10 Updates

Should NBA Constitution Prevent Forced Sale Of Donald Sterling's Los Angeles Clippers?

Apr 30 2014, 9:17pm CDT | by

On May 1, the NBA’s Advisory Finance Committee will come together to begin formal discussions on how to permanently remove Los Angeles Clippers owner Donald Sterling from the league through a...

Filed under: news

 
 
 

12 weeks ago

Should NBA Constitution Prevent Forced Sale Of Donald Sterling's Los Angeles Clippers?

Apr 30 2014, 9:17pm CDT | by

On May 1, the NBA’s Advisory Finance Committee will come together to begin formal discussions on how to permanently remove Los Angeles Clippers owner Donald Sterling from the league through a transfer of his ownership shares and a selling-off process thereafter.  NBA Commissioner Adam Silver believes that he not only has the support of all NBA owners, but also that under the NBA’s Constitution the owners have the authority to force a sale of the Clippers.  Courts are reluctant to overturn decisions made by private associations as long as such decisions are made within the confines of their by-laws.  However, there is uncertainty as to whether the NBA has foundation to force Sterling out of his ownership position based on the NBA’s Constitution itself.

From a normative standpoint, a forced sale of the Los Angeles Clippers may be the right move.  Donald Sterling purchased the Clippers for $12 million in 1981.  In a very open and public “auction,” the LA Clippers will demand a price well above and beyond the $575 million team value appraisal provided by FORBES in January 2014.  No matter the tax consequences surrounding such a sale, Sterling will come out a winner financially.

Is a normative foundation enough to oust Donald Sterling and sell off his interest in the Los Angeles Clippers?

Twelve years ago, still in the wake of the tragic events that took place on September 11, 2001, a phrase popped up every so often.  That phrase, “the Constitution is not a suicide pact,” was used in connection with the balance between liberty and security and whether the provisions of the United States Constitution should sometimes be suspended (or at least expanded in a liberal sense) if it was understood to be accomplished for the greater good of the citizenry.  It places the perceived survival of the state and its people above the words contained in a document.

The NBA Constitution is not the U.S. Constitution, but it is also a document by which an entity governs a set of individuals.  An applicable question may be, “If the Los Angeles Clippers will not be a viable business as long as Donald Sterling is the owner, does that provide the grounds, in itself, to force him to sell the team?”

“It’s a good question.  I don’t think the concept would hold up under contract law but it has some merit,” said Chicago-based sports lawyer Cari A. Grieb to FORBES.  “The concept worked for [Abraham] Lincoln during the Civil War when he suspended habeas corpus and others because there was a compelling interest in preserving the State but it is always the highest of legal bars.  It is not 100% crystal clear it would work for Adam Silver, at least not today.  I’ve never seen the concept applied to a private association, such as the NBA”

Even though sponsors have completely cut ties with the  Clippers or at a minimum suspended their relationships, Grieb still questions the applicability of the suicide pact theory and noted that other teams have kept their financial ties in place.  Yet, imagine a court overturning a sale of Sterling’s shares of the Clippers.  It could make today’s controversy seem like child’s play.

“I think once we see how things play out, and if the league truly loses much revenue from lost sponsorships and if there are player boycotts and the like, then, perhaps the argument can come into play; however, in that circumstance, the argument may be more likely tied to a public good argument from the economic benefits of the league than the individual financial interests of owners who entered into the partnership willingly,” added Grieb.

It is important to realize that this is a person’s property (in the form of his ownership interest in a professional franchise) that is being taken from him without his consent.  If NBA Commissioner Adam Silver would not have taken such a hard-line approach, imposing a $2.5 million fine, suspending Sterling for life and stating his intention to take away his ownership of the team, the Golden State Warriors would have been willing to boycott performing in a Playoffs game against the Clippers.  Failing to completely eradicate Donald Sterling, including his ownership shares, from the NBA could also jeopardize the viability of the business of the NBA as a whole if players take a collective effort and refuse to perform.  Adam Silver said what was necessary, whether he had support of the NBA’s Constitution of not and despite his plan including the conversion of one person’s property because it may be in the best interests of the game.

If Donald Sterling attempts to vacate the imposition of a forced sale of his team through the owners’ voting for his termination, he will have to show that the NBA went outside the bounds of the NBA Constitution, reading in language that does not exist and arbitrarily pushing him out without cause.  The NBA, as the drafter of the NBA’s Constitution, may have a tough time defending such a claim if in fact there is no real foundation for such a harsh penalty, since ambiguities are typically construed against those who create such legally binding documents.

Could an argument that ”the Constitution is not a suicide pact” eventually come into play?  While the judicial system is expected to rule relying on precedent and make determinations based on the law and facts presented, public policy does sometimes win the day and create decisions that may not always seem technically right, but appear to be in the best interests of those affected.  As mentioned, it is difficult to persuade a court to overturn a decision made by a private association in the first place.  Due to the circumstances contained in the Donald Sterling situation, the NBA may get a favorable opinion even though it does not necessarily have the strongest justification for the hammer it drops on the current owner of the Clippers.

Want to learn more about the business of sports? Order my book How to Play the Game  and follow me on Twitter .

Follow @DarrenHeitner

 
Update
10

6 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

Cambodia's Famous Battambang Circus
KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Rakyat was to ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

6 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

Sydney FC v West Ham United - Football United New Zealand Tour 2014
KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was broken in ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

6 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

Federal Aviation Administration Bans All US Flights To Israel
KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by the ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

6 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minis ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

6 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

INDIA-CHINA-DIPLOMACY-TRADE
PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in the so ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

Government Weekly Cabinet Meeting
KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 millio ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Datuk Seri Mu ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

Iskandar Johor Open - Previews
JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year invo ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

EurAsia Cup presented by DRB-HICOM - Day One
PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar Scheme 2 ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

7 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara Damansara S ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Global film industry gender-biased: Study
London, July 26 (IANS) A study has revealed that only 22 percent of the crew involved in making 2,000 of the biggest grossing films worldwide over the past 20 years were women.
 
 
Nigeria fourth country in West Africa to report Ebola death
Accra, July 26 (IANS) Nigeria has become the fourth country in the West African region to record a death from the deadly Ebola disease, the country's Health Minister Onyebuchi Chukwu has confirmed.
 
 
Erotic thoughts key to female orgasm: Study
London, July 26 (IANS) Women who miss on orgasm should focus more on their their bodily sensations during intercourse and try to have more erotic thoughts during the act, a fascinating study reveals.
 
 
Consumers who feel 'special' hunt for unique products
Hong Kong, July 26 (IANS) Consumers who attribute their successes to internal character traits rather than hard work are more likely to feel 'special' and hunt for unique products, says a study by a team of researchers involving an Indian-origin professor.
 
 
 

Latest from the Network

Gaza toll rises to over 1000
Gaza, July 26 (IANS) The toll in the 19-day Israeli offensive has climbed to 1,030, with the bodies of at least 130 more Palestinians being recovered from rubble across the Gaza Strip, officials said Saturday. Ashraf...
Read more on Politics Balla
 
Indian women's hockey team ready for New Zealand test
Glasgow, July 26 (IANS) After a comfortable 4-2 win over Canada in their opener, the Indian women's hockey team will take on a higher ranked New Zealand in Pool A of the Commonwealth Games here Sunday. Star of the...
Read more on Sport Balla
 
Steven Seagal a 'real' action hero
Steven Seagal insists he is a ''real'' action hero. The burly actor - who forged his reputation in popular movies like 'Above the Law' and 'Under Siege' - explained that he does many of the action scenes that his peers...
Read more on Movie Balla
 
US closes embassy in Libya, evacuates staff
Washington, July 26 (IANS) The United States closed its embassy in Libya and evacuated the staffers to neighbouring Tunisia amid security concerns in the restive north African country, the State Department said...
Read more on Politics Balla
 
Apurvi wins women's 10m air rifle gold, Ayonika silver
Glasgow, July 26 (IANS) Indian shooters Apurvi Chandela and Ayonika Paul won the gold and silver medals respectively in the women's 10-metre air rifle final of the Commonwealth Games here Saturday. Malaysia's Nur...
Read more on Sport Balla
 
Mangaonkar enters men's squash quarters
Glasgow, July 26 (IANS) Indian squash player Mahesh Mangaonkar entered the men's classic plate quarter-finals of the Commonwealth Games by defeating Welsh Peter Creed 3-0 at the Scotstoun Sports Campus here Saturday....
Read more on Sport Balla
 
India disappoint in women's fours lawn bowls
Glasgow, July 26 (IANS) India were knocked out of the women's fours lawn bowls of the 2014 Commonwealth Games after the team finished fourth in section B losing their last group match to Northern Ireland at the...
Read more on Sport Balla
 
Rahi, Anisa enter women's 25m pistol semis
Glasgow, July 26 (IANS) Indian shooters Anisa Sayyed and Rahi Sarnobat qualified for the women's 25-metre pistol semi-finals after finishing second and third respectively in their qualification rounds of the...
Read more on Sport Balla
 
15 civilians killed in eastern Ukraine
Lugansk, July 26 (IANS/ITAR -TASS) Fifteen civilians were killed and about 60 injured in mortar attacks on Lugansk in eastern Ukraine, media reported Saturday. Lugansk was under massive mortar and heavy artillery fire...
Read more on Politics Balla
 
France hosts international meet for Gaza truce
Paris, July 26 (IANS) France Saturday held an international meeting on ways to end the bloodshed and secure a long-term cease fire in the Gaza Strip where an Israeli military offensive has killed hundreds of...
Read more on Politics Balla