Posted on 05/16/2014 7:35:47 AM PDT by SeekAndFind
SI.com has learned that Clippers owner Donald Sterling has hired prominent antitrust litigator Maxwell Blecher, who has written a letter to NBA executive vice president and general counsel Rick Buchanan threatening to sue the NBA. The letter, sources tell SI.com, claims that Sterling has done nothing wrong and that "no punishment is warranted" for Sterling. Blecher also tells Buchanan that Sterling will not pay the $2.5 million fine, which is already past due. Blecher ends the letter by saying this controversy "will be adjudicated."
Blecher's letter makes clear what many have anticipated: Donald Sterling will not go down without a fight and that he is taking active steps toward litigation. A letter of this type is considered a precursor to the filing of a lawsuit. Blecher's letter offers no ambiguity about Sterling's intentions.
"We reject your demand for payment," the letter tells Buchanan, who on May 14 informed Sterling by letter that he must pay the $2.5 million fine.
Blecher's letter goes on to identify two basic legal defenses for Sterling.
First, Blecher claims that Sterling has not violated any article of the NBA constitution. The letter curiously references Article 35, which governs players' misconduct, and several other provisions. The NBA is expected to argue that Sterling violated Article 13(d) among other provisions. Article 13 (d) bars owners from violating contractual obligations, including the obligation that owners no engage in unethical conduct or take positions adverse to the NBA. Blecher does not explain how he intends to prove Sterling's racist remarks captured on the secret recording -- followed by Sterling's incendiary remarks to Anderson Cooper about Magic Johnson -- do not give rise to unethical conduct or positions adverse to the NBA.
(Excerpt) Read more at sportsillustrated.cnn.com ...
I personally find Sterling disgusting (my opinion of the rest of the NBA isn’t much higher). But last I checked possession is 9/10ths of the law. Sterling is the rightful owner of the Clippers and violated no laws. Perhaps with the threatening his own lawsuits Sterling is craftily trying to get a higher price for his team.
In the meantime, if people don’t like the fact that he is the rightful owner of the franchise, fans can stop watching the Clippers and paying for tickets. Players and employees can quit the organization . Sponsors can stop advertising. It’s his team and no one should be allowed to confiscate it from him. Property rights trump political correctness.
When it’s something that simply will not happen you’re not talking principle you’re talking strawman.
The league won’t want him selling for dirt cheap, that devalues the other franchises, the most recent sale always sets the basis for the next one, so if Sterling’s price is too low that costs the next guy to sell money. They (the league that is, because they had to take it over) sold the Hornets for $338 million, and that was a broke franchise with no audience to speak of in a small city. The Clippers will probably sell for closer to half a billion, big city, big audience, good TV contract. Actually if Sterling really wants to make the league suffer he’ll go out of his way to only get low-ball offers the league won’t approve of. That’d give Silver migraines.
Well for one thing he doesn't own the Staples Center.
Second, that would be grounds for the league terminating his ownership under Article 13 (h).
“Blecher does not explain how he intends to prove Sterling’s racist remarks captured on the secret recording — followed by Sterling’s incendiary remarks to Anderson Cooper about Magic Johnson — do not give rise to unethical conduct or positions adverse to the NBA.”
I’m not a lawyer, but I bet I could come up with some decent reasons with about 5 minutes of effort.
Article 13(d) says:
” The Membership of a Member or the interest of any Owner may be terminated by a vote of three fourths (3/4) of the Board of Governors if the Member or Owner shall do or suffer
any of the following:
(d) Fail or refuse to fulfill its contractual obligations to the Association, its Members, Players, or any other third party in such a way as to affect the Association or its Members adversely. “
How does that apply to a private recording? When did Sterling fail to pay a player?
Other options: Say the NBA is inconsistent in enforcement, say he took no public adverse action, etc...
Problem is all he really “owns” is a revokable license. That’s what a franchise really is, it’s part of a whole. And remember they COULD (won’t want to but it’s possible) contract the team. No sale at all just end the Clippers, it would be a bad move on their part (contraction is a 4 letter word) but it is available.
If the stuff in your second paragraph comes to pass that actually makes it easier for the NBA to force him to sell. Since the move is entirely to protect the value of the league, if one team is losing sponsors and fans and revenue at a serious rate that proves he is a detriment to the league. It IS NOT his team, it’s his revokable license.
What?
Franchises are revokable licenses to participate in a larger body. All franchise structures include some possibility of the larger body revoking your license, possibly letting you sell to somebody else, possibly straight confiscation with no compensation.
I hope he has been recording all the conversations with the NBA head office. If one of them says anything untoward he can release it through others and get them fired and stuff.
I guess that’s how things are done these days.
They could, but I believe that the NBA would have to prove that Sterling intended to do so and that would be the hard part. Willfully violate any of the provisions of the Constitution and By-Laws, resolutions, or agreements of the Association.
He owns the team. It may be a franchise operation, but Sterling owns it. Just like the analogy I made about owning a Mcdonald’s franchise operation. You own the restaurant. And McDonald’s cannot take it away from you, certainly not for doing things Sterling was caught doing. Bad behavior isn’t always illegal behavior. Kobe Bryant and Magic Johnson and countless others in the NBA have been caught in bad behavior and they weren’t kicked out of the NBA. This whole issue it seems to me is about political correctness.
As I already told you, McDonalds CAN take it away from you. They do on a fairly regular basis, usually without even paying you. That’s life under the franchise system, you license, you never really own.
RE: Just like the analogy I made about owning a Mcdonald’s franchise operation. You own the restaurant. And McDonald’s cannot take it away from you,
Let’s say you are a supporter of the KKK and you are also a McDonald’s franchise owner, does McDonald’s not have the legal right NOT to have their name associated with your franchise because of this?
You still own the restaurant, but NOT the right to use the McDonald’s name.
So let’s see if we can come to an agreement here regarding what can and cannot be done fairly:
1) The NBA has the right NOT to associate their name with you because of what you did.
2) The NBA can pressure you to sell your team, but you are not legally obligated to succumb to their pressure.
As a result, you can’t associate the Clippers with the NBA even if you still own the team ( just like a McDonald’s franchisee cannot use the name of McDonald if they for any moral reason, refuse to be associated with you ).
3) Because of #2 above, what options do you have?
You’ll be legally obligated, but they don’t force you to take the first offer, and the deal has to be approved by the league.
As a result they can contract the team, or “buy” the team from you if you just can’t seem to scrape up a good offer yourself (ref: New Orleans Hornets).
Your options are to not anger the league. A lot of the problem Sterling is having now stems from his long history of irritating the league without crossing the punishment threshold. Decades of fielding a bad team, sometimes making moves that seem to have no other purpose but to make the team bad; heckling his own players loud enough to be picked up by the network microphones (remember he likes being courtside); other racially charged issues that managed to avoid the national spotlight. The question for Sterling has always been when he’d finally be involved in something big enough for the league to land on him, not if. For 30 years people in the league have been waiting for their excuse on Sterling. Any other owner does this they get fined, maybe suspended from games for a couple of weeks. But they don’t have Sterling’s baggage.
Actually you probably don’t still own the restaurant. McD’s wants franchise holders to rent their locations, it makes for a lot less paperwork if they have to revoke your franchise. At that point they take over the lease and you get to go away. It’s all very well structured to have as few assets as possible.
Sterling has a lot of “FU Money.”
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YES HE DOES .. and I certainly hope his ass is chapped enough to fight them to the end ...it’ll be a great object lesson for all of the people on our side of various issues that cave at the first hint of trouble.
If his private conversation had remained private, it wouldn’t have hurt business at all.
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The NBA appears to be organized as a non-profit corp ... see Article 2 , PRINCIPALS OF ORGANIZATION ,, in part it reads “The Association shall not be operated for profit.” , I’d say the league is screwed on any argument involving league revenue ,, after all they play the game just for fun dontcha know....
But it didn’t remain private.
Was there intent on his part to make it public?
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Article 13 ,
(a) Willfully violate any of the provisions of the
Constitution and By-Laws, resolutions, or agreements of the
Association.
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intent is clearly in play ,, and how can a private conversation , be intended to harm
Good catch.
That’s life under the franchise system, you license, you never really own.
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Stripping the franchisee devalues EVERY franchise , it’s a terrible move ... you’re one computer generated fake recording away from Magic Johnson buying you out for peanuts.
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