May 19, 2014

    Few options for Clippers' owner to block sale


    LOS Angeles Clippers' owner Donald Sterling and his wife may have few options to block a forced sale of the National Basketball Association (NBA) franchise amid an uproar over racist comments that led to his ban by the league.

    A forced sale of the Clippers, said to be worth more than a half billion US dollars, requires approval of 75 per cent of the owners, or 23 of the league's 30 teams.

    Sterling, an 80-year-old real estate billionaire, has not said whether he will sue, but antitrust and state franchise laws may provide a slim chance of success, and his wife's claim of a 50 per cent stake in the team may not give her much leverage.

    "A lawsuit would only delay the inevitable," said Daniel Lazaroff, director of the Sports Law Institute at Loyola Law School in Los Angeles. "He has become a real problem for the league and any intelligent court would be deferential to a vote by a three-quarter majority of the NBA's board of governors."

    Sterling bought the then-San Diego Clippers in 1981 for US$12.5 million. The team is now said to be worth more than US$550 million (S$688 million).

    If he sues, he may try to bring an antitrust claim, a strategy used in the past by other sports franchisees against their leagues, said Matthew Mitten, director of the National Sports Law Institute at Marquette University. In itself, a forced sale is not anti-competitive, Mr Mitten said, and such antitrust claims are usually unsuccessful.

    Sterling might get further by arguing that a forced sale of the Clippers violates the California Franchise Relations Act, said Jonathan Solish, a lawyer with Bryan Cave in Santa Monica, California.

    "It's certainly not a long shot that the Clippers are a franchise" under state law, he said in an interview.

    Sterling could seek the same legal protection as owners of a 7-Eleven or McDonald's store, including the right to "cure" any violation of his contractual obligations with the NBA before the league takes away his franchise, Mr Solish said.

    ESPN reported that Sterling had hired antitrust litigator Max Blecher, whom the sports network said threatened to sue if the NBA does not afford Sterling due process. Mr Blecher did not respond to phone and e-mail messages from Bloomberg News seeking comment.