outside distractions, but he also put his arms around tearful employees and told everyone in the organization -- players to receptionists -- to call him with any problems." Rivers "didn’t come to Los Angeles to be the team’s leader, but when it needed one, he stepped up to the challenge" (ESPNLA.com, 7/22).