Saturday, 10 May 2014

Sterling vs. the NBA: Who has the edge?






The NBA's<a href='http://ift.tt/1mVnFwr' target='_blank'> suspension and $2.5-million fine for Los Angeles Clippers owner Donald Sterling</a> sent shockwaves through the sports world, but it's not the first time a league has cracked down on a team owner.The NBA's suspension and $2.5-million fine for Los Angeles Clippers owner Donald Sterling sent shockwaves through the sports world, but it's not the first time a league has cracked down on a team owner.

Bleacher Report has <a href='http://ift.tt/1fzdNbE' target='_blank'>dubbed Mark Cuban the "King of NBA fines.</a> The notoriously vocal Dallas Mavericks owner has been forced to pay more than $1.8 million in fines since he bought the team in 2000, many of them for colorful language and criticism of referees.Bleacher Report has dubbed Mark Cuban the "King of NBA fines. The notoriously vocal Dallas Mavericks owner has been forced to pay more than $1.8 million in fines since he bought the team in 2000, many of them for colorful language and criticism of referees.

Former Cincinnati Reds owner Marge Schott was suspended from Major League Baseball in 1993 and 1996 for several controversial comments, among them racial epithets against players. In a 1996 interview, she said this about Adolf Hitler: "Everybody knows that he was good at the beginning, but he just went too far." She was forced to sell her controlling interest of the Reds in 1999.Former Cincinnati Reds owner Marge Schott was suspended from Major League Baseball in 1993 and 1996 for several controversial comments, among them racial epithets against players. In a 1996 interview, she said this about Adolf Hitler: "Everybody knows that he was good at the beginning, but he just went too far." She was forced to sell her controlling interest of the Reds in 1999.

Before the announcement about Sterling's suspension, Minnesota Timberwolves owner Glen Taylor was the only owner suspended in the NBA in 68 years. The league suspended Taylor in 2000 for a season after the Timberwolves made a secret deal with a star player to circumvent salary cap rules. Now, Taylor is chairman of the NBA board of governors, which Commissioner Adam Silver has asked to vote on stripping Sterling's ownership of the Clippers.Before the announcement about Sterling's suspension, Minnesota Timberwolves owner Glen Taylor was the only owner suspended in the NBA in 68 years. The league suspended Taylor in 2000 for a season after the Timberwolves made a secret deal with a star player to circumvent salary cap rules. Now, Taylor is chairman of the NBA board of governors, which Commissioner Adam Silver has asked to vote on stripping Sterling's ownership of the Clippers.

The NFL <a href='http://ift.tt/1o4ipX5' target='_blank'>suspended San Francisco 49ers owner Eddie DeBartolo Jr.</a> for his role in a racketeering scandal tied to riverboat casino licenses. DeBartolo pleaded guilty in 1998 to felony charges of failing to report an extortion case, according to Bleacher Report. By 2000 <a href='http://ift.tt/1iOqAob' target='_blank'>he was forced to cede control of the team to his sister</a>.The NFL suspended San Francisco 49ers owner Eddie DeBartolo Jr. for his role in a racketeering scandal tied to riverboat casino licenses. DeBartolo pleaded guilty in 1998 to felony charges of failing to report an extortion case, according to Bleacher Report. By 2000 he was forced to cede control of the team to his sister.

As former Los Angeles Dodgers owner Frank McCourt's bitter divorce became a cloud over the franchise, his financial turmoil forced Major League Baseball to take over the day-to-day operations of the team in 2011. League Commissioner Bud Selig accused McCourt of "looting" the club of $190 million to fund an extravagant lifestyle. McCourt filed for bankruptcy later that year. During bankruptcy proceedings, <a href='http://ift.tt/1o4iom3' target='_blank'>McCourt agreed to sell the team under a bidding process</a>.As former Los Angeles Dodgers owner Frank McCourt's bitter divorce became a cloud over the franchise, his financial turmoil forced Major League Baseball to take over the day-to-day operations of the team in 2011. League Commissioner Bud Selig accused McCourt of "looting" the club of $190 million to fund an extravagant lifestyle. McCourt filed for bankruptcy later that year. During bankruptcy proceedings, McCourt agreed to sell the team under a bidding process.

The late New York Yankees owner George Steinbrenner was suspended from baseball for making illegal campaign contributions to Richard Nixon in 1974. He was banned for life in 1990 after paying a gambler $40,000 to get damaging information about a player, <a href='http://ift.tt/1o4iom4' target='_blank'>but Major League Baseball reinstated him three years later</a>.The late New York Yankees owner George Steinbrenner was suspended from baseball for making illegal campaign contributions to Richard Nixon in 1974. He was banned for life in 1990 after paying a gambler $40,000 to get damaging information about a player, but Major League Baseball reinstated him three years later.

The NBA said Miami Heat owner Micky Arison had been fined in 2011 for posting about the league's collective bargaining process on Twitter. The amount of the fine was not disclosed, but several media reports said it was $500,000.The NBA said Miami Heat owner Micky Arison had been fined in 2011 for posting about the league's collective bargaining process on Twitter. The amount of the fine was not disclosed, but several media reports said it was $500,000.

The NBA slapped Aubrey McClendon, partial owner of the Oklahoma City Thunder, with a $250,000 fine in 2007 after he told an Oklahoma newspaper that he hoped to move the team, then known as the Seattle SuperSonics, to Oklahoma.The NBA slapped Aubrey McClendon, partial owner of the Oklahoma City Thunder, with a $250,000 fine in 2007 after he told an Oklahoma newspaper that he hoped to move the team, then known as the Seattle SuperSonics, to Oklahoma.

The NBA fined former Los Angeles Lakers owner Jerry Buss $25,000 and suspended him for two games in 2007 after his conviction on a misdemeanor drunk driving charge. Buss died in 2013.The NBA fined former Los Angeles Lakers owner Jerry Buss $25,000 and suspended him for two games in 2007 after his conviction on a misdemeanor drunk driving charge. Buss died in 2013.

<a href='http://ift.tt/1fzdNbP' target='_blank'>The outspoken CNN founder</a> and former Atlanta Braves owner Ted Turner was suspended for a year in 1977 for negotiating a deal with a player who was under contract to play for the San Francisco Giants. The outspoken CNN founder and former Atlanta Braves owner Ted Turner was suspended for a year in 1977 for negotiating a deal with a player who was under contract to play for the San Francisco Giants.









  • NBA named Richard Parsons as new CEO of the LA Clippers

  • Danny Cevallos says NBA is moving ahead while Donald Sterling tapes continue to come out

  • He says the NBA is at beginning of a long and perhaps difficult road to oust Sterling as owner

  • Cevallos: League clearly had authority to fine and ban Sterling




Editor's note: Danny Cevallos is a CNN legal analyst, criminal defense attorney and partner at Cevallos & Wong, practicing in Pennsylvania and the U.S. Virgin Islands. Follow him on Twitter @CevallosLaw. The opinions expressed in this commentary are solely those of the author.


(CNN) -- The NBA and the Los Angeles Clippers' organization may have upstaged Donald Sterling's latest soundtrack Friday afternoon with the announcement that Richard Parsons, former Citigroup and Time Warner chairman, is the new CEO of the team.


The public relations contrast is stark: As the National Basketball Association and the Clippers are moving forward, Donald Sterling's only real statements have come from surreptitiously (or not so surreptitiously) recorded phone conversations.


The new tape of Donald Sterling asserting his humble beginnings and love of all people may not convince people that he should keep control of the Clippers. Whether this new audio helps or hurts the embattled owner, it may not be possible to diminish his public image anymore.



Danny Cevallos


Still, Sterling is not the only party suffering from this controversy. The NBA stands at the beginning of what will certainly be a protracted legal and procedural battle, one that will cost untold millions. It also will embroil the NBA in an unwanted controversy for years to come.


Having a chief executive of Parsons' stature in control of the team may help the league gain an advantage as a battle over the team's ownership starts to play out, but the NBA's road ahead still will not be easy.


But the NBA asked for this. The fact that players and the public largely supported the league will be of little solace to the NBA when it is paying legal fees for years to come. The legal fees may be the cost of doing business, but if banning and fining Sterling would have been adequate, this was an avoidable cost.


The NBA's response to the Sterling controversy is a cautionary tale against meting out hasty, summary punishment. Here's why: The NBA likely had the authority to unilaterally fine Sterling as it did. It also appears to have had the authority to ban him from his team for life. If Commissioner Adam Silver had stopped there, Sterling might have been effectively vanquished, because the decisions of the commissioner are shielded from review by a court.


For the privilege of joining the National Basketball Association, owners contractually give up certain legal rights and remedies. Fining and banning Sterling was probably well within the jurisdiction of the NBA. But in seeking to "max out" Sterling's sentence by forcing him to sell the team, the NBA is forging new legal territory, and doing so at a price.


Sure, there are catch-all provisions of the NBA's rules that ostensibly allow for ouster of an owner who brings harm to the league, but the ouster rules on the whole appear designed for dealing with teams and owners suffering economic or management problems, like failing to make payroll -- not for owners who were private bigots.


There will be an answer to the ultimate question of whether the NBA can legally oust Sterling. We just don't know what it is yet. The league and Sterling can purchase an answer to that question, at the cost of years of litigation and untold fortunes in legal fees.


Moreover, if the NBA's objective was to distance itself from Sterling, they have done the opposite. After years of prolonged public litigation, they will cling to each other as two spent swimmers, choking their own business interests in the process.


Early on, Silver made clear that the punitive measures were directed at Sterling, not at other members of his family. With this blessing, estranged wife Shelly Sterling has injected herself as a blame-free alternative owner. But does she have an ownership interest in the team? Determining true ownership of this team will be a Gordian Knot of litigation: First, there is the issue of whether the NBA can oust an owner where actual "ownership" is disputed. If the team is held in trust, as reported by the Los Angeles Times, and not by a single owner in Sterling, that changes the contours of ownership.


A trust is a legal entity in which property (like a team) is held for the benefit of other persons. It's a protective device, designed for situations just like this: where a beneficiary of a trust is attacked, the property cannot be reached because the beneficiary does not actually "own" the property -- even though he may receive payments or otherwise profit from the property.


The complexity doesn't end there, though. Even without a trust, in California, spouses acquire interests in family businesses when distributing property in a divorce. But that is only a general rule, and who knows what default rules Donald Sterling has attempted to deal with by contract? One thing is for sure, whether it's the NBA, Shelly, or Donald Sterling, each party will mount a different legal argument concerning ownership based upon their own best interests.


Determining the "owner" of the Clippers will be a hodgepodge of legal issues worthy of the bar exam: divorce law, corporate dissolution, trusts and estates law. For now, Shelly Sterling is a cause for concern for the NBA, the other owners, and her own husband. She has leverage, possibly even 50% ownership of the team.


The NBA owners must be longing for the "good old days" when their biggest problems were contract disputes and torn ACLs. We can only guess at the individual owners' respective positions at the moment Silver handed down verdict and sentence against Sterling.


Now, the commissioner has placed the onus on the owners: They have the burden of deciding whether to oust one of their own. It is a Hobson's Choice, which is no choice at all: Even if the owners are privately sympathetic to Sterling, an owner who dares to defend the embattled Clippers owner commits social seppuku.


On the other hand, NBA owners are independent thinkers and independently wealthy; if anyone can weather criticism, it's these captains of industry. Mark Cuban has already publicly observed that "people are allowed to be morons." Whether the owners ultimately cast their ballots for or against Sterling, all of these owners would rather be somewhere else. Public perception aside, the owners have other concerns: If this case goes to litigation, expect broad-reaching discovery demands and subpoenas for sensitive documents and information. This case is a minefield for them, with no real upside.


At the moment, there appear to be a few winners in the Sterling controversy. Kia, CarMax, State Farm Insurance and Virgin America are just some of the companies that pulled advertising from the Clippers after the first tapes were revealed. Ironically, they garnered more buzz by not spending money advertising than they would have by actually spending money on advertising.


It's the ultimate win-win, and it's not over yet. As long as someone else spends the time and money to excise Donald Sterling from the Clippers, the sponsors will have a second photo op. They will return triumphantly to advertising with the team, and take partial credit for the brave stance against one offensive octogenarian -- a stance that didn't actually require them to do, or spend, anything.


Heading into the weekend, the advantage is with Shelly Sterling -- who may have a valid claim to ownership -- the NBA, and Parsons, the highly credentialed, newly anointed CEO. Donald Sterling's next moves will be interesting, though his first moves should be away from the telephone -- at least for now.


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