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The NBA community has been buzzing since Los Angeles Clippers owner Donald Sterling allegedly made racist statements caught on tape by his girlfriend, V. Stiviano. From the players staging silent protests, to coach Doc Rivers stating he might not return to the franchise, to fans, celebrities, and President Obama voicing their own opinions, everyone has felt unrest and reacted in many different ways -- the common denominator being that there is no place for Sterling's racism in the league.

The most common question brought up is what can be done legally to remove Sterling from the NBA? ESPN's Lester Munson reviewed the situation from a legal standpoint, and gave a great rundown about what can be done and what procedures are in place in the NBA's bylaws.

First and foremost, the league must verify that the tape is genuine, and the NBA has the power to make Sterling confirm whether or not the voice is his.

In California, it's illegal to record a private conversation without consent, but TMZ, who originally broke the story, also claims that Sterling was aware he was being recorded, as Stiviano often did so for archival purposes. NBA commissioner Adam Silver can require Sterling to confirm (or deny) that the evidence is valid:

Under the terms of Paragraph 24(m)(ii) of the "constitution" that governs the 30 owners of NBA teams and establishes the authority of the owners' commissioner, Silver can require Sterling to respond under oath to questions. The commissioner has "the right to require testimony and the production of documents and other evidence from any Member." As an owner, Sterling is a "member" of the NBA. Sterling and his lawyers could delay answering questions from Silver, but if Sterling refuses to admit or to deny that it is his voice on the tapes, he is in violation of the constitution and would face termination. He has no protection from the U.S. Constitution's Fifth Amendment guarantee against self-incrimination, because he is not facing any charge of any crime.

If the evidence is determined as genuine, Silver can issue a lifetime suspension and a fine:

Under the provisions of the bylaws, Silver has two sets of powers that he may use. Under either, he can issue a lifetime suspension and a substantial fine. Under Paragraph 24(l) of the constitution that was adopted by the NBA owners on Oct. 26, 2005, he can issue a fine of up to $2.5 million, can suspend an owner indefinitely and can order the forfeiture of draft picks. This provision applies to situations that are not covered by specific rules within the constitution. In another provision, Paragraph 35(A)(c), Silver can issue an indefinite suspension and a fine of $1 million to any owner who "makes ... a statement having or designed to have an effect prejudicial or detrimental to the best interests of basketball." If Silver wants to hammer Sterling, he can assert that Sterling's statements are so egregious that they go beyond the misconduct contemplated in Paragraph 35 and allow Silver to assess the greater penalties found in Paragraph 24. Sterling can argue that he merely made a statement, but the statement at a minimum allows a lifetime suspension and a $1 million fine.

The NBA has the ability to terminate Sterling's ownership of the Clippers if 3/4 of the 30 NBA owners vote to do so. 

However, the provisions for termination are outlined for offenses such as fraud, gambling, and financial failure -- there are no options for termination based on racial statements. They could possibly stretch the constitution's language and argue that Sterling failed to fulfill a contractual obligation in such a way that affected the NBA adversely:

Under the terms of Paragraph 13 of the constitution, the owners can terminate another owner's franchise with a vote of three-fourths of the NBA Board of Governors, which is composed of all 30 owners. The power to terminate is limited to things like gambling and fraud in the application for ownership, but it also includes a provision for termination when an owner "fails to fulfill" a "contractual obligation" in "such a way as to affect the [NBA] or its members adversely." Silver and the owners could assert that Sterling's statements violated the constitution's requirements to conduct business on a "reasonable" and "ethical" level.

Any owner or Silver can initiate the termination procedure with a written charge describing the violation. Sterling would have five days to respond to the charge with a written answer. The commissioner would then schedule a special meeting of the NBA Board of Governors within 10 days. Both sides would have a chance to present their evidence, and then the board would vote. If three-fourths of the board members vote to terminate, then Sterling would face termination of his ownership. It would require a vote of two-thirds of the board to reduce the termination to a fine. Terminating a franchise would obviously be a drastic remedy, but the potential of the termination procedure gives Silver and the other owners vast leverage in any discussion with Sterling about an involuntary sale of his team.

Sterling could attempt to take the NBA to court, but in Munson's opinion, could not argue against Silver's decision effectively:

When Silver issues his punishment to Sterling, the decision is final. The constitution provides in Paragraph 24(m) that a commissioner's decision shall be "final, binding, and conclusive" and shall be as final as an award of arbitration. It is almost impossible to find a judge in the United States judicial system who would set aside an award of arbitration. Sterling can file a lawsuit, but he would face a humiliating defeat early in the process. There is no antitrust theory or principle that would help him against Silver and the NBA. He could claim an antitrust violation, for example, if he were trying to move his team to a different market. But under the terms of the NBA constitution, he has no chance to succeed in litigation over punishment.

So what can we make of all this? Basically, there are bylaws in place for termination IF they can successfully argue the "failure to fulfill a contractual obligation in such a way that it affects the NBA adversely" clause. The case would be easier if he had done something illegal like gambling/fixing games, not meeting financial obligations, or committing a crime. However, for the past few years, the Clippers have been a very well-run franchise, and there have been no reports of a hostile work environment, so terminating his ownership might not be a simple task:





Steve Kyler of Basketball Insiders
has been posting some very insightful tweets regarding the legal aspects of this case for those that want to stay informed.

Another option that has been presented is a possible buy-out. A Yahoo report suggested Magic Johnson expressed potential interest in purchasing the Clippers franchise from Sterling. A buy-out could be a less messy option than trying to enact a termination, which would be desirable for all parties involved. However, Magic later denied interest in buying the franchise.

What's next? An NBA press conference to give updates on the Sterling investigation will be held Tuesday in New York at 2 PM Eastern time.

Danielle Hobeika 4/29/2014 12:13:00 AM Edit
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