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The NBA's legal trouble in kicking Donald Sterling out

Did Adam Silver's decisive penalty against Donald Sterling indirectly make it more difficult to ban Sterling for good? Perhaps, say two legal analysts.

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Kirby Lee-USA TODAY Sports

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The American public has spent two weeks praising Adam Silver's first act of decisiveness amid the ugly, damaging and very public spectacle created by Donald Sterling. The NBA commissioner moved swiftly, firmly and within the legal confines of his job after recordings of Sterling's racist remarks became public. Silver banned Sterling for life and fined the Clippers owner $2.5 million. These actions, completely within Silver's right as commissioner, comprised not only the most severe penalty the league has ever seen, but one of the harshest levied on any team owner ever.

For this, Silver won praise from almost everyone, including myself. His decision, especially regarding the maximum fine, was brilliant. While many people -- including Silver, it can be assumed -- would have preferred to bury Sterling under a much larger fine, Silver knew as a lawyer to stick to the maximum penalty. Less restraint might have given Sterling reason to take the league to court, where he's been characterized as "tyrannical." (That he's doing it anyway is surprising and may be a flawed legal strategy.) Silver was as severe as he could be without going over the top, and the result was one that everyone -- or everyone but Donald Sterling -- could cheer: a lifetime ban, $2.5 million fine, NBA stands strong against racism, fans rejoice.

But is it possible that in his valiant proclamation, Silver may have unintentionally hung his owners out to dry? When he urged the remaining NBA ownership to force a sale of the Clippers, did Silver inadvertently force a vote that the owners otherwise could have avoided for fear of the unwanted and possibly quite damaging consequences? Consequences of which some of the owners -- most notably Mark Cuban -- were aware?

When I first began looking into Sterling's options for fighting a sale, I was expecting a brick wall of legal stipulations and bylaws. Otherwise, why would Silver have been so emphatic? For the first few days, I felt confident.

One of the prevalent theories on Sterling's possible actions involves making the Clippers part of his impending divorce. The belief is that, because the Clippers are owned by a family trust, the team would be tied up in the divorce as Sterling and his wife divide up their property.

I spoke with attorney Alan Fanger, a sports legal analyst out of Boston, and he believes the divorce will be a non-factor. First, Fanger explains that if an asset in a divorce is a franchised business, as the Clippers team is, and the owner has his rights stripped by a third party -- the other owners, in this case -- the spouse loses the right to step in and claim she will be given the team in the divorce.

But what about it being owned by the family trust? Also not a big deal, as it turns out: all sports teams are owned by trusts or corporations for liability protection. Sterling, if not the trustee of the trust, is probably the largest beneficiary, who in turn has the right to control and direct the trustee. This takes us back to reason No. 1: Sterling has his rights stripped and his wife cannot claim she'll get the team.

How do we then explain Shelly Sterling's desire to keep her share of the team? Based on what legal analyst Michael McCann said, her quest doesn't seem likely to succeed. If Sterling were to try and transfer ownership to his soon-to-be ex-wife, the league would have to evaluate her and approve the move. McCann doesn't see this as a likely option.

So, the divorce thing doesn't seem too worrisome. But what if Sterling files for an injunction and sues raising antitrust claims? Does he have a chance to actually win?

Fanger told me this, too, isn't a problem for the NBA. In order to be granted an injunction, a court has to find that the person filing for said injunction will be likely to win the case. Fanger said the chances a judge will rule in Sterling's favor are slim to none.

Under Article 13 of the NBA constitution, the owners have the right to strip a franchise from an owner with a three-fourths vote if that owner was found to be running the franchise in a way that is harmful to league interests. The owners pretty much have this one locked up, according to Fanger, because they can point to the sponsors that bailed on the team before the suspension, as well as threatened player and fan boycotts and the likelihood that future free agents would be unwilling to play for Sterling.

But this isn't the end of the story, and these issues may not end up being enough to win in a court of law.

While Article 13 does give the owners a right to vote Sterling out, it applies more as a remedy for rather than a preemptive strike against a team's financial problems, McCann said. The Clippers currently have no financial worries, and Sterling basically has a Scrooge McDuck-type silo filled with money. More than that, there is no implication that Sterling has any ethical issue regarding his handling of the business aspect of the team.

the league may have to prove that Sterling has already been actively racist when running the Clippers.

And what about the fact that Sterling is a deplorable racist, you ask? Fair enough. He is. I don't think anyone is questioning that. His housing discrimination lawsuits certainly illustrate this, though Sterling settled them for record-setting sums without officially admitting wrongdoing.

But given the interpretation of Article 13, the league may have to prove that Sterling has already been actively racist when running the Clippers. Complicating matters, it's already been proven in a court of law that Sterling hasn't been. Yes, Elgin Baylor's 2009 lawsuit was originally for wrongful termination and discrimination based partly on race. But Baylor later dropped the race claims, and more than that, the jury in the case ruled unanimously in Sterling's favor.

If this is the judge's interpretation again, Sterling seems to have a very real chance to win a lawsuit he levies against the NBA for breach of contract. I believe the other owners are aware of this, and I believe Adam Silver inadvertently put them between a crag and a jagged cliff.

Thanks to Silver's emphatic call to the owners, if they don't vote Sterling out now, owners won't be comfortable making the case that they did so to avoid a court case they might not win. It won't matter that the decision not to oust Sterling may be the best way for the NBA to come out on top. It won't matter that the owners considered the possibility of Sterling not only remaining with the team, but also being awarded a bonus by paying him damages, and deemed it unacceptable. No, none of that will matter.

Our society reacts viscerally in instances like this one. The NBA owners will be branded as accepting of racism at best or being racist themselves at worst, neither of which is a good look for the NBA. To avoid that destruction and take the onus off the league, the owners have to vote Sterling out and let the legal system do what it will. Even if the end result could be that Sterling stays right where he is.


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