Donald Sterling Strikes Back: His Response To The NBA's Charges
Like Jason in the Friday the 13th movies, Donald Sterling has sprung back to life, slashing away at the NBA in his response to the NBA's charges. So while Shelly Sterling races to sell the Clippers before the NBA's June 3 hearing to terminate the franchise, Donald Sterling's attorney has vowed that he will "fight to the bloody end."
"Bloody" is the perfect word for the fight that Donald Sterling is promising. According to Sterling, his racist rant cannot even be considered as evidence - and he cannot be stripped of ownership of the Clippers for those comments - because they were illegally recorded in a "lover's quarrel". Sterling's fallback position is to highlight past bigoted statements by NBA superstars (like Kobe Bryant and Shaquille O'Neal) and owners (Orlando Magic owner Richard DeVos) that did not lead to termination. Finally, Sterling contends that the NBA has not yet been harmed by the public disclosure of the recording, because the threatened player boycott was averted and the sponsors "quickly" returned after Commissioner Adam Silver imposed his punishment on Sterling.
If Donald Sterling and the NBA do not reach an agreement on the sale of the Clippers before 1 pm on June 3, the NBA will proceed with the hearing and vote to terminate the Sterling family as owners. I expect that just before the hearing is schedule to begin, a deal will be announced. If, however, no deal is struck, I expect that the NBA will terminate the Sterlings on June 3 and that termination would ultimately be confirmed in court. I explain why after the fold.
The NBA Can Use The Sterling Recording As Evidence
Donald Sterling's opening position is that because V. Stiviano recorded Donald Sterling without his consent, the NBA cannot consider the Sterling recording for any purpose and immediately terminate the proceedings against him. California, unlike most states, requires that both parties to a conversation consent to its recording. Sterling relies upon California Penal Code Section 632(d), which provides "no evidence obtained as a result of . . . recording a confidential communication in violation of this section shall be admissible in any judicial, administrative, legislative, or other proceeding." According to Sterling, the NBA's termination hearing is an "other proceeding" that cannot be utilized.
The NBA will almost certainly reject Sterling's argument for reasons both legal and practical. As a legal matter, the NBA constitution specifically provides that the rules of evidence do not apply to termination proceedings. Moreover, the NBA would rely upon numerous federal court decisions that have held that even if a conversation was illegally recorded under California law, California law does not restrict the admissibility of an illegally recorded conversation in federal court. Although those decisions were in the context of a federal criminal trial, not a civil arbitration that (like this one) would be confirmed in federal court, the NBA has a plausible legal basis to consider the recording. Under the Federal Arbitration Act, the NBA's termination decision must be confirmed, even if the NBA commits legal error in its proceedings.
The practical reason to consider the Sterling recording is that it has already been heard by the entire American public. The NBA would be inviting disastrous responses from its players, sponsors, media partners and fans if it ignored what they have all heard.
Sterling's Claim Of A Double Standard Will Not Save Him
In an attempt to save his franchise, Donald Sterling launched an attack on some of the NBA's most high-profile and powerful players and owners. He contends that "the Commissioner’s request to compel Mr. Sterling to sell the Los Angeles Clippers is internally inconsistent with prior punishments, is discriminatory, and is arbitrary and capricious." Sterling compares his proposed punishment to, among others:
Kobe Bryant - "A player was fined $100,000 but not suspended for referring to a referee as a “fucking faggot” on television."
Shaquille O'Neal - "Referring to Yao Ming, a player stated (on a television show): “Tell Yao Ming, ‘ching chong yang wah ah soh.’” And although the statement offended many in the Chinese community, the NBA neither fined nor suspended the player. Last month, that same player—now a former player—was accused of publicly mocking (on Instagram) a picture of a man with ectodermal dysplasia, a rare genetic disorder affecting one’s appearance. Despite being a minority owner of the Sacramento Kings, the NBA has yet to take any action against this individual."
Orlando Magic owner Rich DeVos: "An owner donated $500,000 to the National Organization for Marriage, which advocates around the nation to legally ban marriage between homosexual couples. LGBT advocacy groups called for a boycott. The NBA took no action despite these threats of a boycott. On the topic of HIV/AIDS, the same owner had this to say in an interview 2010: “When HIV first came out President Reagan formed a commission, and I was honored to be on that commission. I listened to 300 witnesses tell us that it was everybody else’s fault but their own. Nothing to do with their conduct, just that the government didn’t fix this disease. At the end of that I put in the document, it was the conclusion document from the commission, that actions have consequences and you are responsible for yours. AIDS is a disease that people gain because of their actions. It wasn’t like cancer. We all made the exceptions for how you got it, by accident, that was all solved a long time ago. . . . That’s when they started hanging me in effigy because I wasn’t sympathetic to all their requests for special treatment. Because at that time it was always someone else’s fault. I said, you are responsible for your actions too, you know. Conduct yourself properly, which is a pretty solid Christian principle.” The NBA similarly took no action."
While it may cause the NBA owners discomfort to have to distinguish between these statements and Donald Sterling's, the distinction is clear. Donald Sterling's statements create a firestorm of controversy that threatened to bring the NBA playoffs to a screeching halt. None of the other statements or actions cited by Sterling touched a similar nerve.
Sterling's "No Harm" Argument Will Not Succeed
Displaying tremendous chutzpah, Sterling argues that his statements have not had a "material adverse impact" on the NBA. According to Sterling, it does not matter that the NBA players threatened to boycott the playoffs, because the players tabled that threat once Commissioner Adam Silver announced his sanctions on Donald Sterling. Sterling similarly argues that the fact that most of the Clippers' sponsors immediately withdrew their support of the team does not count, because those sponsors returned after Silver took his action. Sterling's argument is that the NBA must first suffer devastating consequences from his continued ownership of the team before it can terminate him.
This argument has virtually no chance of persuading NBA owners to vote against termination. The owners know if they were to reject the motion to terminate Sterling's ownership, the players would likely boycott the NBA finals and the sponsors and fans wold flee from the league. The owners would rather face the possibility of a court battle with Donald Sterling than the immediate destruction of billions of dollars in NBA equity from a devastating showdown with its players, sponsors and fans.
Sterling's Stonewall Of The Investigation Is Enough For Termination
Even if Sterling could persuade the owners not to terminate him for his initial misconduct, he will not be able to survive his attempted stonewalling of the investigation. Sterling contends that he cannot be punished for ordering his employees to delete their copy of the Stiviano recording on April 9, because that order (if he gave it) occurred more than two weeks before the NBA began its investigation. Sterling further argues that he cannot be terminated for lying to NBA investigator David Anders on April 26 (two days after the recording went viral) because he genuinely could not recall the content of his conversation with Stiviano.
The coverup, however, is more than sufficient to merit Sterling's termination. The owners will see that when Sterling was publicly exposed, his first reaction was to issue a misleading PR statement that questioned the authenticity of the recording. Sterling's attempt to blame his false denials to the NBA's investigator on a lack of memory do not pass the laugh test.
A Deal Makes Business Sense For All Involved
A continued battle between the Sterling family and the NBA is a lose-lose proposition. If the Clippers are sold now, they will garner a record price. Donald Sterling's attorney has reported that he has been offered of $2.5 billion for the team. Other reports have estimated the bidding to have reached at least $1.5 billion. The previous record for the sale of an NBA franchise was only $575 million.
There is virtually no intrinsic value to the Clippers. The value comes entirely from the willingness of players to play for the team, and the desire of fans and sponsors to affiliate themselves with the franchise. That value would be destroyed if Donald Sterling was allowed to continue to own the team.
If Sterling were to persuade the NBA owners to allow him to keep the Clippers, the team (and the league) would quickly lose value as the Clipper uniform became known as the equivalent of a Klan robe. The NBA Finals might be cancelled due to a player boycott. Even if the Finals went forward, the Clippers' stars (Chris Paul and Blake Griffin) would almost certainly refuse to continue to play. Sponsors would suspend or terminate their affiliation with the league. Commissioner Adam Silver almost certainly would have to leave office following a humiliating defeat.
My expectation is that not even Donald Sterling is crazy and obstinate enough to risk a fight that he cannot afford to win. But even if he is, the NBA owners are not foolish enough to vote to continue his ownership.