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LA Clippers likely to be sold as Donald Sterling’s future role in team is unclear

Shelly Sterling and former Microsoft CEO Steve Ballmer have come up with a deal for Ballmer to buy the Clippers for $2 billion

The future of the Los Angeles Clippers is a little clearer in a sea of complexities, despite the remaining possibility of court challenges.

Late last week, it was announced that Shelly Sterling and former Microsoft CEO Steve Ballmer came up with a deal for Ballmer to buy the team for $2 billion.

She own owns half of the Clippers and now controls the trust, which is owned by the Sterling family, because two neurologists claim her estranged husband, Donald Sterling, has dementia, according to news reports.

As a result of the deal, the National Basketball Association Board of Governors canceled a June 3 hearing that was scheduled in order to force Donald Sterling to sell the team. Instead, the NBA will vote at a later date on whether to approve the sale of the Clippers to Ballmer.

But Donald Sterling still plans to sue the NBA, and apparently will try to retain ownership of the team. His lawyers sued the NBA and Commissioner Adam Silver on Friday and are seeking over $1 billion in damages.

“The assertion that Donald Sterling lacks mental capacity is absurd,” Bobby Samini, an attorney representing Donald Sterling, told The Associated Press.

The AP says the lawsuit claims the NBA “violated Sterling’s constitutional rights by relying on information from an illegal recording that publicized racist remarks he made to a girlfriend. It also says the league committed a breach of contract by fining Sterling 2.5 million [dollars] and that it violated antitrust laws by forcing a sale.”

The complaint adds, "The punishment is capricious, arbitrary, unreasonable, and grossly discriminatory compared with similar 'speech' offenses,’… Sterling's punishment is far and away the most severe ever imposed by an NBA commissioner for any conduct."

It also attempts to end the lifetime ban imposed on Donald Sterling from being involved with the NBA and attempts to eliminate the fine.

It was also pointed out that Donald Sterling could file a case with the California Probate Court to regain his role with the family trust, news reports said.

Meanwhile, in a statement on Friday the NBA said Shelly Sterling and The Sterling Family Trust had “resolved their dispute over the ownership of the Los Angeles Clippers.”

“Under the agreement, the Clippers will be sold to Steve Ballmer, pending approval by the NBA Board of Governors, and the NBA will withdraw its pending charge to terminate the Sterlings’ ownership of the team,” the statement said.

The NBA statement also stated that NBA Commissioner Adam Silver “has consistently said the preferred outcome to the Clippers proceeding would be a voluntary sale of the team.”

It was also announced by the NBA that Shelly Sterling and The Sterling Family Trust had “agreed not to sue the NBA and to indemnify the NBA against lawsuits from others, including Donald Sterling.”

As a result, Shelly Sterling will apparently protect the NBA from “financial losses it could suffer in a lawsuit by her husband,” Yahoo Sports explained.

In addition, Sterling's lawsuit claims the NBA violated federal antitrust law, which would mean, if successful, he would get treble damages, InsideCounsel reported.

Michael McCann, founding director of the Sports and Entertainment Law Institute at the University of New Hampshire School of Law, further explained in an article in Sports Illustrated, “Indemnification is an important instrument in law, and here could be worth billions of dollars to the NBA. It entails a contract between two parties in which one party (here Shelly Sterling and the trust) agree to pay for legal fees and potential damages suffered by the other party (the NBA).”

The NBA, meanwhile, found the Sterling lawsuit without merit.

“Mr. Sterling’s lawsuit is predictable, but entirely baseless,” NBA general counsel Rick Buchanan was quoted by the news media. “Among other infirmities, there was no ’forced sale’ of his team by the NBA — which means his antitrust and conversion claims are completely invalid. Since it was his wife Shelly Sterling, and not the NBA, that has entered into an agreement to sell the Clippers, Mr. Sterling is complaining about a set of facts that doesn’t even exist.”

There is also the possibility the NBA could try to get the lawsuit tossed out of court.

"If Donald Sterling doesn't voluntarily dismiss the lawsuit, then the NBA will file a motion to dismiss because there's absolutely no claim here," Gabe Feldman, director of the sports law program at Tulane University, told The Los Angeles Times. "I wish I could find a word to describe how strange it is. We've gone from uncharted territory to ludicrous territory at this point."

Also, if it is seen that "involuntary conversion" statute is invoked in a sale, the Sterlings could avoid paying capital gains tax on the $2-billion price tag, the LA Times reported.

 

Further reading:

 

NBA players support Silver’s ‘Sterling’ decision, but litigation may follow

NBA moving forward in efforts to remove the Sterlings as owners of the Clippers

Parsons becomes LA Clippers interim CEO, Shelly Sterling prepared to fight for ownership of team

 

 

 

Contributing Author

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Ed Silverstein

Ed Silverstein is a veteran writer and editor for magazines, websites and newspapers. A graduate of Harvard's Kennedy School of Government, he has won several...

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