When Adam Silver was growing up in Westchester County, NY, he was a fan of the many pro basketball players, particularly those on the New York Knicks. This week, National Basketball Association (NBA) players have returned the admiration for the new commissioner after he announced a far-reaching decision on the future of Clippers owner Donald Sterling.
With players, fans, many sponsors and apparently the key owners of other teams disgusted with Sterling’s racist comments, Silver ordered a lifetime ban on the veteran owner. Silver is also using all of his powers to encourage that the NBA toss Sterling out as an owner, and Silver imposed the maximum fine on Sterling: $2.5 million.
“The views expressed by Mr. Sterling are deeply offensive and harmful; that they came from an NBA owner only heightens the damage and my personal outrage,” Silver said during a Tuesday afternoon press conference.
Silver, who was until recently an NBA executive, previously worked for Cravath, Swaine & Moore, so he is familiar with the judicial process.
But what lies ahead could be a protracted legal battle, especially given the fact that Sterling, himself a former practicing attorney, seems to like to use the court system to his advantage. He said on Tuesday that his team is not for sale.
Sterling has battled court cases before – such as allegations that he was racist toward minorities in his housing properties, or allegations against him by Elgin Baylor, who was executive vice president and general manager of the Clippers from 1986 to 2008.
In addition, Sterling sued the NBA after it fined him for relocating the Clippers to Los Angeles – which led to the amount he had to pay going from $25 million to $6 million.
“My guess is he [Sterling] will not be accepting this penalty,” Robert Boland, chair of Sports Management at New York University and a sports attorney who has represented coaches and managers, said in an interview with InsideCounsel on Tuesday.
Boland suspects that in a courtroom setting Sterling could argue that the conversation that revealed his racism was a private one between him and a second person. Given that it was private, the lifetime ban could be argued as being excessive.
His side could argue that a suspension would be understandable, but does his private conversation deserve him losing his business? In addition, they could likely argue the lifetime ban was unprecedented, arbitrary and capricious – and amounts to a “group boycott of NBA owners” of him, Boland speculated. Sterling could argue, too, there was an effort to reduce the value of his team. Such a case would most likely cite antitrust laws, which would allow him to seek treble damages, Boland said. In fact, Boland estimates that three-quarters of all sports claims throw in antitrust issues.
Also, it is clearly to Sterling’s advantage to use the courts, rather than opt for some kind of league arbitration so he can make these kinds of legal arguments, Boland adds.
From the other owners’ perspectives, they may worry that what is done to Sterling could come back to haunt them in some future incident. Another issue is that the NBA owners may not be too eager to cover the costs of defending such a lawsuit, which Boland predicts could be “very expensive” – especially since Sterling “has deep pockets” and is fighting for a personal “asset.” The team has been valued by some observers as high as a billion dollars to about $575 million.
“I’m surprised it was a lifetime ban,” Boland confirmed during the interview, adding he was also “surprised how bold the action was.”
On the other hand, Boland said that Silver needed to send a “clear message” about the comments made during the conversation, which was released to the public by TMZ.
Looking ahead, Boland says the NBA may try to buy Sterling out or force the sale of the Clippers if there is a three-quarters supportive vote of the other owners.
One other option is that Sterling’s estranged wife, Shelly, may try to get control over the franchise. Or Sterling may try to put another relative in control of the team, though the NBA likely will have to approve of the new owner.
Meanwhile, positive comments about Silver and against Sterling began streaming in on Tuesday.
"I hope that every bigot in this country sees what happened to Mr. Sterling and recognizes that if he can fall, so can you," Sacramento Mayor Kevin Johnson, a former NBA player who represented the NBA players union during the controversy, was quoted by the news media.
"Today the players believe the commissioner has done his duty," Johnson added. "On this day, Adam Silver is not only the owners’ commissioner; he is the players’ commissioner.”
Earlier this week, veteran sports law professional Robert Wallace told InsideCounsel, “An owner is not going to be able to make these kinds of statements without some consequences.”
It is noteworthy, Sterling did not challenge the authenticity of the tapes of the racist conversation with his then-girlfriend, and the incident was investigated by a lawyer used by the NBA, David B. Anders of Wachtell Lipton, Rosen & Katz. He advises clients on internal investigations, corporate governance and compliance reviews – and formerly was an assistant United States Attorney for the Southern District of New York.