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Report: Clippers’ Donald Sterling to sue NBA to block forced sale of team

May 2, 2014, 3:12 PM EDT

Donald Sterling Donald Sterling

Everyone around the NBA expects this day is coming.

Donald Sterling is a litigious man and one who does not give up his holdings easily. When NBA Commissioner Adam Silver walked to the podium and brought the hammer down on Sterling for his racist comments — a lifetime ban, a $2.5 million fine and efforts to force a sale of the team — he knew he needed solid legal ground because Sterling would sue to block it.

And Sterling will, a source told the New York Daily News.

Donald Sterling won’t go down without a fight, according to an NBA executive who is close to the disgraced owner of the Clippers, and will sue the league if the other 29 owners vote to force him to sell….

“He is not going to sell the team,” the executive said….

As the Daily News reported Wednesday, if Sterling sues, he would likely base his case on language in the NBA constitution that deals with conduct that constitutes “willful acts,” a term that can be difficult to interpret and enforce. Generally those acts include criminal behavior, financial instability or gambling or fixing games.

Sterling is reportedly battling cancer, but don’t think that will cause him to change his outlook and decide to just walk away. That’s not who he is. Plus, his identity is wrapped up in owning the Clippers — he loves basking in the glow of celebrity, of people kissing up to him.

One other factor in here — money. Specifically taxes, and the future of the franchise in his family. Sterling bought the Clippers in 1981 for $12.5 million, if he sells the team now for whatever price, he has to pay a roughly 33 percent state and national capital gains tax. A lot of people think the sale price for the Clippers will approach $1 billion, to use that number Sterling would have to pay capital gains tax on $987.5 million, or roughly $329 million in taxes.

However, if one of his family members inherits the team, then he or she sells the team, they are only responsible for the capital gains tax on how much the franchise value increased on their watch. Which is to say, if the franchise is valued at $800 and his wife/son-in-law gets the team and sells it for $1 billion, they only pay the tax on $200 million, or a relatively reasonable $66 million?

The league has already started the process to expel Sterling. Expect his response to come soon.

  1. duhwighthoward - May 2, 2014 at 3:20 PM

    I’d venture that most guys who own their own companies or are filthy rich say sh*+ you wouldn’t believe, including remarks far more blatantly racist than Donald Sterling has. Based on personal experience, I’d say 50% is a reasonable estimate.

    • antistratfordian - May 2, 2014 at 3:28 PM

      Well your statement means nothing if you can’t actually prove that (which you cannot). You could’ve estimated 90% or 10% and it would have the same value.

      But we can prove that Sterling is one of those guys, so in regards to him there is absolutely no doubt.

      • duhwighthoward - May 2, 2014 at 4:36 PM

        No one can do you what you want, which is to poll every business owner and rich guy and ask them whether they are a racist. It’s just silly to think that way.

        But, okay based on my experience, I’ve had business interactions (either working for, with, or selling to) about 60 men who earn over a million dollars annually. The number who have said racist, religiously offensive, or otherwise bigoted statements is in the low 30’s.

        At the end of the day, you probably are working for one of them. And now the bigger question becomes, what do you do when you become aware of the bad things they said in private?

      • antistratfordian - May 2, 2014 at 4:50 PM

        So now it’s the low 30’s? More meaningless estimates from you. Let’s stick to what we can know for certain i.e. Sterling is a racist.

        And I’m not working for one of them, but if I was I would quit. It’s one of the easier decisions anyone can make.

      • apmn - May 2, 2014 at 5:46 PM

        30 out of 60 is 50%, antistratfordian.

      • antistratfordian - May 2, 2014 at 5:52 PM

        What does that matter? 30, 60, 50, 20, 10, 5… these random guesses are pointless.

        It doesn’t really matter how many other people out there are like this. That is irrelevant to the case of Donald Sterling.

  2. jonka - May 2, 2014 at 3:20 PM

    Sad part is that he has a great case.
    Was in the privacy of his own home. The recording isn’t admissible in court and the obnoxious turd will fight this to his grave.

    • jollyjoker2 - May 2, 2014 at 4:42 PM

      I don’t blame him either. Hopefully he will get damages from the NBA. I bet their isn’t 1 person alive outside of the pope that doesn’t have a perverted thought – only difference is he said it in front of a bunch of litigious jackels.

      • boxertdog - May 3, 2014 at 1:09 PM

        Most rich folks of all colors have everyone close to them sign an NDA. We would hate all of them if we knew how they talked about Blacks, Whites, Asians, Mexicans etc.

        Glass houses folks.

    • ranfan12 - May 2, 2014 at 9:53 PM

      Wait until all the facts come out. Notice how he’s a lawyer and isn’t even suing about the tape. He’s suing about the team. There could always be another reason to the recording

  3. antistratfordian - May 2, 2014 at 3:23 PM

    This guy… he doesn’t get it. The jig is up. He is just delaying the inevitable.

    • rainmaker1982 - May 2, 2014 at 6:53 PM

      If you know the law and have any common sense, you’ll be able to figure out that the NBA cannot force the sale of a team because of an opinion someone had in private. Adam Silver had the case of Roger Goddellitis and needed to drop the hammer on Sterling or else the players were going to “boycott”. Even Mark Cuban agrees that Silver needs to be very careful on how he pursues the “forced sale” of the Clippers.

      If Sterling does fight this, the NBA’s ruling will not hold up in a court of law.

      In fact, there’s going to be a lot of upset people when the bad news breaks that the NBA was taken to school by Sterling and his A team of lawyers (which he probably doesn’t need).

      But isn’t it funny how his “girlfriend” immediately lawyered up as soon as the tape was released?

      She will be lucky to avoid jail time.

      This is a perfect example of how the media has more power than you think and dictates a lot of what happens in our society today.

      • antistratfordian - May 2, 2014 at 8:15 PM

        Well that isn’t necessarily true because Sterling can be found to have not fulfilled a contractual obligation. The status of his conversation as being “private” or otherwise is immaterial.

        In any case, the league will not be allowed to continue until Sterling sells the team. The players will not play next year if Sterling still owns the Clippers.

      • DJ MC - May 2, 2014 at 8:55 PM

        He may have had the opinion in private, but it was released to the public. At that point, it becomes a separate issue.

  4. mackcarrington - May 2, 2014 at 3:24 PM

    I lost a close family member to cancer so I don’t wish it upon anyone.
    But frankly, this is going to be a race between the cancer and the court system.

    • bigbamboom1 - May 2, 2014 at 4:01 PM

      If there was ever a case for an appropriate targeted cancer. This is it. One that robs him of his “manhood”. Which is exactly what he did in his life to minorities. Payback is ironic and it bites hard!

  5. jattsoorma - May 2, 2014 at 3:26 PM

    it was a great hoorah moment for adam silver and it appeased sponsors and the players, but, as noted all along, the league is on shaky legal ground here.

    What if Sterling wants to do some digging and have family members of the owners testify under oath of the content of their private conversations at home? do the owners really want to get into a lengthy fight with this guy who has shown to be ruthless in the past?

    In the end i believe the family keeps the team with the compromise being that Donald steps down from day to day operations.

    • spursareold - May 2, 2014 at 3:30 PM

      Donald is already BARRED from day to day operations.

      • jattsoorma - May 2, 2014 at 4:04 PM

        he will continue to be barred but wont be forced out of ownership.

    • antistratfordian - May 2, 2014 at 3:35 PM

      The public, the players union, the league, the other owners, etc. will not allow Sterling to keep the team. It’s pretty much that simple. If Sterling goes on owning the team he won’t have any players to play for it. He’s frustrated and inflexible right now, but eventually he will see that this is something he cannot win.

      • jattsoorma - May 2, 2014 at 4:03 PM

        The players union,league, the other owners might not let him keep it, but a judge will.

      • antistratfordian - May 2, 2014 at 4:24 PM

        That won’t matter. A judge cannot stop a public protest, a players strike, or an owners strike, etc. There will be too much pressure on Sterling to maintain ownership regardless of what any judge says.

      • duhwighthoward - May 2, 2014 at 4:40 PM

        @antistatfordian, the problem is if the players were to strike, they would not be paid. Since they are under contract, they would have to wait until the contract expires before they could sign elsewhere.

        Could you imagine Blake Griffin sitting out his prime years in protest?

      • antistratfordian - May 2, 2014 at 4:58 PM

        Any contract can essentially be voided under certain conditions. Sterling can also be found to have failed to fulfill a contractual obligation.

        I’m not sure you’re going to be able to find a judge in California (or anywhere in the United States) who would force an African-American player to play for such a racist owner.

        Besides, players have held out and forced trades or releases even under normal circumstances.

      • asimonetti88 - May 2, 2014 at 6:01 PM

        The NBA is run by smart lawyers. They will push the case into a court that is pro-business and win.

      • atwatercrushesokoye - May 2, 2014 at 6:47 PM

        A judge would put a very quick end to a player’s strike, most CBA’s have wording in them that specifically prohibits wildcat strikes, if the players decide to go on strike with a legal CBA in place the owners can take them to court and get massive damages from the union in what would basically be an open and shut case.

        Also an “owner’s strike” is known as a lockout, which would be shutting down the league, taking in no revenues and having to payout money to sponsors and TV networks, do you honestly believe the other 29 owners care enough about this to do that? Oh and much like the players, if the owners decided to have an “owner’s strike” with a valid CBA in place, that would result in an open and shut court case with a big penalty being paid to the players.

        Your previous most was more likely, the market (free agents leaving, sponsors boycotting, tickets remaining unpurchased) will ultimately be what forces Donald Sterling, or his famiy, to sell the franchise.

      • antistratfordian - May 2, 2014 at 8:17 PM

        You’re missing the point. The owners in this case would side with the players. It would essentially be the players union + 29 other owners protesting Sterling until he sells the team.

        This is not a battle Sterling can win.

      • atwatercrushesokoye - May 3, 2014 at 12:31 AM

        The owners side with the players right now because it’s economically prudent, the second it becomes less prudent (if Sterling were to have a good chance with his lawsuit, or if it becomes apparent that owners will be asked to be honest about things they may have said as part of a deposition of said lawsuit) and the owners will quickly change their tune.

        That’s the real point, the owners aren’t making some grand gesture against racism here, they stand by themselves and their revenue in this, right now it means siding with the players if the economics were to change then so will the owners stand.

      • antistratfordian - May 3, 2014 at 3:29 AM

        That’s ridiculous. The owners simply would not be able to get away with standing by their revenue if it meant siding with Sterling – not unless the owners want to be seen as something like an arm of the KKK. That just isn’t realistic. Plus, if their only motivation is revenue (which it isn’t – these are human beings, after all), the worst thing they can do is been seen as enabling Sterling more than they already have.

    • unxpexted1 - May 2, 2014 at 4:26 PM

      Well the whole private conversation thing may get thrown out of the door if the things i’ve read are correct. Apprently this dude has a thing for being recorded and knew that there was a third party in the room reporting those conversations and that there is 100 of hours worth of just random convos that he records. So that whole issue may be a non issue if this is true. If he knew he was being recorded his comments are fair game and admissable in any court

    • urodaddy07 - May 2, 2014 at 7:11 PM

      He will be trying yo use the courts to block a forced sale, but if the NBA owners vote to oust him and they have grounds based on NBA rules (not American or state law because these are not relevant to this situation), then he will eventually have to sell. The question really is if his violations of NBA conduct are sufficient for the courts to uphold a forced sale ruling. Also, if he does manage to block the sale and he hangs on to the team I strongly suspect that all players will leave the Clippers and he will not have a team. The value of the team will plummet. This is a lose-lose situation for Sterling. If he hangs on its also a lose-lose situation for the NBA.

  6. unxpexted1 - May 2, 2014 at 3:28 PM

    And it begins……

  7. spursareold - May 2, 2014 at 3:28 PM

    No surprise. Too bad for him that he signed the stuff he signed when he bought the team. The NBA constitution is designed specifically to prevent an owner from going rogue and tying stuff up in the courts. When you agree to arbitration, and he did, you waive your right to sue. Unfortunately for him, the arbitor, commisioner Silver, has ruled against him. I’m guessing this gets thrown out pretty quickly.

    • atwatercrushesokoye - May 2, 2014 at 6:54 PM

      According to the article on SI written by their legal expert you’re correct about the suspension and fine, those are locked into place, but the clause they’d be using to try and make him sell makes mention of financial issues or the team being run poorly or the owner committing acts of fraud etc, it makes no mention of the owner making reprehensible comments as a reason to force a sale, and there’s a belief that owner’s might not have an appetite to open that can of worms for fear it could then set precedence and be used against one of them at a point in the future.

      The article is a good read I highly recommend looking it up, it’s by Michael McCann I believe, I’d post a link but I’m not sure if that’s allowed in here.

  8. azarkhan - May 2, 2014 at 3:34 PM

    I’m sick of Donald Sterling stories and all the holier-than-thou comments they generate.

    • duhwighthoward - May 2, 2014 at 4:40 PM

      Well, I personally would never write such a negative statement as you just have.

    • asimonetti88 - May 2, 2014 at 6:02 PM

      I’m sorry to hear there is someone who is following you around, forcing you to read the Donald Sterling stories and comments on them. Would you like me to call someone to help you?

      • azarkhan - May 2, 2014 at 6:42 PM

        Miss Simonetti, always with the big mouth, commenting on everything. You really are a sad, lonely person.

  9. spursareold - May 2, 2014 at 3:35 PM

    If Sterling keeps the team, the brand will be damaged WAY more than the taxes that will have to be paid. The cat is out of the bag now, and has been dragged into the light. If the team isn’t sold, very few players will go there to play, and certainly no marquee free agents. Most players traded there will leave at their first opportunity. I’m talking about ANY Sterling family member owning the team. Mrs. Sterling was complicit in the housing discrimination.

  10. xliontamer - May 2, 2014 at 3:55 PM

    I think the financial portion is going to come into play – the case will be that he is going to cost the league significant money by remaining an owner, and they have the right to remove him.

  11. fm31970 - May 2, 2014 at 3:57 PM

    “if one of his family members inherits the team, then he or she sells the team…”

    I think this is his plan. Sterling keeps his pride and doesn’t ever sell, but a family member keeps control, get the sale money, and pays far less in taxes than Sterling himself would have. The cancer is now the X-factor, but I don’t see how this will not be tied up in court for at least a year.

    • spursareold - May 2, 2014 at 4:27 PM

      It’ll never see the inside of a court room. During the preliminaries, the NBA legal team will present the documents that Sterling signed when he bought the team, waiving his right to sue and accepting arbitration.

      I don’t think the NBA cares about Sterling’s pride, nor should they.

  12. censoredpost - May 2, 2014 at 4:22 PM

    The team is worth a billion now. What will it be worth in a couple years when all the good players are gone and no new good ones are willing to sign? That ship will sink with him on it, there is no way around that. Funny thing is he proved you could make money putting a garbage team on the court for years. This is gonna get fugly.

    • jollyjoker2 - May 2, 2014 at 4:45 PM

      He is a billionaire for a reason. Not a fool. I am sure he has a plan. To say no one will play for him? Who you kidding. Millions per year buys a lot of insults. In fact, he could start with me if he paid me enough .

      • mackcarrington - May 2, 2014 at 4:52 PM

        Just curious. Do you share the same viewpoint about race as Sterling?

  13. khar9 - May 2, 2014 at 4:30 PM

    I am perfect and never thought anything bad about another race

  14. churchillone - May 2, 2014 at 4:55 PM

    Give THE RACIST his 12 million back. If he doesn’t like it let him sue (which he’ll do anyway). The suit would be filed in the nearest district court near Compton, California in South Central Los Angeles. Maybe Snoop Dogg or one of his posse will be on the jury. I wonder how much they’ll award him. ONE MO-FO DOLLAR

    • atwatercrushesokoye - May 2, 2014 at 7:01 PM

      That’s an anti-trust violation, it would go to federal court be an open and shut case and would result in Sterling getting 3 times the damages or approximately $3 billion dollars…I’m guessing he wouldn’t mind if they tried that.

      If the NBA does actually get the chance to sell the team, they’ve actually screwed themselves a little bit, they now have the responsibility to take the highest offer, they have no ability to take a lower offer from someone they deem a better owner, if they do it’s an anti-trust violation and again would result in 3 times the damages.

  15. ocgunslinger - May 2, 2014 at 4:59 PM

    Again as I have stated in other posts, the big problem is having the PC police acting and taking private property based on private conversations and being tried in 72 hours in the court of public opinion. This could effect so many people including every celebrity just because someone will always be offended about anything. Just a dangerous path we are about to tread.

    • urodaddy07 - May 3, 2014 at 9:00 PM

      Not as simple as that. The Clippers franchise and other NBA teams are not like a piece of land. There are rules to ownership. The NBA holds owners of teams within the franchise yo certain standards.

  16. andiroid71 - May 2, 2014 at 5:32 PM

    If your legal system wasn’t so stuffed up in the USA this wouldn’t be a hard case to win. So anyone with money to find a way to construe the wording to their favor is the winner. Not the one who is actually in the wrong. It’s sad.

  17. nokoolaidcowboy - May 2, 2014 at 5:33 PM

    Man, look at that pic and it reminds me I’ve to start working out again.

  18. jammer73 - May 2, 2014 at 5:44 PM

    If Sterling were to win and keep ownership even it it’s another family member I could see there being coach and player fall out who will walk and refuse to play for the team. It could get REAL fugly.

  19. mblue24 - May 2, 2014 at 6:57 PM

    He needs to fight the NBA. Afterall, they are trying to take his business which he has owner for a long time. Who wouldn’t fight it. Any business owner would fight it to the end. I sure in the hell wouldn’t take Sh** from the NBA noattee what I said. Afterall, it was said I the privacy of his own home. People don’t like it then don’t listen. I’m tired of people and the governor thinking they can do what they want. Screw that. Fight to end.

    • atwatercrushesokoye - May 2, 2014 at 7:04 PM

      While I don’t agree with anything Sterling said or believes in, I think property rights are sacred, he made some awful comments but didn’t break any laws or do anything illegal, I don’t believe anyone should be able to seize his business from him.

  20. greej1938l - May 2, 2014 at 10:18 PM

    LOOK AT THAT BELLY

  21. mazblast - May 2, 2014 at 10:39 PM

    If he was to leave the team to his wife, there would be no estate tax (federal; I don’t know about California) on the value of the team as of his date of death, and if she sold the team, she would pay capital gains tax only on the difference between any sales price and the value as of his death.

    If he leaves it to anyone else, estate tax can kick in, which could force the estate or heirs to sell the team to pay it. Again, though, if the franchise is sold, the heir(s) or estate would pay capital gains tax only on the difference between any sales price and the value as of his death.

    The difference in taxes paid in total is considerable. He’d be far better off leaving the team to his wife, but from what we know about him, he doesn’t give a hoot about her. They’re each probably staying alive out of stubbornness.

    From what we know about Sterling, though, he’s probably spent millions with some shysters devising some plan to try to outwit the tax people, and his estate will be tied up in probate and tax disputes for 50 years.

  22. antianarxi - May 3, 2014 at 1:30 PM

    this is america, noone can make you sell something you legally own! democracy and laws even protect racists from being swindled from their property.

  23. rcali - May 3, 2014 at 6:49 PM

    Ha ha, NBA has no case here to force him to sell but they had to at least come on strong and put up a good face to the public and the liberal imedia. You are all being played! Let me just say that if all this goes through this means we all better be careful what we say, even if it’s in our own bedroom…and don’t forget about your texts and emails! Very dangerous precedent being set here.

    • Kurt Helin - May 3, 2014 at 9:53 PM

      As Adam Silver said, this is public now (and she says the taped conversations were with his consent and a third party in the room, if true Sterling is screwed). But the bigger point is that the league will rightly argue he and those comments are bad for business — sponsors are pulling out, players will not play for him if the league loses the case. On those grounds the league constitution does allow for his removal.

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