The MLB Commissioner’s Power To Discipline A Donald-Sterling Like Owner

Less than 96 hours after TMZ.com published a racist and hate-filled audio recording between Los Angeles Clippers owner Donald Sterling and his then-girlfriend V. Stiviano, NBA Commissioner Adam Silver suspended Sterling from any and all NBA activities for life; fined Sterling $2.5 million; and asked the other 29 NBA owners to force a sale of the Clippers. When asked at his press conference what authority he had to force Sterling to sell the team, Silver replied:

The owners have the authority subject to three quarters vote of the ownership group, of the partners, to remove him as an owner.

Silver didn’t go into specifics, and when asked questions about his authority to suspend Sterling for life and impose a $2.5 million fine, he replied:

I’ll let the lawyers lay out for you the specific provisions of our constitution. Let’s just leave it that we have the authority to act as I’ve recommended.

A few hours later, the NBA made its Constitution and By-Laws available to the media through the league’s media center website. Deadspin, among others, published the document in full and provided a link for those of us who aren’t NBA media members.

So let’s take a  look at Silver’s authority.

First, we need to see how the NBA Constitution and By-Laws defines the various entities at the team level. In a section entitled “Interpretation” are the following definitions:

“Member” shall mean a person or Entity that has been granted a Membership in the Association. For purposes of this Constitution and By-Laws, an action on behalf of a Member by any of its Owners, employees, officers, directors, managers, agents or representatives, or its Governor or Alternate Governors, shall be the action of a Member.

“Owner” shall mean a Member and each individual or Entity (including both the trustees and beneficiaries of any trust) that, directly or indirectly (including through one or more intermediate Entities), owns of record or beneficially an interest in, or has effective control over, a Member or its Membership.

“Team” shall mean the professional basketball team organized and operated by a Member to play in the league operated by the Association.

An owner is a member. A member takes action through its owner and other executives. A team is what the member operates as part of the league.

On the issue of terminating ownership or membership in the NBA, Article 13 of the Constitution says, in part:

The Membership of a Member or the interest of any Owner may be terminated by a vote of three fourths (3/4) of the Board of Governors if the Member or Owner shall do or suffer any of the following:

(a) Willfully violate any of the provisions of the Constitution and By-Laws, resolutions, or agreements of the Association.

(d) Fail or refuse to fulfill its contractual obligations to the Association, its Members, Players, or any other third party in such a way as to affect the Association or its Members adversely.

(emphasis added).

Subsections (b), (c) and (e) through (j) address financial failures, gambling on games, rigging game scores, not fielding a team or misrepresenting facts in a membership application. Those aren’t likely implicated by Sterling’s conduct, at least based on the facts we now know.

My best guess is that Silver and the NBA owners will rely on subsections (a) and (d) should the owners vote to remove Sterling as an owner of the Clippers. The question then, is, what provision of the Constitution or contractual obligations did Sterling violate with his racist diatribe captured in the audio recordings?

For that we turn to Article 35A, which reads, in part:

The provisions of this Article 35A shall apply only to

Members and Owners. . . .  The word “persons” as used herein shall include all such Members [and] Owners . . . . [irrelevant definitions deleted for brevity].

(c) Any person who gives, makes, issues, authorizes or endorses any statement having, or designed to have, an effect prejudicial or detrimental to the best interests of basketball or of the Association or of a Member or its Team, shall be liable to a fine not exceeding $1,000,000 to be imposed by the Commissioner. The Member whose Owner, Officer, Manager, Coach or other employee has been so fined shall pay the amount of the fine should such person fail to do so within ten (10) days of its imposition.

(d) The Commissioner shall have the power to suspend for a definite or indefinite period, or to impose a fine not exceeding $1,000,000, or inflict both such suspension and fine upon any person who, in his opinion, shall have been guilty of conduct prejudicial or detrimental to the Association.

In other words, owners agree to not make statements or act in any way that is prejudicial or detrimental to the NBA. If they do, they are not only subject to suspension and fine, but to a vote by the remaining owners on whether to terminate his or her interest. That’s the argument, at least.

Note that Article 35A limits a fine to $1 million, and Silver fined Sterling $2.5 million. There is a provision that refers to a potential $2.5 million fine, but it is a more general, catch-all provision under the Commissioner’s enumerated duties and responsibilities. Typically, a more specific contract provision will be applied over a more general one.

Article 24 establishes the Commissioner’s powers. Subsection (l) states:

(l) The Commissioner shall, wherever there is a rule for which no penalty is specifically fixed for violation thereof, have the authority to fix such penalty as in the Commissioner’s judgment shall be in the best interests of the Association. Where a situation arises which is not covered in the Constitution and By-Laws, the Commissioner shall have the authority to make such decision, including the imposition of a penalty, as in his judgment shall be in the best interests of the Association. The penalty that may be assessed under the preceding two sentences may include, without limitation, a fine, suspension, and/or the forfeiture or assignment of draft choices. No monetary penalty fixed under this provision shall exceed $2,500,000.

It may be that Silver imposed the maximum fine mentioned in the NBA Constitution knowing there was a possibility Sterling could convince a judge or arbitrator to reduce the fine on appeal. But there was enormous public pressure — from the players, fans and corporate sponsors — to take quick and decisive action against Sterling. Few would have been satisfied with a lawyerly response like: “Well, we’d would have liked to do more, but we’re not sure if subsection (l) of Article 24 applies.”

But action for the sake of public relations may not hold up under legal challenge. Michael McCann — the founder of the Sports and Entertainment Law Institute at the University of New Hampshire School of Law — wrote in this post at Sports Illustrated about the reasons owners might be reluctant to strip Sterling of his ownership interest. It all boils down to whether Sterling’s racist and offensive beliefs — caught on tape for all the world to hear — violate the NBA Constitution or any contractual obligation by the NBA.

What if Donald Sterling were an MLB owner? Or one of the 30 current MLB owners was shown to have expressed racist and hateful views? What would be the maximum penalty the MLB Commissioner could impose?

We start with the MLB Constitution (link here) and Article II, which outlines the authority of the Commissioner. Section 3 reads:

In the case of conduct by Major League Clubs, owners, officer, employees or players that is deemed by the Commissioner not to be in the best interests of Baseball, punitive action by the Commissioner for each offense may include any one or more of the following:

(a) a reprimand; (b) deprivation of a Major League Club of representation in Major League Meetings; (c) suspension or removal of any owner, officer or employee of a Major League Club; (d) temporary or permanent ineligibility of a player; (e) a fine, not to exceed $2,000,000 in the case of a Major League Club, not to exceed $500,000 in the case of an owner, officer or employee, and in an amount consistent with the then-current Basic Agreement with Major League Baseball Players Association, in the case of a player; (f) loss of the benefit of any and all of the Major League Rules, including but not limited to the denial or transfer of player selection rights provided by Major League Rules 4 and 5; and (g) such other actions as the Commissioner may deem appropriate [emphasis added].

Note the similarities and differences between the MLB and NBA Constitutions. The MLB Constitution gives the Commissioner broad authority to fine, suspend and remove owners who act contrary to “the best interests of baseball.” In the NBA, the Commissioner can fine and suspend (but not remove) an owner who “gives, makes, issues, authorizes or endorses any statement having, or designed to have, an effect prejudicial or detrimental to the best interests of basketball.”  So while both leagues demand that owner always act in the best interests of the sport, MLB’s Commissioner has the power to remove an owner, and the NBA’s does not.

On the other hand, the NBA Constitution authorizes higher monetary penalties: at least $1 million, if not the $2.5 million imposed by Silver on Sterling. In MLB, the maximum monetary fine for an owner who acts contrary to the best of baseball is $500,000. Both Commissioners have full authority to suspend owners.

MLB’s Constitution also has provisions governing the involuntary termination of a Major League Club but that section doesn’t use the word owner. (Article VIII). That differs from the section on the Commissioner’s authority to act in the best interests of baseball, which specifically refers to owners. This makes sense if MLB’s Commissioner has the power to remove an owner, whereas the NBA Commissioner can only fine or suspend one.

Major League Clubs can terminate the rights, privileges and property rights of another Major League Club with the approval of 3/4 of all Major League Clubs for financial improprieties, gambling, throwing games, and failing to maintain an adequate ballpark. They may also act to terminate a Club’s rights when it “willfully violates any provision of the Constitution” or “fails or refuses to fulfill its contractual obligations.”  This section is on par with Article 35A of the NBA Constitution in terms of voting structure and the kinds of misconduct that can lead to the expulsion of a team. But, again, in MLB, the involuntary termination provisions do not specifically apply to owners.

Baseball’s commissioner has never removed an owner for acting contrary to the best interests of baseball. Nor has the commissioner ever imposed the maximum $500,000 fine on an owner or suspended him or her for life. [I was wrong. As my fine colleagues Grant Brisbee and Steven Goldman noted at SBNation, one owner was removed by Commissioner Landis for gambling on baseball].

The harshest penalties ever imposed on an MLB owner not involving a crime involved former Cincinnatti Reds owner Marge Schott. In February, 1993, then-acting Commissioner Bud Selig suspended Schott for the 1993 season and fined her $25,000 after her racist and anti-semitic views and conduct were brought to light. Selig also ordered Schott to attend sensitivity training. Jay Jaffe of Sports Illustrated detailed Schott’s vile transgressions in this post earlier in the week, as the Sterling news broke and the world waited for the NBA’s response. As Jaffe wrote, Schott became known for calling her black players and other employees by the N word and for saying that “Hitler was okay in the beginning” — statements on par with — if not more offensive than — what Sterling said to his girlfriend.

Schott was not deterred or sensitized and continued on with her racist and anti-semitic comments, including praise for Hitler. Again, Selig responded with a suspension, in June 1996, to last through the end of the 1998 season. When the suspension expired, the commissioner threatened further action if Schott didn’t relinquish ownership of the Reds. She wasn’t removed as an owner under the commissioner’s authority, but pressured to sell the team or face another, longer suspension. She relented in 1999 and sold all but one share of the team.

Thanks to the 24/7 news cycle and the exponential effect of social media on news stories, Sterling’s comments received much greater public scrutiny and condemnation than Schott’s ever did. Corporate sponsors fled the Clippers and the NBA. The players’ union took a strong, united stand, with the players on teams in the postseason threatening boycotts if Silver didn’t quickly and harshly punish Sterling. Silver did the right thing in imposing the maximum penalty permitted by the NBA Constitution, but doing less would not have been in the best interest of the sport. It’s still up to the owners whether to force Sterling to sell the Clippers.

One would hope that, if in 2014 or beyond, an MLB owner treated his or her employees the way Schott did, or expressed such vile views, the MLB commissioner would act as swiftly and as forcefully as Adam Silver did.




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Wendy is also a contributing writer for Sports on Earth. Her writing has appeared on ESPN.com, Baseball Nation, Bay Area Sports Guy, The Score, The Classical and San Francisco Magazine. Wendy practiced law for 18 years before beginning her writing career. You can find her work at wendythurm.pressfolios.com and follow her on Twitter @hangingsliders.


95 Responses to “The MLB Commissioner’s Power To Discipline A Donald-Sterling Like Owner”

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  1. bkgeneral says:

    I guess I am a Marge apologist. I met her, after she was forced out, and she was very nice. I just saw an old, sickly women. Who looked tired. Lost in the many sins, are some good that she did, mainly for kids in the Cincinnati area. Are the sins and good equal? Probably not. But does that make the good go away? It sure shouldn’t.

    What is clear to me is at the point she was forced out she was an old, sick, tired women. Would MLB have been so willing to push out a more difficult opponent? Maybe a younger man would have been treated differently? Steinbrenner has his list of sins, and he was allowed to stay for an example.

    And I liked Schottzie!

    -15 Vote -1 Vote +1

    • Mao Zedong says:

      As long as someone is old, they should be forgiven for whatever they do.

      +23 Vote -1 Vote +1

      • Frank says:

        People murder their families. People rape children. People commit war crimes. Meanwhile in your world, “Marge Schott. Boo hoo.”

        -9 Vote -1 Vote +1

    • Yinzer says:

      Marge was good at the beginning, but then she went too far.

      +31 Vote -1 Vote +1

      • Pennant says:

        I have no citation but it seems this “he was ok in the beginning” stuff has been around awhile. The first i heard of it was in context of Castro, as some were always looking to soften his image and make excuses and this seemed to give them some headway in that quest. So I remember chuckling when Schott used this same tack for Hitler. I considered she might be speaking somewhat tongue-in-cheek to show how silly this argument by using it for Hitler was but unfortunately she was not joking as evidently she did own some Nazi memoribilia. I think the same general idea (“at first he did good..”) was floated on an episode of Star Trek on that nazi episode.

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    • fan favorite says:

      It’s awesome to play baseball in a field of dog shit. That’s what everybody wants.

      Vote -1 Vote +1

    • Bip says:

      Is any given person ever all-good or all-bad? No. Everyone can be said to have redeeming qualities or actions.

      Is it unacceptable for the proprietor of a widely consumed and irreplaceable product to be a ranting, overt racist? Yes.

      Did Selig act appropriately to remove Schott as long as she refused to apologize and make amends for her statements? Yes.

      +7 Vote -1 Vote +1

      • Wobatus says:

        If Jonas Salk was a racist I’m pretty sure folks would still take the polio vaccine.

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      • Baltar says:

        Marge Schott’s comments about Hitler were not accurate, but there was some truth to it. Hitler did actually do a lot of good for desolate Germany, but there was always evil to go with it, from the beginning.
        Historians point out that if Hitler had stopped his expansionism and persecution of the Jews after the conquest of Czechoslovakia, he might today be regarded as more of a hero than a villain.
        Of course, Hitler, being Hitler, could not do that.
        So Marge was wrong about Hitler. Is that a crime in a country that supposedly has free speech (which includes the right to be wrong)?
        The statements about her “million dollar niggers” were, of course, beyond acceptability. That was contrary to the interests of her own team and all of MLB, though still within the bounds of free speech.
        Demanding that she recount both of these incorrect views (and not state them again) to remain active in the management
        of a MLB team was reasonable, but depriving her of ownership as a silent partner was not right.
        From the tape, it appears that Donald Sterling was upset that his girlfriend had Instagrammed (whatever that is) a picture of herself with Magic Johnson. He found that personally embarassing due to his prejudices (to paraphrase, “everybody will think my girlfriend is fucking a nigger”).
        All the rest of what he said were the typical contradictions and hyperboles that normally come with a lover’s quarrel. They were reprehensible, racist and disgusting, but, again, within the bounds of free speech. I’ve heard worse from people whom I still consider friends.
        Silver, of course, had to react to the player rebellion. The fine and “banishing,” for lack of a better word, were sufficient for that. Requiring an apology and promise never to say anything like that again, as in the Schott case, should have been enough to retain ownership if Sterling accepted.
        The rejection he will receive from the Hollywood celebrity clique (and that fantastic girlfriend) will be the part of his punishment that will hurt him the most.
        Again, as in the Schott case, apology and promise to behave should be sufficient to retain non-active ownership, but he surely will be deprived of that option, unfairly, by the other owners.

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        • n0exit says:

          Freedom of speech does not mean freedom from consequences. Just like you have the ability to not associate with racists the NBA, MLB and other private entities have the right to dissacociate from them. The standard you hold people to seems exceedingly low and when there are billions of dollars at stake the standard owners are held to will be intimately higher.

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        • The Bill of Rights says:

          Neither Schott nor Sterling had any “free speech” rights violated. The First Amendment prohibits government entities from criminalizing or otherwise regulating how persons are allowed to express themselves (although even this protection has numerous exceptions).

          The outrage at Schott and Sterling is not coming from the government. No executive or legislative action is forcing Sterling to sell the team. The outrage is coming from other citizens who also possess First Amendment rights. Importantly, many key critics of both owners also appear to have had significant contractual rights through which they could express dissatisfaction with each owner’s respective statements, whether through cancelling sponsorships or voting to force a sale.

          The First Amendment lets you say (almost) whatever the hell you want without fear of government retaliation. It does not, however, grant you the right to say stupid shit without any consequences. Those consequences do not become unfair just because they involve a lot of money.

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        • Paul G. says:

          It is true that the First Amendment only protects the speaker from government action. Not that this protection has always worked, unfortunately.

          However, “free speech” is more than the First Amendment. As a societal value it reflects a level of tolerance best reflected by what Voltaire (reportedly) said “I disapprove of what you say, but I will defend to the death your right to say it.” People are allowed to be jackasses. This is especially important because sometimes the jackass is right, or at least has a point. (For instance, someone like Martin Luther King, Jr. would have been considered a jackass by the majority of the population in many areas at the time.) Other people can then use their right to free speech to criticize the jackass and, if so moved, disassociate with said jackass. All fine and good.

          The problem is when this escalates from disapproval. How much of freedom of speech does one have when unpopular speech results in losing employment or being stripped of property? Yes, sure, if this comes about through public outrage or private organizational pressure it generally does not violate the First Amendment, but the result is practically the same. Speech is chilled and freedom is reduced. Taken to extremes it starts resembling looking for heretics to burn. You have free speech as long as it does not offend the mob. Unless you are part of the mob, it is not a fun place to live. Even if you are part of the mob, forbid the mob suddenly turns on you, as mobs tend to do.

          Sterling is a jackass and not in the “history will vindicate him” kind of way. And most likely the normal criticism/disassociate course would have resulted in him having to sell eventually. But let us not pretend that because this technically does not violate his First Amendment rights that it is some noble endeavor.

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        • Breadbaker says:

          Paul G., I couldn’t disagree more. This isn’t the action of a “mob”, this is the reaction of people who were not just offended by what Sterling said, but who saw their own interests, whether their interests in personal dignity or their economic interests because associating with a publicly exposed racist was bad for their pocketbooks, affected in a hugely negative way. Those people’s freedom of speech counts, too; they don’t have to sit still because Donald Sterling has the right to express his views. Sterling can still express any view he wants and is likely to get a national forum to do so. But he has no more right to have no consequences for expressing his view than the Dixie Chicks did, or John Lennon. Or you. Or me.

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    • Ian R. says:

      I agree that Schott was a complex (and often contradictory) figure, and I tend to think that her bigotry was more rooted in severe, incurable ignorance than malice. Still, she had no business owning a baseball team.

      Vote -1 Vote +1

      • Ballfan says:

        ‘As long as someone is old, they should be forgiven for whatever they do.’

        that is extremely poor reasoning and logic

        it’s ok to do wrong if you are old? or it is ok to have done wrong because you are now old?

        dumb

        -14 Vote -1 Vote +1

    • El Duderino says:

      “Marge Schott wasn’t so bad in the beginning…”
      -bkgeneral

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      • bkgeneral says:

        well…we did get the 1990 World Series so yeah…good in the beginning works for me.

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        • El Duderino says:

          I think that you might not have realized that I was paraphrasing her quote about Hitler, who did much more for his people than Schott could have ever dreamed of doing for Cincy, but neither will be remembered for them because of the terrible things that they did afterwards.

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        • Breadbaker says:

          “His people” included the Jews who were citizens of Germany at the time he became Chancellor. He did nothing for them that wasn’t negative from the day he took office. Sorry, you don’t get a pass on this one.

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    • KCDaveInLA says:

      Life is kinda like the comments section in Fangraphs – Marge Schott is in the negative on the +/- scale.

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    • Aaron says:

      I’m gonna go out on a limb and guess you’re a white, non-Jewish male?

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  2. shthar says:

    One question I have, on that vote of the NBA owners, is it a secret ballot?

    If it is, he aint gettin voted out.

    Vote -1 Vote +1

    • MDL says:

      The results will be publicized by the NBA (and it will be 29-0) because they are all trying to back as far away from Sterling as possible.

      +7 Vote -1 Vote +1

      • Preston says:

        Cuban might vote no, or abstain. He called it a slippery slope. It does seem like a huge power to be able to force him to sell because of some private remarks that went public, no matter how abhorrent. Now on the other hand, he has a long history of things that I consider to be much worse, so if this is the straw that broke the camel’s back that’s fine. But more likely this is just a reaction to public outrage. They are fine with him being a sleazy racist slumlord. They aren’t fine with it making news headlines.

        Vote -1 Vote +1

        • Doug says:

          Cuban has already started he will vote him out. No owner will vote against it or they will never sign a free agent again.

          Vote -1 Vote +1

        • Doug says:

          Stated, not started.

          Vote -1 Vote +1

        • KCDaveInLA says:

          The “slippery slope” has to do with the skeletons that probably every other sports team owner has, IMHO.

          Vote -1 Vote +1

  3. AK7007 says:

    How would you characterize the Dave Winfield incident for Steinbrenner? I’m pretty sure that was a lifetime ban that ended up being lifted for no real reason.

    Vote -1 Vote +1

    • Wendy Thurm says:

      Steinbrenner was actually suspended twice. Once in the early 1970′s after he was convicted on charges of illegal campaign contributions to Richard Nixon. That resulted in a 2 year suspension. Then in 1990, after the Dave Winfield-Howard Spira situation came to light. According to news reports, Steinbrenner agreed to a lifetime ban which was then changed to a 2 year ban after 2 years had elapsed.

      Steinbrenner was never forced to sell the Yankees.

      Vote -1 Vote +1

  4. stonepie says:

    anyone catch rush limbaugh’s conspiracy theory about the sterling fiasco? he claims that sterling was set up by people who want magic johnson to buy the clippers

    http://www.thewire.com/politics/2014/04/rush-limbaugh-has-a-fun-new-conspiracy-theory-about-donald-sterling/361407/

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    • fan favorite says:

      That’s really a distraction because he wants to buy the Clippers since the NFL didn’t want him to buy the St Louis Rams.

      Vote -1 Vote +1

    • The Stranger says:

      That’s a poor excuse for a conspiracy theory – not enough layers to it. My conspiracy theory of choice is that he was set up by his wife so that his net worth won’t be tied up in the Clippers when she files for divorce, and that Stiviano gets a cut of the divorce settlement for her assistance.

      The reality? Probably just that Stiviano was both sick of Sterling’s shit and eager for her 15 minutes of fame.

      +16 Vote -1 Vote +1

    • Paul G. says:

      I’ve heard this conspiracy theory and variations on it. The NBA would probably be happy to be rid of Sterling who has been an awful owner for a long time, though if they were part of the conspiracy they definitely wouldn’t have timed it like this. The idea that someone else who wants to buy the Clippers would be behind it is plausible. The Lakers stink, the Clippers have an exciting, young team with a couple of big stars, Sterling had zero interest in selling at any price, the “girlfriend” has already proven that she can be bought… sure, why not? Or it could be a coincidence that just happens to benefit potential new owners.

      My philosophy: As Garak says: “I believe in coincidences, coincidences happen every day. But I don’t trust coincidences.”

      As for Stiviano being sick of Sterling, I doubt that. She services an 80-year-old married man for money. I sense her tolerance is pretty high. However, her tolerance for being sued to return all that money is probably really low. Nothing like a golddigger scored, I suppose.

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    • Jamie says:

      I’m sure it’s somehow all part of the vast media conspiracy to see a black quarterback do well.

      Vote -1 Vote +1

    • Baltar says:

      Rush Limbaugh was good at first, but then …
      Wait. That’s not true. He has always been evil.

      Vote -1 Vote +1

      • Obummer (or is it Nobama?) Haw haw says:

        Indeed. People we disagree with are inherently evil and trying to destroy the country. Their motives? Inevitably to destroy the U.S. and everything we hold dear, and our very way of life. NOTHING ELSE WILL DO.

        Cordially,
        every right-wing windbag ever

        Co-signed,
        every left-wing windbag ever

        Vote -1 Vote +1

        • Inappropriate Political Discourse says:

          false equivalence is false.
          Find me one left-wing crazy person who is as popular with Democrats as Limbaugh is with Republicans and also ANYWHERE NEAR AS EVIL.

          Vote -1 Vote +1

  5. Stank Asten says:

    Can you explain exactly what law govern the NBA regarding this matter? Because obviously the whole talk of “NBA Constitution” is meaningless without some context. Are sports franchises individual entities? members of a franchise? a partnership?

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    • pgburant says:

      “Contract Law”

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      • Stank Asten says:

        Nice try but I’d like Wendy or someone else with some actual knowledge to response.

        -6 Vote -1 Vote +1

        • Luke Appling says:

          “Voluntary association”

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        • eayres33 says:

          except he’s right, its “contract law” the NBA teams or any sports league has a constitution which serves as a contract for all the members. They are bound by that law, unless their constitution is in violation of a superseding law.

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        • Stank Asten says:

          And do you suppose that the NBA or the MLB are governed by just contract law and no other law of business associations? I’d like you to think hard and long about that.

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        • Legal Eagle says:

          Apparently pgburant does retain some “actual knowledge” because, as eayres33 pointed out, contract law is what will ultimately govern this dispute.

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        • Stank Asten says:

          Or a superseding law will govern this dispute, except Wendy Thurm doesn’t tell us what that is.

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        • Stank Asten says:

          And by the way I doubt it is contract law that gives the NBA its authority over its members, e.g. power to fine owners. That’s not how contract law works.

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        • Legal Eagle says:

          Except that is exactly how contract law works. I guarantee you that the NBA did not acquire any rights with respect to Donald Sterling’s ownership of the Clippers except by operation of contract.

          I’m sure a complex agreement of this nature has a choice of law provision designating which state’s laws applies. If I had to guess, I would say New York. New York law generally allows great freedom of contract, and I don’t see anything in the language quoted above that is likely to be unenforceable (which is also a question of contract law). This will be a legal dispute over the appropriate interpretation of the contract (aka “contract law”).

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        • Stank Asten says:

          No, you can’t enter into a contract that will give some supervising entity rights to 1) fine you for misconduct, 2) suspend you and exclude you from managing or even entering your own property, and 3) make it impossible for the other party to break the contract.

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        • The Foils says:

          Yeah you totally can. Are you kidding me?

          1) depends on the situation and is in very broad terms kind of a penalty vs. liquidated damages issues
          2) obviously yes you can what the hell do you think a Home Owners Association is?
          3) well no you can’t do that (sounds like you’re referring to illusory contracts) but what does this even mean in this context? No one did that

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        • Stank Asten says:

          No, are you kidding me? You think the kinds of fines that the NBA levies against owners are acceptable liquidated damages? You think a loose collection of independent businesses supposedly tied together by contract law alone will be treated the same as a home owners’ association? And if contract law alone governs their relationship, you think Sterling can somehow get a specific performance? Lastly, a business association is by default a partnership unless it opts into some other form. Wendy Thurm, the supposed legal expert, should clarify this, since her entire article is gibberish without that context.

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        • Stank Asten says:

          To make the homeowners association point clearer–a HOA is usually a corporation. It is NOT governed exclusively by contract law.

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        • JusticeBruin says:

          Mr./Ms. Asten, you seem to have some familiarity with legal concepts, so I am at a loss as to why you think something other than contract law would govern here. Do you think there is a statute or judicial opinion not pertaining to contract law that governs the NBA’s internal procedures? That hardly seems plausible.

          Perhaps the confusion here is a semantic one. The documents that constitute the rules of various forms of business associations are essentially contracts.

          The idea that contract law governs might seem less offensive to you if conceive of the NBA not as a “loose collection of independent businesses” (which it is not) but more like a fast food chain with very restrictive franchise agreements. Someone who operates a McDonalds franchise is hardly running an independent business in the way “independent” is usually meant. The rights of the parent company with respect to the franchise owner are all governed by contracts and the applicable state’s contract laws.

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        • Stank Asten says:

          A McDonald’s franchise is governed by franchise law.

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        • Stank Asten says:

          And of course contract law applies where it will. But the point is that the laws of business associations allow for relational organization above and beyond what is provided for by contract law. One important aspect of this is the right of the association to terminate a member. This is almost never a matter purely of contract law.

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  6. Jeremy B. says:

    Wendy, you cite McCann for the basic proposition that “[i]t all boils down to whether Sterling’s racist and offensive beliefs — caught on tape for all the world to hear — violate the NBA Constitution or any contractual obligation by the NBA.” But isn’t the issue, at least under subsection (a), whether he WILLFULLY violated the constitution? Even if his prejudicial remarks in a vacuum may have encroached upon the anti-prejudice prohibitions in Article 35A(c), how could private remarks made to his girlfriend qualify as a willful violation?

    As for subsection (d), I’m guessing the NBA would argue that Sterling failed to fulfill his contractual obligation to a third party once sponsors started fleeing the Clippers (thus adversely affecting the league), but that also seems like a stretch, given that he didn’t actually breach any contracts (i.e., fail to pay the sponsors).

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    • Swingdoc says:

      Wouldn’t the sponsor contract have behavior/image stipulations similar to individual endorsement?

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    • The Stranger says:

      That’s an interesting point. Had he made those remarks in a public forum, the NBA would have a much clearer case. If the remarks had remained private, as he presumably believed they would, there would have been no harm to the league.

      Of course, the merits of Sterling’s inevitable lawsuit against the league are probably unimportant, so long as he has enough of a leg to stand on that the case isn’t dismissed early on. There’s very little chance that case gets decided on the merits, IMO. My guess is that Sterling drags it out as long as he can (and that’s almost certainly measured in years), until either a) he dies, b) somebody pays him enough to go away, or c) he dies and somebody pays his estate enough to go away. Sterling is definitely shrewd/evil enough to use lengthy, expensive, and embarrassing litigation (or the threat thereof) to extort a few hundred million above and beyond what he’d get if he just acquiesced to the sale.

      I think it depends on whether Sterling thinks staying in the public eye and fighting with the league is as much fun as having another billion dollars for the last few years of his life. My guess is that he’ll die as owner of the Clippers, especially if his health is as bad as recent reports suggest.

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  7. GilaMonster says:

    My biggest problem with this whole situation is the NBA has practically come out and said that is is okay to be a terrible owner that fields a terrible team because that isn’t damaging to the league. But being a bad person that makes racist remark causes irreparable damage to the league.

    Who has done more damage to baseball?: Marge Schott or Jeff Loria.
    One was a racist that fielded a good competitive team that she cared about. The other has run two franchises into the ground and swindled taxpayers out of millions of dollars.

    Donald Sterling shouldn’t lose his team for being a racist. He should lose his team for being a terrible owner,which could in part be due to his racism.

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    • Ian R. says:

      Considering the Clippers still, in the midst of all this, have a legitimate shot at a championship this year, now would be an odd time to remove Sterling for being a terrible owner – though I’m aware, of course, that that doesn’t outweigh the many, many losing seasons they had under his ownership.

      I do agree with your larger point here, though I’d draw a distinction between owners who aren’t even trying to win (e.g. Loria) and owners who are just incompetent.

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    • Joe says:

      A Marge Schott in 2014 would prompt boycotts, sponsor pull-outs, and the ire of the 24/7 news cycle and twitter. There would be legitimate economic and reputational harm to the league, and they’d be forced to act.

      Loria is a slimebag but it turns out nobody cares about his transgressions beyond a few blog posts. Hell, being able to swindle money from taxpayers without ruining the leagues reputation is probably a good thing for MLBs bottom line.

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      • GilaMonster says:

        But how much are owners who field terrible team costing the league in potential revenue? Seemingly a competitive Marlins and Mets would be big for MLB.

        Then again:,If MLB was run with competence, Both Oakland and Tampa would have new stadiums and markets.

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        • Ruki Motomiya says:

          In the short term, that may provide more revenue, but in the long run having an owner who repeatedly brings bad press to the sport and turns away people who may otherwise become lifelong fans of the sport is more damaging. In addition, doing stuff to an owner just for being bad opens a whole can of worms: How long must one be bad before they are subject to being removed? Do they have to be a Loria-esque debacle? What would happen to the Pirates during their 20-year-spiral, for example? What about a team like the Mets, who seem to try to field good teams and just fail, or the Phillies, who are getting old? By offering up the ability to remove owners from the MLB just for performance, especially since GMs can be more responsible for said performance, opens up a lot of instances for abuse.

          In addition, unless it affects the rest of the league or people watching them, the MLB doesn’t care how many taxpayer dollars it swindles I wager. But overall, someone like a Marge or Sterling threatens the future of the league much more than someone like a Loria: Even Loria can only live for so long. However, if people think they hear racist comments plastered all over social media and the news, they will associate it with the league and may in turn spread bad press, especially nowadays, and could even harm players coming into the league. I mean, what happens if a black kid who is trying to decide between sports thinks that the NBA doesn’t drop the hammer on racism or is just part of it because he sucked anyway? He might choose another sport that he feels has less racism.

          In short, someone like Loria will only generally do short term harm to the league unless you field a league of 30 Lorias, someone like Marge sticking around causes long term damage to the league.

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        • GilaMonster says:

          In my defence, Loria quite literally killed the Expos.

          And I think you overstate the length of peoples memories. People latch onto these things because they are upsetting and controversial. But say the NBA did nothing. Sterling would lose money and players because what he said. But a year or two down the road, people would forget. If the Clippers continued to be good, you’d look at them as say “They are owned by a crazy racist old man”, but the whole outrage probably wouldn’t last. The mass media and general public have the attention span of a fish.

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    • Stank Asten says:

      Are you serious? Fielding a losing team is a worse offense in your eyes than flaunting racism?

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      • Bobby Ayala says:

        He didn’t flaunt anything, he was secretly and illegally recorded in the privacy of his own home, and yes, failing on purpose in order to maximize profit on such a grand scale is cosmically a greater offense than privately harboring ignorant thoughts.

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        • Stank Asten says:

          First, how was he illegally recorded? First I heard of a law against audio recording.
          Second, no, maximizing profit to the detriment of winning is not a greater business offense than being repeated racist conduct by a franchise owner of a business association, especially when your employees are like 80% black and so is a large constituent of your fans.
          Third, it is almost impossible for anyone to prove that an owner is purposefully losing games for profit. It’s above all idiocy. Losing is bad for profit. And besides, teams under such so-called cosmically evil owners like Loria and McCourt have done rather well. You should not assume that a court thinks like a fan.

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        • The Stranger says:

          Several articles on the Donald Sterling tapes have noted that recording a conversation with somebody without their knowledge is illegal under California law. Just saying.

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        • Stank Asten says:

          Doesn’t necessarily follow that Sterling was illegally recorded, and your journalists are greatly simplifying the CA law if they present it that way.

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  8. Paul G. says:

    As to the removal of a MLB owner, there are often ways to push an owner out without having to resort to such unpleasantries. See Frank McCourt.

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    • Baltar says:

      Yes, you can push an owner out by bribing him a billion dollars.

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      • Breadbaker says:

        When he’s in the midst of a public and contentious divorce. For some reason, Mrs. Sterling remains married to him. She sues his girl friends, but remains married.

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  9. BenRevereDoesSteroids says:

    You know, in the 1870s, the National League had issues with the original Cincinnati Reds selling beer at their games. But they didn’t force the uncooperative owner to sell the team, they kicked the entire franchise out of the National League!

    I think that would be an interesting way to go about things nowadays. It would certainly be devastating to a bad owner if his team had to move from the MLB to the frontier league or shut down or something. That would be alot of money lost. Of course, it could also be alot of money lost to the MLB. But then again, I’m sure that there are plenty of billionaires out there willing to found a new franchise #30.

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  10. Sensitivity Training says:

    I have real issues with the Sterling situation. This thought police mentality is just as disturbing as Sterling’s ignorance when it comes to race relations. We’re essentially seeing the Mozilla situation repeated.

    What happens if an owner comes out with a public position on gay marriage or abortion or gun control or any other hot topic issue. If the comish happens to have a different opinion that owner is subject to a $2.5M fine? If the comish can convince 75% of the owners to side with him they can force a sale?

    Sterling is a slime ball in my book. And that was long before he made his idiotic comments. However, a free market solution would have worked fine here. Let sponsors pull out, let his players sit out in protest, have free agents boycott him. If the public chose not to forgive him his franchise would collapse and he would be forced to sell for pennies on the dollar.

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    • Erik says:

      The problem with that is that every other franchise will have to bear part of the burden of what Sterling had done.

      Ultimately the free market solution would lead to exactly what we see happening here. It would only take a lot longer and be far more painful for the league as a whole.

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    • David says:

      How is this not a free market solution? A private organization or association is kicking out one of its members because he’s become bad for business. Why do they other owners have to wait for more harms to come to them before acting?

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    • Joe says:

      This IS a free market solution.

      It is a private organization reacting to market concerns on its own with no government interference whatsoever.

      It doesn’t get any more free market

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      • Swingdoc says:

        Maybe free market but other owners have a vested interest in making sure value hit is taken by Sterling and not them. IMO, this will never make it out of the courts in Sterling’s lifetime which gives his estate the step up in basis that will more than pay litigation costs.

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        • Stank Asten says:

          Sterling is not going to fight this. What is he going to argue? Protection of the NBA Constitution?

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        • Jason B says:

          “Sterling is not going to fight this.”

          I would make a heavy wager on the other side of that statement.

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        • Stank Asten says:

          Yeah because why wouldn’t an 80 year old man want the publicity of a lawsuit against the NBA while already involved in a seedy case? Good thing he’s got the public opinion on his side and there’s no skeletons in his closet, right?

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        • The Stranger says:

          Since the 80-year-old man is Donald Sterling, I’m certain he wants a lawsuit against the NBA. By all accounts, he loves litigation and wants to be at the center of everything – he gets none of that by quietly going away. He’s not worried about being vilified – that would imply that he cares about anybody’s opinion.

          To fight it, all he has to do is argue the points Wendy raises in her article. Deny the ability of the NBA to force a sale, and refuse to turn over the keys to the building until he’s exhausted every legal avenue – which could take years, if he wants it to. The lawsuit could easily outlive him, and I’m sure he’d consider that a victory.

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        • Jason B says:

          Just like he didn’t want the negative publicity in fighting the housing discrimination suit, right?

          I’m sure most lawyers would just allow a possibly billion dollar asset to be sold out from under them. Fair point. /sarcasm

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        • Stank Asten says:

          Do you really not see the difference between a housing discrimination lawsuit against your company and fighting a lawsuit against the NBA as an individual based on an event closely tied to your personal life?

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  11. SS Wallonie says:

    “It is necessary that I should die for my people; but my spirit shall rise from the grave, and the world will know that I was right.”

    Adolf Hitler

    Itz coming.

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  12. maqman says:

    According to the LA Times, the conversation itself has some roots in a separate law suit between Sterling’s girl friend, V. Stiviano (V stands for Vanessa), and Sterling’s wife, Rochelle Sterling.
    Almost 50 years younger than him Stiviano was sued last month by Rochelle, who seeks the return of her US$1.8-million Los Angeles duplex as well as a Ferrari, two Bentleys and a Range Rover she said her husband bought for Stiviano.
    Rochelle Sterling apparently claims in the lawsuit that her husband met Stiviano at the 2010 Super Bowl in Miami. The suit goes on to describe Stiviano, 31, as a seductress who targets wealthy older men like the 80-year-old Sterling.
    In her own response to the lawsuit, Stiviano argues that Rochelle Sterling must have known that her husband of more than 50 years had romantic relationships outside of their marriage.
    Whoever has the movie rights wins.

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  13. Spa City says:

    Let’s be fair… Marge Schott was good in the beginning. Everything you read, when she came in she was good… She built tremendous teams and got all the minor league affiliates going…Everybody knows she was good at the beginning but she just went too far.

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  14. Double Standard says:

    If Magic Johnson did the exact same thing as Sterling, and told his white girlfriend to stop bringing white people to Dodger games, would the outrage still be the same?

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    • Breadbaker says:

      Amongst the people with whom you associate, I’m sure it would be larger. But of course you make a whole lot of assumptions about what might actually occur in the real world.

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