May 2, 2014, 3:12 PM EDT
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.
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.
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