Sterling suing NBA for $1 Billion

[TerryMathews]

One Alzheimer's symptoms don't include making racist statements as a symptom.

It does cause an inability to filter thoughts you wouldn't normally say.

 

[Artorias]

In this thread: people who have no idea what a licensed franchise is.

Pretty much this.

Licensed franchise is a lot different than complete ownership of something, although I echo Mark Cuban's sentiments that its a slippery slope when this goes through.

 

[GagHalfrunt]

Is there a way that the NBA can sue him for a billion and he sues the NBA for a billion and they both lose a billion? I'm rooting for that.

 

[actuarial]

They can "kick him out", but they cannot force him to actually sell rights or property he legally owns. Which is what he is fighting. He isn't fighting the ban, because the NBA can ban whoever they want.

Yes they can force him to do that. He agreed to those rules to be allowed to own an NBA team. He agreed, in writing, that the NBA can take his team away, sell it, and provide him with the proceeds.

Either way, the NBA didn't do this. His wife sold the team, so the NBA hasn't done anything here.

 

[bradley]

It's an illegal monopoly, and the courts may decide they don't have the right to take away someone's team.

This story cemented my mistrust with the media. Just yesterday, their agenda had me convinced Sterling was giving up without a fight, while being part owner.

And now Mr. Sterling plans to take his case to the Supreme Court, it could very well go there. Why does the NBA not want this scenario, or the Fed govt in their business? Well because it calls into question their illegal monopoly and antitrust issues, which are worth way more than a measly two billion. Currently the NBA, NFL and MLB are sovereign entities that have licenses to print money!

For those who say he stands to win more by selling. He stands to have way more by keeping the team. After taxes, especially after death, his remaining family is left with 1/6th of that entire two billion.

Go old man Sterling! go! I hope this old fucker lives to be 100 with all his wits about him lol!

 

[actuarial]

This story cemented my mistrust with the media. Just yesterday, their agenda had me convinced Sterling was giving up without a fight, while being part owner.

And now Mr. Sterling plans to take his case to the Supreme Court, it could very well go there. Why does the NBA not want this scenario, or the Fed govt in their business? Well because it calls into question their illegal monopoly and antitrust issues, which are worth way more than a measly two billion. Currently the NBA, NFL and MLB are sovereign entities that have licenses to print money!

For those who say he stands to win more by selling. He stands to have way more by keeping the team. After taxes, especially after death, his remaining family is left with 1/6th of that entire two billion.

Go old man Sterling! go! I hope this old fucker lives to be 100 with all his wits about him lol!

There's zero chance this goes to the Supreme Court. His wife got control of the trust and sold the team. The NBA hasn't done anything. And even if they did, he agreed to allow them to take his team to sell it.

And there is no illegal monopoly here. For one, they are not the only professional sports league. The only claim you could make about sports being a monopoly is their control over the labour market (a draft, restricted free agency, salary cap) but those provisions are collectively bargained, which throws the labour control issues out the window.

How would you suggest they operate so they're not an 'illegal monopoly'?

 

[bradley]

There's zero chance this goes to the Supreme Court. His wife got control of the trust and sold the team. The NBA hasn't done anything. And even if they did, he agreed to allow them to take his team to sell it.

And there is no illegal monopoly here. For one, they are not the only professional sports league. The only claim you could make about sports being a monopoly is their control over the labour market (a draft, restricted free agency, salary cap) but those provisions are collectively bargained, which throws the labour control issues out the window.

How would you suggest they operate so they're not an 'illegal monopoly'?

Seriously? In 1976, when the NBA merged with the ABA, Congress indirectly allowed the NBA monopoly rights.

How to operate as to not become a monopoly? For starters, perhaps release the barrier from entry by smaller upstart leagues? Sort of like how (in 1986) the USFL sued and *won* their antitrust case against the NFL for being a monopoly.

Although, unlike the cash-strapped USFL desperate for a quick settlement, old man Sterling still has plenty of time and money to take this to the highest court. If it doesn't make it to the Supreme Court, this thing drags for a long time. This is actually a very fascinating case.

BTW, not only is the NBA a monopoly, they are also an illegal cartel or oligopoly.

 

[Capt Caveman]

Lawsuit will get thrown out. Has zero merit since he gave up rights to the team to his wife and family trust.

His lawyers are just taking advantage of him now.

 

[cabri]

Lawsuit will get thrown out. Has zero merit since he gave up rights to the team to his wife and family trust.

His lawyers are just taking advantage of him now.

Where is the info that he gave up the rights?

Last I heard was the wife tried an end around by having him declared medically incompetent.

Doing so gives her/trust complete control.

If he fights such a ruling and wins, then the sale is invalid plus he could try to go after the NBA possibly for collusion.

 

[Capt Caveman]

Where is the info that he gave up the rights?

Last I heard was the wife tried an end around by having him declared medically incompetent.

Doing so gives her/trust complete control.

If he fights such a ruling and wins, then the sale is invalid plus he could try to go after the NBA possibly for collusion.

Yawn. Did you read the article? Or any other articles on the story?

From the OP's article:

Donald Sterling repeatedly has vowed to fight the NBA's attempts to force him to sell the team. That fight was temporarily derailed this week after sources say he was found by experts to be mentally incapacitated, paving the way for Shelly Sterling to become the sole trustee of the family trust and empowering her to work on an agreement to sell the team to Ballmer.

Earlier in May, two neurologists conducted a number of brain tests on Sterling, 80, at the urging of his family, a source said. Their diagnosis was that he was suffering from Alzheimer's disease, and likely had been for "three to five years."

Sterling's side, as well as his wife's attorneys, had known of the tests' results for some time, the source said. The family trust has rules and guidelines regarding mental incapacitation, which it defined as an inability to conduct normal and regular business affairs.

http://sports.yahoo.com/news/shelly-sterling-agrees-sell-clippers-074235484--nba.html

Sterling opposes the sale, but Shelly Sterling was able to negotiate with Ballmer because her estranged husband was stripped of his ability to act as a co-trustee of the family's assets after two neurologists determined he was suffering from dementia, according to a person close to the Sterling family.

The individual, who is familiar with the trust and the medical evaluations but wasn't authorized to speak publicly, said Sterling was deemed ''mentally incapacitated'' according to the trust's conditions because he showed ''an inability to conduct business affairs in a reasonable and normal manner.''

''There is specific language and there are protocols about what to do, and steps in order to get a sole trustee position and that's what took place in the last couple of days,'' the individual said.

But the lawsuit identifies Donald Sterling as a co-trustee and his lawyer, Bobby Samini, said ''the assertion that Donald Sterling lacks mental capacity is absurd.'' He would not give more details on Donald Sterling's condition.

The suit alleges that the NBA violated Sterling's constitutional rights by relying on information from an ''illegal'' recording that publicized racist remarks he made to a girlfriend. It also says the league committed a breach of contract by fining Sterling $2.5 million and that it violated antitrust laws by forcing a sale.

Shelly Sterling said that she had agreed to sell the team to Ballmer ''under her authority as the sole trustee of The Sterling Family Trust, which owns the Clippers.''

Sterling can try to reinstate his trusteeship by appealing to the California Probate Court.

The NBA said Friday that the league, Shelly Sterling and The Sterling Family Trust had ''resolved their dispute over the ownership of the Los Angeles Clippers.''

''Under the agreement, the Clippers will be sold to Steve Ballmer, pending approval by the NBA Board of Governors, and the NBA will withdraw its pending charge to terminate the Sterlings' ownership of the team,'' it said.

The league said that Shelly Sterling and The Sterling Family Trust also ''agreed not to sue the NBA and to indemnify the NBA against lawsuits from others, including Donald Sterling.''

That means whatever monetary damages Donald Sterling may receive under the suit - filed by his attorney Maxwell Blecher on behalf of Sterling and The Sterling Family Trust - may go out one pocket and back in the other unless he is reinstated as a trustee and can nullify the agreement.

The medical evaluation was made earlier this month when Donald Sterling made voluntary visits to two neurologists who conducted tests, including brain scans, the individual said. Though Donald Sterling is no longer a co-trustee of The Sterling Family Trust, he still retains his 50 percent ownership and still receives proceeds from the sale, the individual said

 

[Phoenix86]

http://www.cnn.com/2014/05/30/us/nba-clippers-sterling/

Sterling's camp, in its lawsuit, claims that the move to terminate his ownership "is unconstitutional, in breach of contract, in restraint of trade, in breach of fiduciary duties and ... is malicious and oppressive."

OK, well he wasn't forced to sell. The NBA never actually followed through because the sale was voluntary.

"(Sterling believes) that the NBA's forced sale ... would create damages of at least $1 billion, which includes capital gains taxes, unnecessary and increased investment-banking fees, legal and transactional costs, and the loss of all future appreciation in the Los Angeles Clippers franchise value," it adds.

Yeah... The sale under these circumstances may have GENERATED $1B. Many people thought the team was worth $800M and bidding might push it into $1B range. However it was never even close to $1B, I think the lowest of the top 5 bids was $1.2B. Also, it wasn't a forced sale. If he wasn't compelled to sell he doesn't have damages.

Sterling acknowledged in his lawsuit Friday: that another of his lawyers wrote a letter to the NBA on May 20 stating that "Mr. Sterling agrees to the sale of his interest in the Los Angeles Clippers."

"This letter confirms that Donald T. Sterling authorizes Rochelle Sterling to negotiate with the National Basketball Association regarding all issues in connection with a sale of the Los Angeles Clippers team," lawyer Doug Walton wrote.

His mental status is pretty moot. If he's competent he has agreed to the sale and his wife negotiating. If he's incompetent his wife has full say anyways.

This lawsuit was filed the day after the sale, which was voluntary. It's primary claim is the sale was forced and all most the damages are tied up in that. I guess he could claim defamation of character or something but this seems very much like a BS suit.

 

[TreVader]

He'll be dead before he loses in court anyway. It's just to tie up nba resources in litigation and he's doing it out of nothing more than spite.


Terrible person and a perfect example of why you shouldn't idolize the rich.

 

[marvdmartian]

They can "kick him out", but they cannot force him to actually sell rights or property he legally owns. Which is what he is fighting. He isn't fighting the ban, because the NBA can ban whoever they want.

This. He has every right to retain ownership, with a CEO or GM running the team on a day to day basis. The ONLY reason the NBA is pulling this crap, is political correctness.

 

[TerryMathews]

Terrible person and a perfect example of why you shouldn't idolize the rich.

There's a difference between idolizing someone and saying that even a racist asshole has a right to own property that he paid for.

 

[Perknose]

In this thread: people who have no idea what a licensed franchise is.

+1 This thread is chock full of shallow OT twerps with zero understanding of contract law bravely standing up for the over privileged because FWEEDOM.

 

[darkewaffle]

I wasn't aware he was diagnosed with Alzheimers, if that's the case and the incapacitation can be backed up by a legitimate condition, then I don't think he's got a leg to stand on. If he doesn't have control over the Trust anymore then there's no sale being forced anyway because Shelly and the other holders can agree to it voluntarily while simply compensating Donald for his % (at least IMO, IANAL).

I might still say it's ethically wrong to have him declared incapacitated, but I think the worst he could do is sue his wife (even that could be problematic given the unique legal nature of a husband/wife pairing) for damages by, say, selling the team now when the value could be greater at a later time (but given Ballmer's "overpay" that seems like it wouldn't hold up either).

 

[Markbnj]

This. He has every right to retain ownership, with a CEO or GM running the team on a day to day basis. The ONLY reason the NBA is pulling this crap, is political correctness.

Honestly, you guys are clueless. If I own a McDonalds franchise, they can terminate my franchise rights for any violation of the agreement I signed. It could say "The owner will not wear a pink tutu on wednesday," and if I get caught wearing a pink tutu on a wednesday then they can move to terminate my franchise agreement. I can bluster, sue, whatever, but if the agreement is clear and the tutu was real I lose.

Let's say I own the building, the land, and the cooking equipment. As a functioning McDonalds franchise it was worth $2.5m. But now I can't use their name. I can't use the golden arches. I can't use the names of the menu items. I can't use their payroll system. I can't use their hiring system. I can't get my food from them. Do I still have a restaurant? No, I have a building and land and equipment worth a lot less than the restaurant was worth. To make it a restaurant again I will now have to source all those things I mentioned above, choose a new name, create a new menu, and build a local customer base for it. On that last point I will have a leg up on a really new restaurant because thousands of people are used to coming to my location to get their quarter-pounders. Whether they will still keep coming for my new menu items is a big question, but I should have some shot at retaining some of them if I can pull the rest off. Unfortunately those former customers might not like the 50% price increase that occurs when I stop using McDonalds distribution system.

That is the reality that Sterling is in. He owns squat. Maybe he owns the stadium, but I doubt it. Maybe he owns the exercise equipment, and some team buses. I have no idea. He might have a building or two. Who cares? The entire value of that team is in its NBA franchise rights. If he violated the agreement and those rights are terminated all that value goes whoosh into thin air. Of course, the NBA doesn't kill teams because that would be bad for business. Guess what? McDonalds doesn't kill franchises either, for the same reason. They have a clause exactly like the one Sterling is bound by: if you do things that screw up the McDonalds brand they can force you to sell them the restaurant.

There's an education for you. You can take the above to the bank, or continue being fools in public. Your call.

 

[edro]

The problem is two fold. One Alzheimer's symptoms don't include making racist statements as a symptom.

Uh, yes it does. You must not have been around any alzheimers patients before.

 

[Perknose]

Honestly, you guys are clueless. If I own a McDonalds franchise, they can terminate my franchise rights for any violation of the agreement I signed. It could say "The owner will not wear a pink tutu on wednesday," and if I get caught wearing a pink tutu on a wednesday then they can move to terminate my franchise agreement. I can bluster, sue, whatever, but if the agreement is clear and the tutu was real I lose.

Let's say I own the building, the land, and the cooking equipment. As a functioning McDonalds franchise it was worth $2.5m. But now I can't use their name. I can't use the golden arches. I can't use the names of the menu items. I can't use their payroll system. I can't use their hiring system. I can't get my food from them. Do I still have a restaurant? No, I have a building and land and equipment worth a lot less than the restaurant was worth. To make it a restaurant again I will now have to source all those things I mentioned above, choose a new name, create a new menu, and build a local customer base for it. On that last point I will have a leg up on a really new restaurant because thousands of people are used to coming to my location to get their quarter-pounders. Whether they will still keep coming for my new menu items is a big question, but I should have some shot at retaining some of them if I can pull the rest off. Unfortunately those former customers might not like the 50% price increase that occurs when I stop using McDonalds distribution system.

That is the reality that Sterling is in. He owns squat. Maybe he owns the stadium, but I doubt it. Maybe he owns the exercise equipment, and some team buses. I have no idea. He might have a building or two. Who cares? The entire value of that team is in its NBA franchise rights. If he violated the agreement and those rights are terminated all that value goes whoosh into thin air. Of course, the NBA doesn't kill teams because that would be bad for business. Guess what? McDonalds doesn't kill franchises either, for the same reason. They have a clause exactly like the one Sterling is bound by: if you do things that screw up the McDonalds brand they can force you to sell them the restaurant.

There's an education for you. You can take the above to the bank, or continue being fools in public. Your call.

/Thread :thumbsup:

 

[TerryMathews]

Honestly, you guys are clueless. If I own a McDonalds franchise, they can terminate my franchise rights for any violation of the agreement I signed. It could say "The owner will not wear a pink tutu on wednesday," and if I get caught wearing a pink tutu on a wednesday then they can move to terminate my franchise agreement. I can bluster, sue, whatever, but if the agreement is clear and the tutu was real I lose.

Let's say I own the building, the land, and the cooking equipment. As a functioning McDonalds franchise it was worth $2.5m. But now I can't use their name. I can't use the golden arches. I can't use the names of the menu items. I can't use their payroll system. I can't use their hiring system. I can't get my food from them. Do I still have a restaurant? No, I have a building and land and equipment worth a lot less than the restaurant was worth. To make it a restaurant again I will now have to source all those things I mentioned above, choose a new name, create a new menu, and build a local customer base for it. On that last point I will have a leg up on a really new restaurant because thousands of people are used to coming to my location to get their quarter-pounders. Whether they will still keep coming for my new menu items is a big question, but I should have some shot at retaining some of them if I can pull the rest off. Unfortunately those former customers might not like the 50% price increase that occurs when I stop using McDonalds distribution system.

That is the reality that Sterling is in. He owns squat. Maybe he owns the stadium, but I doubt it. Maybe he owns the exercise equipment, and some team buses. I have no idea. He might have a building or two. Who cares? The entire value of that team is in its NBA franchise rights. If he violated the agreement and those rights are terminated all that value goes whoosh into thin air. Of course, the NBA doesn't kill teams because that would be bad for business. Guess what? McDonalds doesn't kill franchises either, for the same reason. They have a clause exactly like the one Sterling is bound by: if you do things that screw up the McDonalds brand they can force you to sell them the restaurant.

There's an education for you. You can take the above to the bank, or continue being fools in public. Your call.

I disagree: he also owns the players for the length of their contract. Assuming they are prepaid or funds are held in escrow or he can continue to make payroll there is value in that.

There are a number of alternative professional basketball leagues that I assume would be glad to admit a former NBA team. Might not have the same revenue potential though.

Saying he only owns "maybe the stadium and a few busses" is at best misleading.

 

[JM Aggie08]

Honestly, you guys are clueless. If I own a McDonalds franchise, they can terminate my franchise rights for any violation of the agreement I signed. It could say "The owner will not wear a pink tutu on wednesday," and if I get caught wearing a pink tutu on a wednesday then they can move to terminate my franchise agreement. I can bluster, sue, whatever, but if the agreement is clear and the tutu was real I lose.

Let's say I own the building, the land, and the cooking equipment. As a functioning McDonalds franchise it was worth $2.5m. But now I can't use their name. I can't use the golden arches. I can't use the names of the menu items. I can't use their payroll system. I can't use their hiring system. I can't get my food from them. Do I still have a restaurant? No, I have a building and land and equipment worth a lot less than the restaurant was worth. To make it a restaurant again I will now have to source all those things I mentioned above, choose a new name, create a new menu, and build a local customer base for it. On that last point I will have a leg up on a really new restaurant because thousands of people are used to coming to my location to get their quarter-pounders. Whether they will still keep coming for my new menu items is a big question, but I should have some shot at retaining some of them if I can pull the rest off. Unfortunately those former customers might not like the 50% price increase that occurs when I stop using McDonalds distribution system.

That is the reality that Sterling is in. He owns squat. Maybe he owns the stadium, but I doubt it. Maybe he owns the exercise equipment, and some team buses. I have no idea. He might have a building or two. Who cares? The entire value of that team is in its NBA franchise rights. If he violated the agreement and those rights are terminated all that value goes whoosh into thin air. Of course, the NBA doesn't kill teams because that would be bad for business. Guess what? McDonalds doesn't kill franchises either, for the same reason. They have a clause exactly like the one Sterling is bound by: if you do things that screw up the McDonalds brand they can force you to sell them the restaurant.

There's an education for you. You can take the above to the bank, or continue being fools in public. Your call.

:thumbsup:

Some of the comments in here are laughable.

 

[Phoenix86]

/Thread :thumbsup:

Franchise rights have little to do with anything. He was not voted out of the league. He was not forced to sell his team.

He voluntarily sold the team.

 

[Markbnj]

I disagree: he also owns the players for the length of their contract. Assuming they are prepaid or funds are held in escrow or he can continue to make payroll there is value in that.

There are a number of alternative professional basketball leagues that I assume would be glad to admit a former NBA team. Might not have the same revenue potential though.

Saying he only owns "maybe the stadium and a few busses" is at best misleading.

He owns the players? Did you say he _owns_ the players?

"It's gold, Jerry! Gold, I tell ya!"

So he can force the players to follow him to some no-name league, you know, because he owns them? I don't even need to see the player contracts to know they're protected against any such thing. They play in the NBA, not whatever league Donald Sterling can get to accept him.

Even if they were, you know, owned it wouldn't change a damn thing. The value of the Clippers as an NBA team was x. The value of the Clippers as a team in the new "Old White Guy Basketball League" is x/1000.

 

[Markbnj]

Franchise rights have little to do with anything. He was not voted out of the league. He was not forced to sell his team.

He voluntarily sold the team.

More clueless bullshit. Like he would have sold the team voluntarily under other circumstances. He was forced to sell because he's a racist old fuck that nobody wants associated with the NBA anymore.

 

[IAteYourMother]

I disagree: he also owns the players for the length of their contract. Assuming they are prepaid or funds are held in escrow or he can continue to make payroll there is value in that.

There are a number of alternative professional basketball leagues that I assume would be glad to admit a former NBA team. Might not have the same revenue potential though.

Saying he only owns "maybe the stadium and a few busses" is at best misleading.

The players aren't bound to Donald Sterling, they're bound to the association. Are you serious?