April 29 (Bloomberg) -- The National Basketball Association banned Los Angeles Clippers owner Donald Sterling for life and fined him $2.5 million for making racist remarks, the first time an owner was suspended in 14 years.
NBA Commissioner Adam Silver, speaking at a news conference in New York, said that he would urge the NBA board of governors to force a sale of the team. Silver said he expects to get support of 75 percent of the 30 owners needed to force a sale.
“The views expressed by Mr. Sterling are deeply offensive and harmful,” Silver said. “That they came from an NBA owner only heightens the damage and my personal outrage.”
The recorded comments, which were posted on website TMZ four days ago, drew condemnation from people ranging from President Barack Obama to fellow owners including Microsoft Corp. co-founder Paul Allen and Quicken Loans Inc. founder Dan Gilbert. As many as 12 team sponsors left the team or suspended their deals over the comments, in which Sterling told a woman that he didn’t want her to bring black people to Clippers games.
Silver said Sterling acknowledged that it was him on the tape.
The Clippers issued a statement today backing Silver’s move.
“We wholeheartedly support and embrace the decision by the NBA and Commissioner Adam Silver today,” the statement said. “Now the healing process begins.” The team’s Internet home page was all black, except for the team logo and the words, “We are one.”
The NBA has $5.5 billion in annual revenue. Its players are 76 percent African-American, according to an October report by the Institute for Diversity and Ethics in Sports at the University of Central Florida.
Sacramento Mayor Kevin Johnson, a three-time NBA All-Star who was asked to assist the players’ union in the Sterling matter, said the organization backed Silver.
“There will be zero tolerance for institutional racism, no matter how rich or powerful.” Johnson said at news conference in Los Angeles. “On this day Adam Silver is not only the owners’ commissioner, he is the players’ commissioner, and we are proud to call him our commissioner.”
Union First Vice President Roger Mason Jr. said players were prepared to boycott the league if they were dissatisfied with Silver’s decision.
Sterling was recorded after a woman who accompanied him to Clippers games posted a photo to Instagram of herself and Hall of Famer Magic Johnson at a game. He told her he didn’t mind her friendships with black people, just that he didn’t want them public.
“It bothers me a lot that you want to broadcast that you’re associating with black people. Do you have to?” he told the woman, who is identified by TMZ as V. Stiviano.
“Why publicize it on the Instagram and why bring it to my game?” asked Sterling, 80.
The move by Silver, who took over as commissioner from David Stern on Feb. 1, is the first owner suspension in almost 14 years. Stern, who was commissioner for 30 years, banned one owner: Glen Taylor of the Minnesota Timberwolves from December 2000 to September 2001 for trying to secretly make a deal that would have circumvented the league’s salary cap. Taylor was also fined $3.5 million, the biggest fine ever imposed on an NBA team.
Forcing Sterling to sell would be the most severe public penalty levied on an owner in a major American sports league.
“Silver has put his stamp on the league,” Paul Haagen, a professor of sports and contract law at the Duke University School of Law in Durham, North Carolina, said in an e-mail. “If the owners fail to back him on this, his leadership will in all probability become untenable.”
In Major League Baseball, Cincinnati Reds owner Marge Schott was suspended for a year in February 1993 after being accused of routinely making racial slurs toward blacks and Jews. In a May 1996 interview with ESPN, she said that Hitler “was good at the beginning, but he just went too far.” She was banned though the 1998 season, then announced that she would sell her stake in the team. Schott was forced out by the other owners, the Cincinnati Post reported at the time, though the effort wasn’t made public.
In 1953, American League owners blocked St. Louis Browns owner Bill Veeck’s attempt to move the club to Baltimore, knowing that he couldn’t afford to support a team competing for fans against the Anheuser-Busch-owned Cardinals, according to Sports Illustrated. AL owners finally approved the move when Veeck, known for stunts like having 3-foot-7 Eddie Gaedel come to bat in 1951, agreed to sell his stake, the magazine said.
Dallas Mavericks owner Mark Cuban yesterday told reporters it would be a “slippery slope” to force Sterling out of the league, even though the comments were “abhorrent.”
Today, Cuban said on Twitter that he supported Silver’s actions “100 percent.”
Sterling could turn to the courts for relief, said Gabe Feldman, director of the Sports Law program at Tulane University in New Orleans. Feldman “wouldn’t minimize the threat of antitrust litigation,” he said in an interview.
Sterling bought the Clippers in 1981 and is the longest-tenured owner in the NBA. In 2009 he agreed to pay $2.73 million to settle a housing discrimination suit after the government alleged that he discriminated against black and Hispanic prospective tenants. The payment was the largest ever obtained by the government in a discrimination case involving apartment rentals. His attorney denied the allegations at the time of the settlement.
In 2005, Sterling settled a lawsuit filed by the nonprofit Housing Rights Center on behalf of six plaintiffs, including former employees and tenants, who were allegedly fired or mistreated because they weren’t Korean. Sterling allegedly said he didn’t want blacks or Latinos at his newly acquired buildings in Koreatown, according to the suit.
Even with the negative publicity, the team will fetch a good price, said Michael Principe, chief executive officer of sports representation and marketing company the Legacy Agency.
“Regardless of how odious the remarks attributable to Donald Sterling are, this will not be a fire sale,” Principe said in an e-mail. “The man has made his fortune in real estate, he knows what fair market value is, and there is no true precedent for the commissioner to follow.”
The Clippers aren’t the primary tenant in the Staples Center, sharing it with the Los Angeles Lakers and hockey’s Los Angeles Kings.
The Clippers also don’t own their own broadcast platform, making it tough for them to leverage many of the rights that other top franchises have, Principe said. They do have a talented, young team and play in the second-largest market, meaning, “Like it or not, if Donald Sterling sells the Clippers, it will not be cheap,” he said.
The Clippers, ranked in 2009 by ESPN Magazine as the worst of 122 franchises in the four main U.S. sports, have made the postseason the past three seasons. With All-Stars Chris Paul and Blake Griffin, the Clippers are tied with the Golden State Warriors 2-2 in their first-round playoff series. Game 5 is tonight in Los Angeles.
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