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Donald Sterling’s response to NBA charges vows fight, Shelly Sterling files separate response

May 27, 2014, 9:05 PM EST

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If you read from his comments over the past couple weeks that Donald Sterling was willing to let his Los Angeles Clippers go, that he didn’t really want to fight the league, then you haven’t followed Donald Sterling’s career.

Sterling’s attorney filed a lengthy, defiant response to the NBA’s charges — those charges are part of an effort by the league to use its constitution to force a sale of the team following outcry after prejudiced remarks by Sterling first heard on a private recording obtained by TMZ and then additional remarks on CNN.

Sterling’s response talks of large offers for the team — in excess of $2.5 billion, although his attorney later denied that was the number — and promising to fight the league’s efforts to force a sale of the team, reports Brent Schrotenboer of the USA Today.

Los Angeles Clippers owner Donald Sterling said the NBA’s efforts to terminate his ownership of the Los Angeles Clippers are “illegal” and that it would force his family to pay an enormous capital gains tax that would be “egregious,” according to his response to NBA charges filed Tuesday.

In a 32-page response to the league, he said he will fight the charges and noted that he has received offers of more than $2.5 billion for the team.

Donald’s wife of 58 years, Shelly Sterling, filed a separate response with the league asserting her rights as half owner of the team under community property laws and saying she was just an innocent bystander in this. Her attorney Pierce O’Donnell reached out to NBC News with this statement:

“Donald Sterling has authorized Shelly Sterling in writing to negotiate the sale of the Los Angeles Clippers, including his 50 percent ownership of the team. Shelly is managing the sale of the Clippers. While no formal offers have yet been received, Shelly and the NBA are working cooperatively on the transaction.”

Donald Sterling’s lawyer refutes that.

The NBA is not slowing down its process, NBA spokesman Mike Bass said in a statement in response to the Sterling’s filings.

“This evening, the NBA received responses from Donald and Shelly Sterling to the charge to terminate the current ownership interests in the Los Angeles Clippers.  The NBA Board of Governors will meet on June 3 at 1 p.m. in New York City to hear and vote upon this matter.  Should the Board vote to sustain the charge, the Sterlings’ interests in the Clippers will be terminated and the team will be sold.”

The owners need a three-quarters vote (23 of the 29 owners) to strip Sterling of his franchise.

This all stems from recorded comments by Donald Sterling that were prejudiced (both in the interview with his former mistress and on CNN), combined with a racist history, which resulted in a wave of anger from fans and sponsors withdrawing their support from the Clippers. This is what the NBA had said previously about the charges.

The charge asserts that Mr. Sterling engaged in conduct that has damaged and continues to damage the NBA and its teams. Among other things, Mr. Sterling disparaged African-Americans and “minorities”; directed a female acquaintance not to associate publicly with African-Americans or to bring African-Americans to Clippers games; and criticized African-Americans for not supporting their communities.

Mr. Sterling’s actions and positions significantly undermine the NBA’s efforts to promote diversity and inclusion; damage the NBA’s relationship with its fans; harm NBA owners, players and Clippers team personnel; and impair the NBA’s relationship with marketing and merchandising partners, as well as with government and community leaders. Mr. Sterling engaged in other misconduct as well, including issuing a false and misleading press statement about this matter.

The mention of capital gains tax by Donald Sterling’s lawyer gets to the heart of the matter — in California the combination of state and federal taxes would force him to pay 33 percent of his profit on the sale in tax. He bought the team for $12.5 million more than 30 years ago, even if the team sold for $1 billion (and it’s expected to be higher, maybe much higher) that would be $333 million in taxes.

However, if Sterling holds on to the team until he passes (he is reportedly battling cancer) and the team goes to his relatives who sell it, they only pay capital gains on the difference between the estimated value at the time of his passing and the sale. That would be considerably less.

The league does not care.

They are moving ahead with their drive to force a sale. If the 29 other owners vote to terminate Sterling’s ownership, the league then takes over and sells the team (Sterling would get the profits from that sale). The league believes it has the right to do this because the Clippers are a a franchise and Sterling signed documents multiple times over the years agreeing to the league’s rules and bylaws. Most legal experts side with the league’s position.

Shelly Sterling is trying to say she will help sell the team, however as part of that she wants to keep a piece of the franchise as a minority owner — her identity is clearly largely tied to being the owner of the Clippers.

The league and its players will not tolerate that.

Expect the league’s owners to vote to terminate Sterling’s ownership of the team on June 3.

Expect the Sterlings to take this to court after that vote.

Expect this to continue to drag out. Because this is who the Sterlings are, this is what they do.

  1. jburk003 - May 27, 2014 at 9:22 PM

    Can’t blame him for wanting to protect his asset.

    That’s the oldest rule in the book. You may not like the guy, but you can’t disagree with his motives for wanting to keep the team until he dies. It is literally the difference of hundred of millions of dollars. Again, I’ll say that you can not blame him for taking this road.

    If you do, I’ll bet my paycheck you’re the 99% that despises the 1%…

  2. urallstupid - May 27, 2014 at 9:39 PM

    man paying 300 million when you just made 1 billion? egregious indeed.

    on a sidenote, if anyone knows, is capital gains tax all he would have to pay? or is there still income tax etc on a sale of a team?

    • bkbell3 - May 28, 2014 at 6:06 AM

      Capital gains is income tax, it’s just a lower tax than wages or on the profit a company makes each year. He bought the team for 12.5mil and would have to pay capital gains taxes on the difference between 12.5mil and say 1billion dollars. If he dies and it’s worth say 1billion and he leaves it to his family and they sell it for 1.2 billion the family only pays tax on 2 hundred million as opposed to 987.5 mil.

    • redbaronx - May 28, 2014 at 2:43 PM

      @urallstupid – If I’m not mistaken, he would only have to pay Capital Gains. For him to pay Income Tax, Sterling would have to be on the payroll as an employee. As a shareholder you wouldn’t pay on dividends. At least that is my understanding.

  3. Great Caesar's Ghost - May 27, 2014 at 9:51 PM

    Meanwhile, the Bucks may be terrible but ah…at least the erstwhile owner is a good man.

    http://espn.go.com/nba/story/_/id/10992051/former-milwaukee-bucks-owner-herb-kohl-gives-stadium-employees-500-gift

  4. drunkenjunk - May 27, 2014 at 10:06 PM

    the league will be better as a whole once this scumbag and his awful wife are removed

    • jlynch617 - May 27, 2014 at 10:41 PM

      This is the same league that has a drawing from among the worst 4 teams for the first round draft pick because they don’t trust teams not to take a dive so they can get the pick. This is the same league owners that the league is concerned that they would forget the fans, forget the players and forget the league just to get that pick, and you think these owners look bad compared to Sterling? Give me a break.

    • ksingleton101 - May 28, 2014 at 1:28 AM

      He didn’t speak for the team so stop treating the team as if he did.

    • therealhtj - May 28, 2014 at 10:50 AM

      Where was the outrage when the league diverted one of it’s top players to this scumbag? Oh that right, it was fine since it screwed over the Lakers.

      • bougin89 - May 28, 2014 at 2:23 PM

        You do realize it was the other NBA owners'(the same ones that owned the Hornets at the time) outrage about Chris Paul going to the Lakers that brought on the veto, right?

        They didn’t want the league to be the Heat, Lakers, and all the other “Washington Generals”…

      • therealhtj - May 28, 2014 at 8:38 PM

        You mean the same owners who empowered Demps to make whatever trade he saw fit?

      • bougin89 - May 29, 2014 at 10:10 AM

        But they were still the owners and stern had to sign off on the trade because they owned the team.

        They made it clear to Stern how much they did not like this, therefore making Stern not sign off on the trade, just like any owner overrulling their GM.

  5. SBoy - May 27, 2014 at 10:22 PM

    “Yes, the league can do this because it is a franchise and Sterling signed documents multiple times over the years agreeing to the league’s rules and bylaws.”

    Just wondering if Kurt is a lawyer or has spoken to lawyers perhaps representing a defense and a prosecutorial point of view… People can put whatever they want in contracts, it doesn’t mean that every clause of every contract holds up in court. In fact there have been plenty of leases and contracts I have signed that have a specific clause that reads… should any clause or clauses be deemed unenforceable by a court, the remaining clauses will still be in effect.

    • Kurt Helin - May 28, 2014 at 9:34 PM

      I have talked to lawyers about this, neutral ones to the events. I don’t know any that think Sterling is likely to win on this.

  6. canadatude - May 27, 2014 at 11:15 PM

    He could avoid all that tax if he sold it to the NBA and donated the money to charities.
    The league could use the sale to reduce profits and ultimately the salary cap. All the players take a pay cut while money goes to people that really need it.

    • bougin89 - May 28, 2014 at 10:38 AM

      That sounds nice but unfortunately things like that don’t happen in the real world.

  7. jerdogthompson - May 28, 2014 at 12:07 AM

    Well spoken drunkenjunk, it’s clear the league must act swiftly and with extreme prejudice against these scourges. Clock is ticking and it certainly favors Adam et al.

    It’s amusing the antics employed, however, this is a Multi Billion dollar poker game so I suppose it’s expected. I long for the day the headlines speak of justice served, on a cold platter of course.

    #InDocwetrust

    • therealhtj - May 28, 2014 at 10:54 AM

      You and every other Clipper fan knew exactly the type of guy you were supporting and it’s hypocritical to act indignant about it now. It’s great that you can get behind a plan to finally oust him now that it serves your agenda, but every dime you’ve spent supporting the Clippers only served to enrich that man.

      #docknewwhohewasgettingintobedwith

    • asimonetti88 - May 28, 2014 at 11:29 AM

      I specifically remember making a comment on what a dingus Sterling was earlier this year before this all came to light, and you were the first one to call me a jealous Laker fan.

  8. philyeagles5 - May 28, 2014 at 12:35 AM

    Not in support of Sterling at all, but he’s not wrong. He lost his team because of a comment he made in the privacy of his own home. The recording was made illegally and he should fight as much as he can.

    • TheJStyles - May 28, 2014 at 1:05 AM

      It’s not illegal if he told her to record him, like is being recorded.

      I’d say fight it, if the guy actually cared about basketball, but from the previous 25 or so years of the Clippers, you can tell he doesn’t.

      I won’t feel sorry for someone who’s about to make multiple billions of dollars.

      • TheJStyles - May 28, 2014 at 1:05 AM

        being reported*

    • rtlguru - May 28, 2014 at 1:06 AM

      Exactly.

      Put yourself in his shoes. These are his opinions expressed in a private conversation. Imagine if someone tried to force you to sell your life business because of an illegal recording. You would fight till the bitter end. At this point it’s not even about money.

      • mackcarrington - May 28, 2014 at 1:57 AM

        And this is not his “life business”. Sterling bought a franchise in the NBA. He didn’t build the Clippers from the ground up. If you would read the articles, you would know that he agreed to their rules when he bought in.

        You’re welcome.

      • tjs11215 - May 28, 2014 at 11:10 AM

        Sterling’s an IDIOT but that’s not illegal and in this case, I hope he sues and wins. Free speech matters and this political correctness is bs. The nonsense about him signing agreements is just that; nonsense. If he hadn’t signed, they wouldn’t have sold him the team, that’s coercion. They shouldn’t be allowed to violate constitutional rights, all of us deserve those protections. After the suit, if he wins, players should not sign with his team (the ones under contract should fulfill their contracts or ask to be traded) and fans shouldn’t buy tickets, that’s how to deal with this. Also, the bimbo that illegally taped the conversation should be prosecuted, Same goes for the person who sold the tape of Beyonce’s husband and sister, this electronic surveillance is bad news.

      • Kurt Helin - May 28, 2014 at 9:02 PM

        I’m guessing you’re not a lawyer.

      • 1historian - May 28, 2014 at 1:42 PM

        Not to mention the award he has ALREADY received from the NAACP.

      • redbaronx - May 28, 2014 at 2:56 PM

        @rtlguru – If you knew anything about franchises (McDonalds, KFC, etc.) you’d know that poor representation of the brand is a clause in the franchise agreement, standard in any franchise. You are LICENSING the brand from the parent organization. You don’t OWN the brand when you have a franchise. So the NBA is fully within its rights to revoke Sterling’s franchise based on the fact that sponsors and fans react negatively and this hurts the NBA brand financially, and does not represent NBA core values.

    • mackcarrington - May 28, 2014 at 1:54 AM

      You’re right, except this is not in a court of law right now and there are no legal charges being filed.
      If , for example someone at Augusta National made some racial comments about Condoleeza Rice not being welcome, and they came public. Don’t matter how. The backlash would be so strong, the leaders of the club would have no choice but to revoke that persons membership. The NBA is in effect a private club also. They can invoke any kind of rules they want.
      Sterling could have made those comments while sitting on his own toilet. They’re public now, and since this ain’t a court proceeding it don’t matter about the legality of the recording.

      • jcmeyer10 - May 28, 2014 at 7:35 AM

        Thank you. People are confusing this with a constitutional/court of law problem and not a private business enterprise acting in their best interest within their agreed upon rules.

    • asimonetti88 - May 28, 2014 at 11:32 AM

      This isn’t a court of law. Sterling has not been arrested or charged with any crimes. The legality of the recording is not in question, it is absolutely illegal. But it did become public. Luckily, the NBA is a private business, and it does not have the same rules governing it as a court of law.

    • joebone - May 28, 2014 at 12:42 PM

      He also made comments in a television interview, which by themselves would get the other owners to want him out. Not only is he wrong, he is stupid.

    • redbaronx - May 28, 2014 at 2:52 PM

      @philyeagles5 –

      1) The illegal recording was not made by the NBA, it was made by Sterling’s girlfriend.
      2) Regardless of where the comment was made, the reaction of sponsors and fans leads to devaluation of the NBA brand and therefore gives the NBA every right to remove Sterling as owner as Sterling is damaging the NBA.
      3) Sterling IS going to fight this, and he will lose. Guaranteed. He has no legal ground to stand on. Just like a McDonalds franchise can be revoked based on the same kind of clause where an owner/operator of a McDonalds can have the franchise revoked based on ill representation of the brand (poor upkeep/sanitation, misrepresentation of ads, etc), the NBA can do THE EXACT SAME THING with Sterling and is well within its rights to remove Sterling.

  9. lgwelsh1 - May 28, 2014 at 1:10 AM

    There are millions of people who want this to go to court, not everyone agrees with the NBA.

    • jcmeyer10 - May 28, 2014 at 7:37 AM

      The Court of the NBA does not care about the US Constitution only the NBA’s Constitution.

      • qball59 - May 28, 2014 at 9:36 AM

        Yes, and it’s the NBA Constitution which is being violated.

        Mark my words: Donald Sterling will win this case. Maybe not on June 3 in the NBA’s Star Chamber, but as soon as a real judge reviews it, the hypocrites of Political Correctness are going to have their @sses handed to them on a platter.

        And no, I’m not a racist, nor do I approve of Sterling’s comments.

      • asimonetti88 - May 28, 2014 at 11:34 AM

        What exactly is he going to win it on?

    • asimonetti88 - May 28, 2014 at 11:33 AM

      So you agree that black people shouldn’t go to Clippers games?

      • qball59 - May 28, 2014 at 2:40 PM

        I don’t think any reasonable person agrees that black people shouldn’t go to Clippers games.

        Honestly, I’m not entirely certain that Donald Sterling is playing with a full deck these days. Even on the tape itself, as well as the interview with Anderson Cooper, he appears to ramble quite a bit and struggles to stay on point. His statements come across as disjointed and illogical.

      • therealhtj - May 28, 2014 at 3:07 PM

        I don’t think anyone should attend Clippers games until Sterling is out. All the players should be given the option to become free agents and should their salaries dip, Sterling should be on the hook for the difference. Let’s see the Clipper apologist fans stand by their team then.

    • redbaronx - May 28, 2014 at 3:09 PM

      @lgwelsh1 – No matter how you slice it, if this goes to court the NBA wins the case. Sterling signed a franchise agreement and though he “owns” the Clippers, franchises can be revoked. Look at any standard food chain franchise and you’ll see there are clauses about representing the brand to certain standards. The NBA has every right (morally and legally I might add) to revoke a franchise of a partner that is tarnishing the brand and losing money for the other partners. The NBA would have to show that there is damage to the brand, and that is easy enough in sponsors lost.

      If Sterling tried to sue the NBA he would lose, and lose big. If Sterling gets the wrong judge, that judge might even feel that Sterling needs a “lesson” and make Sterling’s predicament even worse. Judge’s do have the power at their discretion to impose harsher decisions in cases where they feel the plaintiff or defendant just doesn’t “get” their wrongdoing, or if they feel the courts time is being wasted.

      As Sterling has used the courts as his own personal weapon in the past and abused the system, I wouldn’t be surprised if (when) this goes to court that he might run into just such a judge who feels Sterling needs a lesson to the full extent of the law. That would mean:

      A) Dismissing Sterling’s case against the NBA
      B) Granting the NBA any damages if they have a counter claim and are seeking recompense.

  10. sternf - May 28, 2014 at 1:11 AM

    Sigh. If you’re going to write about taxes then you need to mention estate taxes. Sure the heirs would get a step up in basis should Donald Sterling die before a sale is effected (or at least a step up in basis of his 50% interest), but they would still have to pay stiff estate taxes.

    Since the Federal estate tax would be in the neighborhood of 40%, the taxes would be considerably more.

  11. davidly - May 28, 2014 at 4:30 AM

    Crazy, but that’s how it goes
    Millions of people living as foes
    Maybe it’s not too late
    To learn how to love
    And forget how to hate

    Mental wounds not healing
    Life’s a bitter shame
    I’m going off the rails on a crazy train
    I’m going off the rails on a crazy train

  12. mannyicey - May 28, 2014 at 5:38 AM

    Here’s the issue: if the majority of owners sustains the charge, he’s no longer the owner. That’s how you interpret the by-laws of the NBA. He may have had a shot legally on the interpretation of the charge, but not on the outcome of the vote. And I don’t think that he can get a temporary injunction that keeps him as owner while he goes through court proceedings. He gave stewardship of the team over to his wife, so he’s looking to cash out anyway.

    So all of this “I’m going to court!” stuff is irrelevant. All the Sterlings want to do is have enough time to put a deal in place that will allow them to sell the team. They are no longer interested in owning the Clippers going into next season. If they did, they will lose so much money, they would have to sell the team at a loss because people would refuse to endorse the team, the players may not play and there would be a huge loss in revenues because attendance would drop dramatically. So the only shot is to sell it at a profit prior to June 3rd… all of the legal stuff is just stalling tactics.

  13. El Pollo Loco - May 28, 2014 at 9:58 AM

    I hope Sterling wins.Not because I agree with him but because this wasn’t an NBA issue this was an illegally taped conversation in the privacy of his own home.

    • redbaronx - May 28, 2014 at 3:13 PM

      @El Pollo Loco – Guess what? The fact that Sterling was recorded still doesn’t make Sterling right, and this isn’t about legality. The NBA brand will suffer if they don’t remove Sterling. If you love the NBA, then you don’t want to see the league hurt by this. Sterlings actions are cause for the NBA to revoke the franchise legally, just like McDonalds can revoke a franchise. There’s no reason for you to hope Sterling wins unless you’re actually OK with the things he said.

  14. teambringitstrong - May 28, 2014 at 10:59 AM

    Look people. What you do in the dark comes out in the light. This is not an illegally taped conversation as it’s not being used in a court of law. Get that through your heads. This is not about PC, it’s about continuing to put the NBA in a bad light. The previous commissioner knew Sterling’s reputation and chose to look the other way. He has been this way for years as most of us in the L.A. area already knew.
    For those of you who want to play lawyer, and say this is illegal or a judge will rule against in, you are wrong.

    • 1historian - May 28, 2014 at 1:47 PM

      Just come out and say it – this is all about MONEY.

  15. jerdogthompson - May 28, 2014 at 11:31 AM

    ahhh the perma trolls qball & the realhtg (which I’m certain is lakerluvr with an alias) coming out to espouse yet more nonsense. Despite the legal renderings of many professionals, of which neither of you are not, you still manage to try and “wish upon a star” that DTS gets to keep his team. The writing is on the wall and YOU WILL NOT FIND A JUDGE that will go against the agreed upon terms by both Shelly & Donald outlined in the C&B of the NBA period.

    But, keep showing your utter ignorance as its does truly keep the humor level at an all time high!

    #InDocwetrust

    • therealhtj - May 28, 2014 at 3:19 PM

      Look jerkoffthompson, I’m no one other than who I say I am. Nor do I support Sterling keeping the team as was the case. You like every other Clipper fan has an agenda – now that your team has a glimpse of success, you’re holding on for dear life. You want Sterling out and I understand that. But that was the case long before these tapes came to light. Yet you still chose to support and empower a well documented racist slumlord.

      Everyone involved in the CP3 deal wishes they could get in a time machine and undo it. Sterling would still be the same, but it’d be on yet another losing, irrelevant squad and his inane ramblings would still fly under the radar.

      How about ever Clipper gets to be a free agent and coach gets to walk. Sterling has to pay for any lost salary. You like that one?

      #docwouldbegonesofastit’llmakeyourtinypeabrainedheadspin

  16. mythaimyke - May 28, 2014 at 12:08 PM

    Fight Sterling Fight, I am behind you 110%. You will prevail in the end!!!! They cannot force you to sell the team!!

  17. wlouden77 - May 28, 2014 at 12:43 PM

    I hate how Sterling is taking this woe is me, I have to pay this tax stance. on a 2.5 billion dollar sale as alleged to been offered, the tax would be roughly a half billion dollars.. a staggering sum for sure. however, he will still have like 2 billion after taxes for a team he spent 12.5 million on… I think any one of us would love to have that problem.

    Fact is, the Clippers are indeed a franchise of the NBA which gives the NBA some rights and authorities to remove said franchise. McDonalds, subway, etc can do the same thing if an owners conduct is considered detrimental to the corporation or its image. that is what is going on here.

    Sterling is still coming out on top here.

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