Legality of NBA forcing Sterling to sell the Clippers
Silver has also recommended that NBA owners effectively force Sterling to sell the Clippers. The NBA has a procedure in place for this extraordinary action, but the procedure contains enough ambiguity that debate among owners is likely. Under article 13 of the league's constitution, three fourths of the teams' ownership groups can vote to terminate a franchise under certain conditions. The conditions are focused on financial matters, such as an owner unable to meet payroll or an owner implicated in financial impropriety. None of the listed conditions, SI.com is told, apply directly to the type of conduct committed by Sterling. That said, article 13 also contains a more general requirement of ethical conduct in business dealings and contracts. Sterling's comments could be deemed unethical. They have also clearly damaged labor relations between the league and players, as players have gone so far as to consider boycotting NBA games. Also, sponsors have dropped deals with the Clippers. Should the NBA's owners vote to expel Sterling, the general requirement language would likely be cited as supplying the main legal justification.
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While Silver said he had not polled the owners, he expressed confidence there will be sufficient support to oust Sterlin. Silver's bold prediction suggests he has the necessary votes. That said, expect there to be some debate among owners. No owner will defend Sterling's racism, but some might question whether article 13 and potentially other authorizing language was intended for this type of transgression. Expect some owners to raise the following four concerns:
1. Neither the Clippers nor Sterling is in financial trouble. Article 13 was designed as an extraordinary remedy for such a problem -- not other problems. While sponsors have dropped their deals with the Clippers and players have contemplated boycotts, the team appears to be in strong financial shape with a deep-pocketed, if reviled, owner. There is no reason to believe that Sterling has committed financial fraud, and while he has been sued over allegations of race, those cases were either settled or unsuccessful.
2.The Clippers are not run in a racist way. Sterling may be extremely bigoted and hold reprehensible views, but there is no reason to suspect that the team itself operates in a racist way. The current Clippers workplace appears to be a productive setting, devoid of allegations by players or other employees that they have experienced racism. Similarly, there are no reports that the Clippers have directed ticket sales and marketing efforts away from minority fans. As a franchise, the Clippers appear to be well-run, which would make it an unusual candidate for termination.
3. Lack of 'morals clause'. Article 13 lists a series of enumerated wrongs, some of which are specific but none of which seem directly relevant to an owner whose racism expressed in a private conversation sparks national outrage. Some owners might argue that if the NBA wanted ouster as a remedy for a situation like this one, the constitution and bylaws' drafters would have included it. Along those lines, there is no "morals clause" in these documents that empowers the ousting an NBA owner. The absence of a morals clause, in contrast to the inclusion of other provisions, could suggest that such a clause was intentionally omitted.
4. Precedent. While Sterling's actions seem unlikely to be replicated by another owner, some owners could worry that if they agree to oust Sterling, different situations might give rise to the same consequence for other owners. Once one owner is ousted, there is precedent to do it again. Mark Cuban recently voiced those exact concerns, calling the situation "a slippery slope."
Sterling suing the NBA and owners
In addition to concern about proper interpretation of the relevant language, some owners may worry about the prospect that Sterling will sue. Sterling, an attorney, is regarded as one of the most litigious owners in professional sports. If there is one owner who would sue over expulsion, it's probably him. Sterling could seek a court injunction preventing the NBA from expelling him. Such a move would likely happen immediately after he is voted out. He could also file a lawsuit raising breach of contract and antitrust claims.
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A breach of contract claim would contend that Sterling's contract with the NBA through his franchise agreement has been unlawfully severed. The NBA, however, is poised to stress that owners agree to language limiting opportunities for owners to sue the NBA and fellow owners. In their franchise agreements, NBA owners agree to "waiver of recourse" verbiage. The language has the effect of eliminating opportunities for owners to pursue legal recourse against the NBA and fellow owners.
An antitrust claim would likely center on both California and federal antitrust laws, and contend that the NBA and its teams have conspired in an anticompetitive way to oust Sterling and make him sell his team at below-market value. Sterling would likely cite reports the NBA may be interested in Magic Johnson buying the Clippers as evidence the league is trying to force a sale to a specific buyer, rather than permitting open bidding. Sterling might also highlight Silver's remarks today that he's confident owners will oust him as evidence of collusive activity between Silver and the owners. If Sterling were to sue under antitrust law and prevail, he would also be entitled to treble damages. Several attorneys familiar with NBA litigation tell SI.com that the possibility of an antitrust lawsuit by Sterling is high.
The prospect of Sterling suing could be a source of worry to NBA owners for at least three reasons:
1. Sterling suing over franchise ouster could undermine the lifetime ban. The ban is intended to separate Sterling from the Clippers and the NBA, and as discussed above, Sterling likely has no viable case against it. If, however, Sterling sues over franchise ouster, it would be a high-profile lawsuit and he would remain in the news. Whatever distancing of Sterling is achieved through a ban could be lost in a high-profile case. It is also a case that could last years, as antitrust cases often do.
2. Sterling suing may lead to pretrial discovery, which could be designed in part to embarrass other owners and NBA officials of any bigoted remarks or beliefs on their part.
Keep in mind, if Sterling is ousted because of racism, he would likely demand that evidence showing that other owners and officials are also racist be shared. He would use such information to portray his penalty as unwarranted and contradicted by the conduct of those who ousted him. Sterling might request emails and other records from owners and officials that depict them in a negative light. Sterling has owned the Clippers for 33 years, which suggests that he has had many interactions -- including private conversations with league officials and owners. If there are other owners who are racist or bigoted, it stands to reason Sterling knows who they are.
3. If Sterling wins or extracts a settlement, not only could NBA owners be on the hook for an expensive fee, but Sterling would seem victorious. The appearance of him winning in court would greatly detract from the important social message accomplished by the lifetime ban.
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