Donald Sterling has options to weigh after NBA ban
Donald Sterling has been shamed, fined $2.5 million and banned for life by the NBA for his incendiary remarks about race.
But none of that changes the fact that Sterling still owns the Los Angeles Clippers, which gives him options.
“This may set up nicely for him,” said David Carter, executive director of USC’s Sports Business Institute. “He could ride off into the sunset a la Frank McCourt.”
Much like the former Dodgers owner, Sterling might be forced to sell his franchise at an opportune moment, shortly before the NBA renegotiates its lucrative national television contract. An auction-like frenzy could drive the price toward $1 billion.
Or the historically litigious Sterling might turn his back on that staggering profit, choosing to stand and fight.
“If he truly doesn’t want to sell, I’m going to guess he could tie this up for the rest of his life,” said Richard Sheehan, author of “Keeping Score: The Economics of Big-Time Sports.” “It would be an absolute disaster.”
Attempts to reach Sterling for comment Tuesday were unsuccessful, so his immediate plans remained unclear.
Shortly before NBA Commissioner Adam Silver announced the league’s punitive actions, however, Fox News contributor Jim Gray reported that Sterling had told him he would not sell.
His resolve might waver if, in coming days, at least three-quarters of the league’s owners vote to oust him. And if more sponsors follow CarMax and State Farm in severing relations with the team.
“Something dealing with race, you don’t recover fully,” said David E. Johnson, chief executive of Strategic Vision, an Atlanta branding agency. “As long as he is the owner, the Clippers will never get past that.”
Sterling’s decades-long climb into the ranks of L.A. billionaires began during the Depression in Chicago, where he was born Donald Tokowitz to an immigrant family that moved to Boyle Heights when he was young.
After working his way through law school — and changing his last name to Sterling — he spent years as a divorce and personal injury attorney before purchasing a Beverly Hills apartment building and launching a more lucrative second career.
By the late 1990s, Sterling had built one of the largest real estate empires in Southern California. He purchased the Clippers in 1981 for $12.5 million and moved them from San Diego to Los Angeles three years later.
Though the team struggled to win for many seasons, the NBA’s rising popularity helped boost Sterling’s personal fortune, which Forbes recently estimated at $1.9 billion.
Last year, the Sacramento Kings were sold for $535 million. The impending sale of the Milwaukee Bucks is expected to bring $550 million.
Sports business executives say a major-market franchise should be worth significantly more. In addition to the league TV contract, the Clippers can seek a new local deal after the 2015-16 season.
“The timing is right now because the Clippers are ascending and the Lakers are on the descent,” said Sheehan, the author who also teaches sports economics at the University of Notre Dame. “Instead of the Lakers being ‘Showtime,’ the Clippers are ‘Showtime.’”
NBA owners have some precedent for forcing Sterling out. Through the 1990s, Major League Baseball twice punished Cincinnati Reds owner Marge Schott for racist and inappropriate comments.
Fellow owners reportedly worked behind the scenes, persuading Schott to sell her stake in the team.
Even if the NBA board of governors gets its three-quarters vote, Sterling might not go quietly — his history of legal ferocity extends far beyond that early career as a lawyer.
In 2005, he prevailed against an employee, Sumner Davenport, who sued him for sexual harassment. Six years later, he successfully defended himself against charges of employment discrimination brought by former Clippers General Manager Elgin Baylor.
Sterling has also suffered losses in the courtroom.
The Housing Rights Center in Los Angeles filed a discrimination suit against him in 2003 and negotiated a confidential settlement. Sterling later paid $2.7 million to the Justice Department and tenants groups to end another discrimination suit.
In the former case, U.S. District Judge Dale S. Fischer described the “scorched earth” tactics of Sterling’s legal team as “often unacceptable, and sometimes outrageous.”
Over the years, Sterling has sued a former mistress and two former coaches. Legal experts would not be surprised if he takes on the NBA.
“It’s distasteful, it’s disgusting, but what he said is still ostensibly private conduct,” said Robert Boland, a New York University sports management professor.
An antitrust action would be problematic for the league, but Sterling’s franchise could suffer in the process.
“If he doesn’t sell, will Doc Rivers remain?” Sheehan asked, referring to the Clippers’ popular coach. “Will the players remain? Is he ever going to be able to sign another quality free agent?
“All of these things are going to damage the value of the franchise.”
The impending off-season could give Sterling and the league a chance to settle matters.
If the beleaguered owner decides to sell, sponsors could be lured back. Upset coaches and players could be mollified.
And fans would probably embrace a new boss.
“He would be seen as someone coming in to revive the franchise,” Carter said. “People would rally around him.”
Times staff writers Nathan Fenno, Bill Shaikin and Andrea Chang contributed to this report.
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