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BANNED: NOW WHAT?
April 29, 2014
By Anthony J. Fredella
NEW YORK, New York - NBA Commissioner Adam Silver has banned Los Angeles Clippers owner Donald Sterling for life from not only Clippers’ activities, but also all NBA functions and events. Commissioner Silver also imposed a $2.5M fine upon Sterling, which was the maximum amount allowed under the NBA Constitution, which is a confidential document. Silver provided further during his press conference this afternoon in midtown Manhattan that he would urge the NBA Board of Governors to force a sale by Sterling of his ownership in the Clippers.
So what does all of that mean? Well, for one thing, we will never see Sterling’s face sitting courtside at not only another Clippers’ game, but at any game or NBA event ever again. That’s pretty huge for a man who yearns for the L.A. limelight and seeks out the attention, whether negative or not, from the media. Next, his $1.9B wallet will be $2.5M lighter. Now while that is a drop in the bucket considering Sterling’s wealth, it is the highest fine permitted to be handed down by the league.
It is the last sanction that is potentially the most severe and the most troublesome. Silver provided that he will recommend to the league’s Board to urge a vote of the owners to have Sterling removed as owner of the Clippers through a forced sale. For that, there must be a 3/4 vote in favor by all of the owners. Numerous scenarios can develop from this. The first, and the most sought after, is that the owners will in fact vote in favor of forcing a sale of the Clippers. That would essentially solve all problems and issues that have arisen as a result of Sterlings’s racist and despicable remarks. No longer would Sterling be in any way involved with the NBA and, most importantly, he would never again earn a single dollar through the NBA’s business.
But what if the owners don’t vote in favor of the forced sale? Remember, they need 3/4 of all owners, or 22 of 29 teams, to vote that way. This vote has a direct impact on NBA ownership. Voting in favor of this drastic measure may someday affect another owner that voted in its favor. You cannot think that that is not on the minds of some other NBA owners. Dallas Mavericks’ owner Mark Cuban has already commented publicly that forcing Sterling out as an owner would be a “slippery slope.” And that is absolutely true.
So here is the key to the ownership vote: will it’s results be made available to the public, and I’m not talking about the overall “yes” or “no” results. I’m talking about the “owner by owner” results. If the results are to be made available afterwards it may directly affect how some owners, who may not have voted in favor of ousting Sterling, now do so as not to cast any speculation that they acquiesce in Sterling’s actions and comments. If it’s a closed door vote, you can bet that it will be closer than you think. While I believe that Sterling will ultimately be ousted, as the NBA is a very image-minded association, I do believe other owners will be thinking about their own ownership rights potentially being taken away down the road for some type of outrageous behavior that could be attributed to them.
If for some reason the vote ends in favor of Sterling retaining ownership, then he will effectively become an absentee owner of the Clippers – meaning that while he cannot attend games, events or functions, or participate in any way with the operations of the Clippers, he will still be able to collect the revenue coming through the doors. That is something that no one associated with the NBA wants, for obvious public image reasons, and that is why Sterling has seen his last days as the owner of the Los Angeles Clippers.
But here is something else to consider. Donald Sterling purchased the Clippers in 1981 for $12.5M. Today, estimated values of the franchise exceed $700M. Now if an ownership group came along and offered him that much, or somewhere in the vicinity, the sale would most likely go through and we’d be done and done with Donald. But given the circumstances, what if Sterling is only offered $550M, or $475M or something else below market value? Will he have the right to refuse those offers? Can he hold out for market value or, even worse, some astronomical valuation that he’ll never get so as to remain the owner during that time? Maybe. Remember this, Donald Sterling is a former lawyer and is very litigious. He loves to sue people, he gets sued often, and he’s no stranger to the court system. Given his vast wealth, I’m pretty confident he has the best legal team money can buy. That being the case, should Sterling be voted out, and forced to sell his franchise, you can bet it will not be an easy process and we’ll probably being seeing plenty of him in the news and on T.V. for some time to come. Lucky us.