Why NBA can’t make Sterling sell

By R.E. Graswich

It’s time for a deeper look at the NBA’s rhetorical pie fight with Donald Sterling.

While the league’s press conferences have been theatrically impressive, the outrage and indignity don’t add up to much.

The league has portrayed its “lifetime ban” of Sterling as the ultimate sanction, the nuclear option. In fact, it’s mostly a creampuff. Anyone who uses the words “lifetime ban” in connection with an 80-year old man can’t be too serious.

As for the ultimate question – removal of Sterling as owner of the Los Angeles Clippers because of his bigotry – it’s a nonstarter.

The NBA can’t force Sterling to sell his team because of idiotic babblings he made in private. There is no mechanism to remove the team from Sterling’s control if he refuses to sell.

Over the past week, the league has convinced a large number of media outlets that its internal rules allow for the extraction of an owner under certain circumstances, financial insolvency being the big one. Unfortunately for the NBA, a group’s bylaws can’t brush aside federal antitrust law.

As noted in my book, “Vagrant Kings: David Stern, Kevin Johnson and the NBA’s Orphan Team” (I Street Press, 2013), the NBA and other sports leagues have tried for years to get federal courts to grant them special rights under antitrust rules.

The NBA would need an antitrust exemption to pry the Clippers from Sterling’s grip. Without the exemption, the league would be acting as an illegal cartel – in violation of antitrust law.

Basically, the NBA is a trade group comprised of 30 separate companies. For years, the NBA and other sports leagues have sought a legal status called “single entity treatment.” This would allow them to act as one organization with a single ownership, rather than 30 separate companies. Lawyers call single-entity treatment the “Shangri la of antitrust immunity,” because it would allow leagues to behave as a cartel without breaking federal antitrust rules, which ban cartels.

Each time the leagues have gone to court, they have lost. Single entity treatment has been denied. (Baseball is the outlier, having been granted antitrust exemption by the U.S. Supreme Court in 1922.)

Without single entity treatment, the NBA would become an illegal cartel if it stripped Sterling of his team. Sterling would be entitled to triple damages, which could more than double his present fortune, estimated at just under $2 billion.

Legal inconveniences aside, how would the NBA remove the Clippers from Sterling’s hands if he refused to sell? There’s no easy way.

The trade group can’t simply claim Sterling’s ownership documents are void and put his property up for sale. Sterling would sue. The Clippers could not be transferred under such circumstances.

And the NBA can’t use the nuclear option – removing the Clippers from the league schedule and dispersing the players to other teams. Again, Sterling would respond in court, and position himself and his heirs to enjoy triple damages.

Assuming they land in court, what argument will the NBA use? Here’s another big problem. The recording the NBA has used as the foundation for its sanctions against Sterling may have been illegally produced (in California, consent must be given for recordings made in private settings).

The NBA can’t expect a judge to consider removing Sterling’s property rights with these facts: Well, your honor, there’s this gossip website called TMZ, and on it we heard this man who we think is Sterling in what sounds like an illegally recorded private conversation, but we were really offended by some of the stupid things he was saying.

In any court action against Sterling, the NBA’s history would come into play. The league would be asked why it took no action against Sterling’s bigotry for three decades. Troublesome questions would be raised about the opinions of other team owners. Sterling could allege that his views were not unique, as demonstrated by the league’s silence on the subject for 33 years. The NBA could be made to look very hypocritical.

So the NBA has taken its best shot at its bigoted owner. There’s been much solidly indignant publicity on the new commissioner’s behalf. The league has hit Sterling squarely in the face with a cream pie.

Now the NBA’s best hope is that Donald T. Sterling dies laughing.

Posted in The Book

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R.E. Graswich