Klein & Wilson

What to make of Donald Sterling's antitrust lawsuit

The business world of sports management received a shock when it was announced that the Los Angeles Clippers, which were recently put up for sale after the racist comments made by owner Donald Sterling, were sold to former Microsoft CEO Steve Ballmer. The purchase price is reportedly $2 billion, making  the impending sale the largest for an NBA franchise. In fact, the sale dwarfs the $550 million sale of the Milwaukee Bucks, made only several weeks ago.

To complicate matters, the circus/cesspool of controversy that has surrounded the Clippers also included an antitrust lawsuit against the NBA that was initiated by Donald Sterling himself. In his complaint, he accuses the NBA of meting out a punishment that was “capricious, arbitrary, unreasonable, and grossly discriminatory compared with ‘similar’ speech offenses.” Essentially, Sterling did not believe that he should be exiled from the NBA owner’s suite because of his comments. 

The NBA responded by saying that Sterling’s lawsuit was “predictable and completely baseless.”

But with the sale potentially netting Sterling (and the family trust that owns the team) about $1.4 billion, the NBA will likely file a motion to dismiss Sterling’s lawsuit. Basically, the transfer of ownership will make the lawsuit moot. Also, since the sale of the team was not exactly forced, given that the ownership meeting scheduled for June 3 had not taken place yet. Further, Sterling’s wife, Shelly, who was appointed the lone trustee who could negotiate the sale, reportedly chose Ballmer’s bid from six others apparently without any coercion.

Ultimately, it would be difficult to argue that the NBA’s purported punishment could give rise to a legal claim given the lack of ownership, and windfall, the Sterlings will realize.

Source: latimes.com “Donald Sterling’s antitrust suit against NBA adds new wrinkle to saga,” Nathan Fenno et al, May 30, 2014

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