Donald Sterling's Bargaining Power

NEW YORK, NY - APRIL 29:  NBA Commissioner Adam Silver holds a press conference to discuss Los Angeles Clippers owner Donald
NEW YORK, NY - APRIL 29: NBA Commissioner Adam Silver holds a press conference to discuss Los Angeles Clippers owner Donald Sterling at the Hilton Hotel on April 29, 2014 in New York City. Silver announced that Sterling will be banned from the NBA for life and will be fined $2.5 million for racist comments released in audio recordings. (Photo by Elsa/Getty Images)

We are all aware of the Donald Sterling debacle created by the leaking of tapes of private conversations conducted between Sterling and V. Stiviano. We are also all aware that Donald Sterling owns the Los Angeles Clippers, which is a basketball team in the National Basketball Association ("NBA"). Because of the racist nature of Donald Sterling's leaked communications with Ms. Stiviano, the NBA Commissioner, Adam Silver did the following: 1) he banned Donald Sterling from the NBA for life, 2) he levied a fine against Sterling in the amount of $2.5 Million and 3) he indicated that steps would be taken to sell Donald Sterling's team to some other individual or entity.

Many believe that Donald Sterling does not have a leg to stand on. I don't share this view for two reasons. 1) I'm convinced that the family trust and community estate issues are real barriers and 2) I'm now very intrigued by the anti-trust implications raised by Donald Sterling's newly-retained famed anti-trust attorney, Maxwell Blecher. Both of these issues really go to the idea of the unjust taking of property without due process. It seems many believe that the NBA is the judge and the jury, failing to bifurcate those issues that are within the purview of the NBA's jurisdiction from those issues that are not.

Bifurcating the Issues

I think we can all agree that the NBA has the power to ban Donald Sterling for life (though excessive) and to levy punitive fines against him. On this issue, I also agree that there is probably an agreement that would bar Donald Sterling from litigating these decisions. However, the issue of selling Donald Sterling's (family-owned) team against his wishes amounts to a taking of property without due process. This is a justiciable issue. In other words, I believe it is up to the courts to decide the fate of Donald Sterling's property interests -- not the NBA.

So why Does the NBA Get to Monopolize Who May Own a Basketball Team?

If you or I owned a basketball team that was a part of the NBA's league of teams and the NBA no longer wanted to associate with me, wouldn't the correct response be that we part ways -- I take my team and go on about my business? True -- there is probably not much that I can do with a basketball team that is not associated with the NBA, but who knows? Maybe I could start my own league. Or maybe I would want to sell my own team. Why does the NBA have the power to monopolize whether I can own property that belongs to me? Furthermore, why does the NBA have the power to dispose of property that belongs to me? We don't willy-nilly allow one phone company or one airline company to completely dominate the field, so why have we allowed the NBA, the NFL and the NHL to do so? Yes, I understand the nature of franchise organizations but even in a franchise situation, the franchisee can sell the franchise to someone else if he or she wants to do so.

Bargaining Power -- Leverage

The questions raised above are serious anti-trust considerations that I'm sure the NBA would love to keep in the dark. So just as Donald Sterling was able to leverage the NBA to lower the amount of the fine assessed when he moved the Clippers from San Diego to Los Angeles, I really believe Donald Sterling may likely garner some bargaining power by suing the NBA on an anti-trust theory of recovery.