Tag: Donald Sterling

Donald T. Sterling, Rochelle

Donald Sterling won’t agree to Clippers sale, instructs attorney proceed with lawsuit against NBA


You thought Donald Sterling would go quietly? Why? Just because he said he would?


What we all hoped would be an inconvenient delay has turned into the worst-case scenario.

Dan Woike of The Orange County Register:

Donald also won’t sign off on the sale of the team to Steve Ballmer, according to the Associated Press.

Whether Donald needs to agree to that sale is a different question for himself, Shelly Sterling and their lawyers to solve. The Sterling Family Trust owns the Clippers and reportedly specifies when one spouse can take control – and Shelly had Donald ruled mentally incapacitated, giving her power to set up the sale of the team.

Donald Sterling’s first move would be to regain his share of the trust, and he’s going to try to do that reports Ramona Shelburne of ESPN.

Through her Sterling also released this statement:

“From the onset I did not want to sell the Los Angeles Clippers. I am extremely sorry for the hurtful statements I made privately. While this is not an excuse for the statements, like every other American, I never imagined that my (they) would be made public. I believe that Adam Silver acted in haste by illegally ordering the forced sale of the Clippers and banning me for life from the NBA. Action taken by Silver and the NBA constitutes a violation of my rights and fly in the face of freedoms that are afforded to all Americans. I have decided that I must fight to protect my rights. While my position may not be popular, I believe my rights to privacy & preservation of my rights to due process shouldn’t be trampled. I love the team and have dedicated 33 years of my life to the organization. I intend to fight to keep the Team.”

His real challenge is this — the Clippers are a franchise of the NBA and Sterling, on multiple occasions, agreed to the NBA’s rules, processes and adjudication systems. This is not the government trying to strip him of his business, this is his partners voting him out of the company. Very different things. Few legal experts think Sterling stands much of a chance here.

It is his challenging of Shelly Sterling and taking away his authority in the trust that is more interesting. That will be decided in a California probate court.

If he can do that, he would have the leverage to block the sale. If Donald Sterling fails in probate, then both the sale and the indemnity that Shelly Sterling offered the league — saying the Trust would pay any money Donald Sterling wins suing the league, meaning he is basically suing himself — remain in place.

If Sterling does regain say in the trust the NBA will re-schedule its vote to remove Donald as the Clippers’ owner. Yes, the league has a little egg on its face for allowing Sterling to continue owning the team for whatever the extra time becomes, but that’s not a huge deal. The other owners will almost surely vote out Donald.

If Donald is voted out, the ramifications would be wide. Shelly would also lose her ownership of the team, meaning she couldn’t sell the team to Ballmer (and couldn’t agree with him to preserve her place as owner emeritus). The NBA would take over the sale and then give the proceeds to the Sterlings.

A temporary injunction could delay or maybe even stop that process, but Sterling is unlikely to get an injunction granted.

Sterling is on his way out one way or another. It’ll just go through the courts rather than happen smoothly.

NBC News: Donald Sterling to file $1 billion antitrust lawsuit against NBA

Donald Sterling

It was not if, it was when. And when was Friday afternoon.

NBC News has learned banned NBA owner Donald Sterling plans to file (likely Friday afternoon in Los Angeles) an anti-trust and other violations lawsuit against the NBA seeking $1 billion plus treble damages. The goal of this lawsuit is to seek damages from the NBA for his lifetime ban and the termination of his ownership (something the league has worked toward but has not been voted on by the other owners, the hearing is set for June 3).

Sterling may file another lawsuit is to block the sale of the Los Angeles Clippers to former Microsoft CEO Steve Ballmer, reports Adrian Wojnarowski of Yahoo Sports via Sterling’s attorney Max Blecher.

The NBA announced its deal with Shelly Sterling and the Sterling Trust is official and the sale to Ballmer can go through. As part of that the NBA has agreed to drop its effort to vote the Sterlings out as owners in exchange for indemnity — meaning the Trust would pay any NBA losses to Donald Sterling in court. Meaning Sterling is essentially suing himself if he goes through with this.

Donald Sterling and his wife Shelly each owned half of the Los Angeles Clippers through the Sterling Family Trust (he was the recognized primary owner by the league) but she had him declared mentally incapacitated, making her the sole trustee and clearing the path for the sale of the team to Ballmer for $2 billion.

Donald Sterling’s lawyers have vehemently denied he is incapacitated.

Sterling has been expected from the start to fight the forced sale of this team by the league. NBA Commissioner Adam Silver came out in the wake of a recording made public by TMZ (and later a Donald Sterling interview on CNN) and banned Donald Sterling for life, fined him $2.5 million and started the procedure to strip him of ownership.

Shelly Sterling set up the sale with Ballmer (this would be a cleaner process for the league that removing the Sterlings as owners and selling the team themselves). To do that she had to have Donald declared mentally incapacitated so she had sole control over the family trust, allowing her to execute the sale. Both sides here confirm that Donald met with neurologists in the last month who tested him — the results of those tests are what is in question.

TMZ is reporting Sterling is battling Alzheimer’s disease.

Sterling’s attorney told Rachel Nichols of CNN that is a vast overstatement of what was found. This is from her twitter account.


Sterling always says he doesn’t want to start a fight as he starts one. Not reading much into that.

All of this — Sterling’s mental capacity, the legality of the sale to Ballmer, whether the league can remove Sterling as owner and sell the team themselves if this first sale falls apart — is all going to be decided by the courts now.

As we always expected.

Report: If Sterlings can complete sale agreement by Tuesday league hearing would be postponed

Donald Sterling

It’s always been a cleaner, easier process for the NBA if the Sterlings just sold the team.

That may or may not be happening — Shelly Sterling and her attorneys are going through the process, his attorney says he has changed his mind about selling and has revoked her right to sell — but the league is open to the idea still.

If the Sterlings can really come to an agreement to sell the Clippers by Monday night — one that completely ends Donald and Shelly Sterling’s affiliation with the NBA — the hearing to revoke their franchise ownership June 3 (next Tuesday) could be postponed, reports Michael McCann at Sports Illustrated.

According to sources, if Sterling presents the NBA with a completed agreement to sell the Clippers before Tuesday’s meeting, and if the NBA has a “favorable impression” of both the dollar amount and the incoming owners, the league would postpone the hearing until it can formally vet the purchase, sale agreement and pending owners. If the NBA later approves the transaction, the Clippers would be sold and Sterling, along with his wife and co-owner, Shelly Sterling, would no longer have any affiliation with the NBA.

Sources tell SI.com that the NBA’s top priority is for ownership to be transferred, and the league would welcome the exchange occurring voluntarily. A voluntary transfer would avert a potentially contentious hearing next Tuesday and, more importantly, avert the potential of Sterling filing a costly and lengthy lawsuit against the NBA and its owners.

This follows what NBA Commissioner Adam Silver said at the NBA Draft Lottery:

“It is their team to sell, and so he knows what the league’s point of view is, and so I’m sure if he wanted to sell the team on some reasonable timetable, I’d prefer he sell it than we go through this process.”

There are reportedly six bids at least in. Former Microsoft CEO Steve Ballmer reportedly has bid $1.8 billion (he is worth $20 billion according to Forbes) and Ramona Shelburne of ESPN says he may be the frontrunner.

A powerhouse group with David Geffen, Oprah Winfrey and Larry Ellison have teamed with two of the Guggenheim group’s big players (those are Magic Johnson’s investors). Grant Hill’s group is said to have bid $1.2 billion. Don’t count out the reported “richest man in Los Angeles,” medical researcher and business man Dr. Patrick Soon-Shiong, who already owns four percent of the Lakers and has been vetted by the league.

A number of the bidders have reportedly already been vetted by the league in other deals and would quickly move through the approval process with the league.

All this only works if Donald Sterling agrees to the sale — if he is going to take the league to court over this there is no reason for the league not to go through with the process of stripping him of his franchise. All of it started with Sterling’s prejudiced comments in a recording leaked to TMZ, then later in a separate CNN interview, comments that caused a backlash among fans, players and team sponsors.

Donald Sterling remains the official controlling owner in the eyes of the league (Shelly owns half through a trust) and as part of his response to the league’s charges his attorney said he planned to fight the forced sale “to the bloody end.” He has complained about the 33 percent capital gains tax he would have to pay on a sale.

The question is will he feel that way when a $1.8 billion offer (or more) is on the table?

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

Memphis Grizzlies v Los Angeles Clippers - Game Four

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.

Shelly Sterling says she wants to maintain ownership of Clippers. That’s a wildcard for NBA.

Memphis Grizzlies v Los Angeles Clippers - Game Four

Shelly Sterling, Donald Sterling’s wife of 50 years, owns half of the Clippers (thanks to California law). It’s always been a potential complication in the league’s stated goal of forcing a sale.

Especially since she wants to maintain control of the team.

She told the Los Angeles Times she wants to maintain control of the Clippers.

Los Angeles Clippers co-owner Shelly Sterling said Wednesday that she believes she is legally entitled to maintain ownership of the NBA team and will attempt to do so, even as the pro basketball league pushes to remove her husband from the team he has owned for 33 years.

Sterling described her long tenure as a “die-hard” fan of the Clippers and said she believes that the sanctions against Donald Sterling — which included a lifetime ban and $2.5-million fine — do not apply to “me or my family.”

NBA Commissioner Adam Silver has said that this is not acceptable, that the family cannot maintain control of the team.

He’s right. She’s just serving as his proxy here.

Shelly is far from clean (although proving it in a legally acceptable way will be more difficult, she has less of a paper trail). The night after the recording of Donald making racist statements went public she had dinner with her husband and yelled “he’s not a racist” at the cameras. She was a partner with Donald in his real estate firm and in the lawsuits brought against him a former employee said Shelly used to pose as a government inspector to take a census of the races in their buildings, and to harass some tenants. She allegedly has used plenty of racist language herself. She is far from clean.

For the league, from a business perspective, the sponsors will not care which Sterling owns the team they will pull out. Same from the players — Doc Rivers found out and he’s not likely to stick around to work for her. Most fans will have the same reaction. The league is moving to wrest control of the team from Sterling’s people, with long-time employee and team president Andy Roeser taking a leave of absence and the owners looking to install a new CEO to oversee the operation.

Reportedly Donald signed ethical contracts with the league, which gives the league solid footing on him in the effort to force a sale. Forcing those on her could prove more problematic. The above instances were in settled cases.

This is how the Sterlings fight. They are not going to easily give up control. They are going to work in concert. Their egos are too wrapped up in owning the team. Plus, if Sterling (who is battling cancer) passes away during before the team is sold the rest of his family could save hundreds of millions on capital gains taxes. They are not going to go quietly.

The league needs to have a real stomach for this fight, because the Sterlings count on bullying you in the courts. The other owners are united, but this is not going to be simple and clean.