NBA holds firm as Donald Sterling attempts to transfer Clippers ownership to wife Shelly

first_img“The question is if before June 3, the NBA and the Sterlings can work out an arrangement that sets up a procedure for a voluntary sale so that the NBA puts off its process to force the Sterlings to sell,” said USC law and business professor Michael Chasalow. “Or maybe they still have the meeting, but delay the implementation of a forced sale pending a voluntary sale. Or they could ignore it completely.”Floating the possibility of a sale is a dramatic about-face from the Sterlings’ earlier defiance in the face of near-universal opposition. Donald Sterling — who is currently the only league-approved controlling Clippers owner — hired antitrust lawyer Maxwell Blecher, who then wrote a letter to the NBA denying any wrongdoing and rejecting its $2.5 million fine of his client.Shelly Sterling had previously said through various statements released by her representatives — as well as an interview with ABC’s Barbara Walters — that she intended to fight for her stake in the team regardless of what happened to her husband.She had been named in past housing discrimination suits, but settled those — as her attorney Pierce O’Donnell pointed out — without admission of guilt. Many public figures, including Los Angeles mayor Eric Garcetti, have nonetheless protested her continued involvement with the Clippers.Trying to sell the team on her terms could be a further attempt to separate the perception that she is intertwined with Donald.“It’s a play for sympathy,” said USC law professor Jody Armour. “Donald Sterling, himself, is a very unsympathetic character to many people, not just on the basis of his words that were recorded and broadcast, but also on the basis of his history that nobody did anything about for a very long time. … His wife, on the other hand, could say, ‘I’m an innocent party here. He has been philandering on me and I am the victim.’ She’s arguing the NBA can’t use the sins of her husband against the wife.”A sale would carry significant capital gains tax implications for the Sterlings, as sports taxation expert Robert Raiola noted in Sports Illustrated last month. Donald Sterling purchased the Clippers in 1981 for $12.5 million, but the franchise would likely fetch over $1 billion today. Federal and state capital gains taxes on the difference would then exceed $300 million.Silver said Tuesday that he would prefer that Donald Sterling sell the team “on a reasonable timetable” over the process of forcing out the 80-year-old.The NBA formally filed charges on Monday to end Sterling’s ownership of the Clippers, giving Donald Sterling five business days — until next Tuesday — to respond. He can also appear at the June 3 hearing to defend himself.On April 29, Silver banned Donald Sterling for life from the league following the release of audio that captured the Clippers owner making disparaging remarks about African-Americans. Embattled Clippers owner Donald Sterling is attempting to turn his stake in the basketball team over to his wife Shelly, who will then negotiate a sale with the NBA.Donald Sterling agreed this week to transfer his half of the Los Angeles franchise to Shelly Sterling, a source confirmed. Shelly Sterling intends to negotiate with the NBA on her terms, the source said. However, league sources say its Board of Governors will not approve Shelly Sterling as a controlling owner.Any potential transfer of ownership must be approved through a vote by league owners. The NBA stated Friday that it will still move forward with a hearing in New York next week that could oust both the Sterlings, and subsequently cede control of the team to commissioner Adam Silver. “We continue to follow the process set forth in the NBA Constitution regarding termination of the current ownership interests in the Los Angeles Clippers and are proceeding toward a hearing on this matter on June 3,” league spokesperson Mike Bass said in a statement.Article 5 of the NBA Constitution states that no membership can be transferred “in whole or in part, directly or indirectly” without league approval.The member in question — in this case, Donald Sterling — must submit a written request to the NBA commissioner, who then takes steps to vet the new prospective member. NBA owners must then approve the transfer with a three-fourths majority vote.The league has argued that, under its constitution, a three-fourths majority vote to remove Donald Sterling would also remove Shelly Sterling.Legal minds see this as a possible turning point in moving closer to a sale.center_img Newsroom GuidelinesNews TipsContact UsReport an Errorlast_img

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