‚Äč

Basketball / Sports

Lawsuits could be off the table under newly reported Sterling plan

SANTA ANA, Calif.--Many of those who closely followed Donald Sterling's 33-year ownership of the Los Angeles Clippers say they weren't that surprised when his voice surfaced on an audio recording making racist comments.

Or when Sterling, banned for life and fined $2.5 million by the NBA, said he refused to pay.

But news that the notoriously litigious Sterling might not fight the league's effort to force a sale of the Clippers? Now, that's a bombshell.

With her husband's blessing, Shelly Sterling has been given the authority to oversee a sale of the Clippers on her terms.

Shelly Sterling's terms, though, could include her retaining a minority share in the team, something the league hasn't supported to date.

In response to Shelly Sterling gaining control, the NBA issued a statement Friday saying the league isn't moving off its current path.

"We continue to follow the process set forth in the NBA Constitution regarding termination of the current ownership interests in the Los Angeles Clippers and are proceeding toward a hearing on this matter on June 3," the league said in a statement Friday.

On Monday, the NBA served Donald Sterling and his attorney, Maxwell Blecher, with a formal charge, laying out the case for ownership termination.

The league alleged Sterling "has taken discriminatory actions and supported discriminatory positions that have had (and will continue to have) a material adverse impact on the NBA and its teams."

The NBA also accused Sterling of destroying relevant evidence and providing misleading evidence during the NBA's investigation.

Sterling has until Tuesday to formally respond to the league's charge, and he can appear at the June 3 meeting of the NBA's Board of Governors. At that meeting, the league is expected to vote in favor of forcing a sale of the Clippers, something that can be accomplished with a three-fourths majority vote.

Earlier this week, NBA commissioner Adam Silver left the door open for a Sterling-controlled sale.

"Mr. Sterling still owns the Los Angeles Clippers. Mrs. Sterling, as I understand it, through a trust owns 50 percent of the team, as well," he said. "It is their team to sell, and so he knows what the league's point of view is, and so I'm sure if he wanted to sell the team on some reasonable timetable, I'd prefer he sell it than we go through this process."

E-mails to Sterling's attorney weren't returned.

David Spencer, partner and Managing Director of Sports Operations at Talent Resources, called Sterling's decision to hand over ownership to his wife "the first step in getting this ball rolling."

"In turn, appealing to regaining the sponsors they lost and going after new sponsors," Spencer said. "This is the first step in doing that."

If the NBA allows the Sterlings to sell rather than force a sale, the league could avoid a protracted legal battle. Whichever direction the sale takes, Gregory Nachtwey of the Berkeley Research Group doesn't believe there will be any "material impairment" from the turmoil because of the number of high-powered bidders and the size of the Los Angeles market.

Oprah Winfrey, Magic Johnson and David Geffen are among those who have said they are interested in buying the Clippers.

"There are so many people who want to buy an NBA franchise, therefore the impact from all the recent disclosures won't hurt the selling price," Nachtwey said.

Spencer said the Clippers' stock would rise with a well-known owner.

"I see the value of the team and the value of the sponsors much higher if you have someone like Magic Johnson behind the team as opposed to someone who doesn't have as much experience in sports management," Spencer said. "So that will play a big part in sponsorship position and whether to jump back on board."

Earlier this year, Forbes estimated the Clippers to be worth $600 million. Recent NBA team sales include the Milwaukee Bucks, sold four months ago for $550 million, and the Golden State Warriors, sold four years ago for $450 million.

Some estimates have placed the potential value of the Clippers at more than $1 billion, in part because of an expected bidding war when the team's local TV deal ends after the 2015-16 season. Darren Heitner, a Miami-based sports and entertainment lawyer, discounted estimates that ranged as high as $2 billion.

"Do I think $2 billion is reasonable? Not really. Feasible? Potentially," Heitner said. " ... It is such an interesting situation because based on all the attention this controversy has garnered and the fact there is this planned selling process it's become one of the most public auctions that I can remember."

A quick sale could alleviate a lot of the concerns voiced by league officials, Coach Doc Rivers and NBA players.

"I think the longer it lasts, the worse it'll be," Blake Griffin, the Clippers' All-Star forward, said last week. "I think something should happen, and it should happen quickly. I think guys need to make decisions. I don't think anybody wants this to drag out, you know, except for one or two people. I think it just needs to be swift.

"But at the same time, you do have to be patient. There is a due process that has to happen. I understand that. But, I don't want to keep answering questions about it."

During the team's postseason run, Rivers, who was bombarded with questions about the situation, said he wasn't sure it would be feasible for Shelly Sterling to retain her ownership.

"I think it would be a difficult situation because we would know who was really in charge," he said.

The NBA contends that the league constitution provides it with enough power to terminate Donald and Shelly Sterling as owners.

"Our position is once under the constitution, based on Mr. Sterling's conduct, if the owners ultimately decide that it's appropriate to terminate his franchise, the interest of all owners is terminated," Silver said.

(c)2014 The Orange County Register (Santa Ana, Calif.)

Visit The Orange County Register (Santa Ana, Calif.) at www.ocregister.com

Distributed by MCT Information Services


Comments

blog comments powered by Disqus