Skip to main content
Part of complete coverage from

Sterling vs. the NBA: Who has the edge?

By Danny Cevallos
May 29, 2014 -- Updated 0228 GMT (1028 HKT)
Atlanta Hawks controlling owner<a href='http://www.cnn.com/2014/09/07/us/atlanta-hawks-owner-bruce-levenson-racist-email/index.html?hpt=hp_t1'> Bruce Levenson</a> announced he will sell the team in light of an offensive email he sent. Levenson is not the first sports team owner to face the consequences of his actions: Atlanta Hawks controlling owner Bruce Levenson announced he will sell the team in light of an offensive email he sent. Levenson is not the first sports team owner to face the consequences of his actions:
HIDE CAPTION
Team owners behaving badly
Team owners behaving badly
Team owners behaving badly
Team owners behaving badly
Team owners behaving badly
Team owners behaving badly
Team owners behaving badly
Team owners behaving badly
Team owners behaving badly
Team owners behaving badly
Team owners behaving badly
Team owners behaving badly
<<
<
1
2
3
4
5
6
7
8
9
10
11
12
>
>>
STORY HIGHLIGHTS
  • NBA named Richard Parsons as new CEO of the LA Clippers
  • Danny Cevallos says NBA is moving ahead while Sterling speaks out in Anderson Cooper interview
  • He says the NBA is at beginning of a long and perhaps difficult road to oust Sterling as owner
  • Cevallos: League clearly had authority to fine and ban Sterling

Editor's note: Watch clips of Anderson Cooper's interview with Donald Sterling on "New Day" Monday morning and see the full interview on "AC360" at 8 p.m. ET Monday. Danny Cevallos is a CNN legal analyst, criminal defense attorney and partner at Cevallos & Wong, practicing in Pennsylvania and the U.S. Virgin Islands. Follow him on Twitter @CevallosLaw. The opinions expressed in this commentary are solely those of the author.

(CNN) -- The NBA and the Los Angeles Clippers' organization may have upstaged Donald Sterling's latest soundtrack Friday afternoon with the announcement that Richard Parsons, former Citigroup and Time Warner chairman, is the new CEO of the team.

The public relations contrast was stark: As the National Basketball Association and the Clippers were moving forward, Donald Sterling's statements were coming from surreptitiously (or not so surreptitiously) recorded phone conversations.

But now, he has spoken out directly in an interview with CNN's Anderson Cooper. Sterling says in that interview that he was "baited" into making his controversial statements.

And he makes the argument that he shouldn't be thrown out of the NBA. "I'm a good member who made a mistake and I'm apologizing and I'm asking for forgiveness," he said. "Am I entitled to one mistake, am I after 35 years? I mean, I love my league, I love my partners. Am I entitled to one mistake? It's a terrible mistake, and I'll never do it again."

Danny Cevallos
Danny Cevallos

Sterling is not the only party suffering from this controversy. The NBA stands at the beginning of what will certainly be a protracted legal and procedural battle, one that will cost untold millions. It also will embroil the NBA in an unwanted controversy for years to come.

Having a chief executive of Parsons' stature in control of the team may help the league gain an advantage as a battle over the team's ownership starts to play out, but the NBA's road ahead still will not be easy.

But the NBA asked for this. The fact that players and the public largely supported the league will be of little solace to the NBA when it is paying legal fees for years to come. The legal fees may be the cost of doing business, but if banning and fining Sterling would have been adequate, this was an avoidable cost.

Sterling to 'fight to the bloody end'
Ex-Time Warner chair named Clippers CEO
Does a new tape help Donald Sterling?

The NBA's response to the Sterling controversy is a cautionary tale against meting out hasty, summary punishment. Here's why: The NBA likely had the authority to unilaterally fine Sterling as it did. It also appears to have had the authority to ban him from his team for life. If Commissioner Adam Silver had stopped there, Sterling might have been effectively vanquished, because the decisions of the commissioner are shielded from review by a court.

For the privilege of joining the National Basketball Association, owners contractually give up certain legal rights and remedies. Fining and banning Sterling was probably well within the jurisdiction of the NBA. But in seeking to "max out" Sterling's sentence by forcing him to sell the team, the NBA is forging new legal territory, and doing so at a price.

Sure, there are catch-all provisions of the NBA's rules that ostensibly allow for ouster of an owner who brings harm to the league, but the ouster rules on the whole appear designed for dealing with teams and owners suffering economic or management problems, like failing to make payroll -- not for owners who were private bigots.

There will be an answer to the ultimate question of whether the NBA can legally oust Sterling. We just don't know what it is yet. The league and Sterling can purchase an answer to that question, at the cost of years of litigation and untold fortunes in legal fees.

Moreover, if the NBA's objective was to distance itself from Sterling, they have done the opposite. After years of prolonged public litigation, they will cling to each other as two spent swimmers, choking their own business interests in the process.

Early on, Silver made clear that the punitive measures were directed at Sterling, not at other members of his family. With this blessing, estranged wife Shelly Sterling has injected herself as a blame-free alternative owner. But does she have an ownership interest in the team? Determining true ownership of this team will be a Gordian Knot of litigation: First, there is the issue of whether the NBA can oust an owner where actual "ownership" is disputed. If the team is held in trust, as reported by the Los Angeles Times, and not by a single owner in Sterling, that changes the contours of ownership.

A trust is a legal entity in which property (like a team) is held for the benefit of other persons. It's a protective device, designed for situations just like this: where a beneficiary of a trust is attacked, the property cannot be reached because the beneficiary does not actually "own" the property -- even though he may receive payments or otherwise profit from the property.

The complexity doesn't end there, though. Even without a trust, in California, spouses acquire interests in family businesses when distributing property in a divorce. But that is only a general rule, and who knows what default rules Donald Sterling has attempted to deal with by contract? One thing is for sure, whether it's the NBA, Shelly, or Donald Sterling, each party will mount a different legal argument concerning ownership based upon their own best interests.

Determining the "owner" of the Clippers will be a hodgepodge of legal issues worthy of the bar exam: divorce law, corporate dissolution, trusts and estates law. For now, Shelly Sterling is a cause for concern for the NBA, the other owners, and her own husband. She has leverage, possibly even 50% ownership of the team.

The NBA owners must be longing for the "good old days" when their biggest problems were contract disputes and torn ACLs. We can only guess at the individual owners' respective positions at the moment Silver handed down verdict and sentence against Sterling.

Now, the commissioner has placed the onus on the owners: They have the burden of deciding whether to oust one of their own. It is a Hobson's Choice, which is no choice at all: Even if the owners are privately sympathetic to Sterling, an owner who dares to defend the embattled Clippers owner commits social seppuku.

On the other hand, NBA owners are independent thinkers and independently wealthy; if anyone can weather criticism, it's these captains of industry. Mark Cuban has already publicly observed that "people are allowed to be morons." Whether the owners ultimately cast their ballots for or against Sterling, all of these owners would rather be somewhere else. Public perception aside, the owners have other concerns: If this case goes to litigation, expect broad-reaching discovery demands and subpoenas for sensitive documents and information. This case is a minefield for them, with no real upside.

At the moment, there appear to be a few winners in the Sterling controversy. Kia, CarMax, State Farm Insurance and Virgin America are just some of the companies that pulled advertising from the Clippers after the first tapes were revealed. Ironically, they garnered more buzz by not spending money advertising than they would have by actually spending money on advertising.

It's the ultimate win-win, and it's not over yet. As long as someone else spends the time and money to excise Donald Sterling from the Clippers, the sponsors will have a second photo op. They will return triumphantly to advertising with the team, and take partial credit for the brave stance against one offensive octogenarian -- a stance that didn't actually require them to do, or spend, anything.

Heading into the weekend, the advantage is with Shelly Sterling -- who may have a valid claim to ownership -- the NBA, and Parsons, the highly credentialed, newly anointed CEO. Donald Sterling's next moves will be interesting, though his first moves should be away from the telephone -- at least for now.

Follow us on Twitter @CNNOpinion.

Join us on Facebook.com/CNNOpinion.

ADVERTISEMENT
Part of complete coverage on
October 22, 2014 -- Updated 2101 GMT (0501 HKT)
Paul Callan says the grand jury is the right process to use to decide if charges should be brought against the police officer
October 23, 2014 -- Updated 1619 GMT (0019 HKT)
Theresa Brown says the Ebola crisis brought nurses into the national conversation on health care. They need to stay there.
October 21, 2014 -- Updated 2235 GMT (0635 HKT)
Patrick Hornbeck says don't buy the hype: The arguments the Vatican used in its interim report would have virtually guaranteed that same-sex couples remained second class citizens
October 24, 2014 -- Updated 1336 GMT (2136 HKT)
Paul Begala says Iowa's U.S. Senate candidate, Joni Ernst, told NRA she has right to use gun to defend herself--even from the government. But shooting at officials is not what the Founders had in mind
October 23, 2014 -- Updated 2208 GMT (0608 HKT)
John Sutter: Why are we so surprised the head of a major international corporation learned another language?
October 23, 2014 -- Updated 2154 GMT (0554 HKT)
Jason Johnson says Ferguson isn't a downtrodden community rising up against the white oppressor, but it is looking for justice
October 24, 2014 -- Updated 1621 GMT (0021 HKT)
Sally Kohn says a video of little girls dressed as princesses using the F-word very loudly to condemn sexism is provocative. But is it exploitative?
October 21, 2014 -- Updated 2006 GMT (0406 HKT)
Timothy Stanley says Lewinsky is shamelessly playing the victim in her affair with Bill Clinton, humiliating Hillary Clinton again and aiding her critics
October 23, 2014 -- Updated 1414 GMT (2214 HKT)
Imagine being rescued from modern slavery, only to be charged with a crime, writes John Sutter
October 21, 2014 -- Updated 1600 GMT (0000 HKT)
Tidal flooding used to be a relatively rare occurrence along the East Coast. Not anymore, write Melanie Fitzpatrick and Erika Spanger-Siegfried.
October 21, 2014 -- Updated 1135 GMT (1935 HKT)
Carol Costello says activists, writers, politicians have begun discussing their abortions. But will that new approach make a difference on an old battleground?
October 21, 2014 -- Updated 1312 GMT (2112 HKT)
Sigrid Fry-Revere says the National Organ Transplant Act has caused more Americans to die waiting for an organ than died in both World Wars, Korea, Vietnam, Afghanistan and Iraq
October 21, 2014 -- Updated 1851 GMT (0251 HKT)
Crystal Wright says racist remarks like those made by black Republican actress Stacey Dash do nothing to get blacks to join the GOP
October 21, 2014 -- Updated 2207 GMT (0607 HKT)
Mel Robbins says by telling her story, Monica Lewinsky offers a lesson in confronting humiliating mistakes while keeping her head held high
October 20, 2014 -- Updated 1329 GMT (2129 HKT)
Cornell Belcher says the story of the "tea party wave" in 2010 was bogus; it was an election determined by ebbing Democratic turnout
October 20, 2014 -- Updated 2012 GMT (0412 HKT)
Les Abend says pilots want protocols, preparation and checklists for all contingencies; at the moment, controlling a deadly disease is out of their comfort zone
October 20, 2014 -- Updated 0336 GMT (1136 HKT)
David Weinberger says an online controversy that snowballed from a misogynist attack by gamers into a culture war is a preview of the way news is handled in a world of hashtag-fueled scandal
October 20, 2014 -- Updated 1223 GMT (2023 HKT)
Julian Zelizer says Paul Krugman makes some good points in his defense of President Obama but is premature in calling him one of the most successful presidents.
October 20, 2014 -- Updated 0221 GMT (1021 HKT)
Conservatives can't bash and slash government and then suddenly act surprised if government isn't there when we need it, writes Sally Kohn
October 22, 2014 -- Updated 1205 GMT (2005 HKT)
ISIS is looking to take over a good chunk of the Middle East -- if not the entire Muslim world, write Peter Bergen and Emily Schneider.
October 20, 2014 -- Updated 1300 GMT (2100 HKT)
The world's response to Ebola is its own sort of tragedy, writes John Sutter
October 17, 2014 -- Updated 2033 GMT (0433 HKT)
Hidden away in Russian orphanages are thousands of children with disabilities who aren't orphans, whose harmful treatment has long been hidden from public view, writes Andrea Mazzarino
October 18, 2014 -- Updated 1722 GMT (0122 HKT)
When you hear "trick or treat" this year, think "nudge," writes John Bare
October 18, 2014 -- Updated 0442 GMT (1242 HKT)
The more than 200 kidnapped Nigerian schoolgirls have become pawns in a larger drama, writes Richard Joseph.
October 17, 2014 -- Updated 1345 GMT (2145 HKT)
Peggy Drexler said Amal Alamuddin was accused of buying into the patriarchy when she changed her name to Clooney. But that was her choice.
October 16, 2014 -- Updated 2043 GMT (0443 HKT)
Ford Vox says the CDC's Thomas Frieden is a good man with a stellar resume who has shown he lacks the unique talents and vision needed to confront the Ebola crisis
October 18, 2014 -- Updated 0858 GMT (1658 HKT)
How can such a numerically small force as ISIS take control of vast swathes of Syria and Iraq?
October 17, 2014 -- Updated 1342 GMT (2142 HKT)
How big a threat do foreign fighters in Syria and Iraq pose to the West? It's a question that has been much on the mind of policymakers and commentators.
October 17, 2014 -- Updated 1221 GMT (2021 HKT)
More than a quarter-million American women served honorably in the Iraq and Afghanistan wars. Now they are home, we have an obligation to help them transition back to civilian life.
October 16, 2014 -- Updated 2027 GMT (0427 HKT)
Paul Begala says Rick Scott's deeply weird refusal to begin a debate because rival Charlie Crist had a fan under his podium spells disaster for the Florida governor--delighting Crist
October 16, 2014 -- Updated 0407 GMT (1207 HKT)
The longer we wait to engage on Ebola, the more limited our options will become, says Marco Rubio.
October 15, 2014 -- Updated 1153 GMT (1953 HKT)
Democratic candidates who run from President Obama in red states where he is unpopular are making a big mistake, says Donna Brazile
October 16, 2014 -- Updated 0429 GMT (1229 HKT)
At some 7 billion people, the world can sometimes seem like a crowded place. But if the latest estimates are to be believed, then in less than a century it is going to feel even more so -- about 50% more crowded, says Evan Fraser
October 20, 2014 -- Updated 1653 GMT (0053 HKT)
Paul Callan says the Ebola situation is pointing up the need for better leadership
October 15, 2014 -- Updated 2245 GMT (0645 HKT)
Nurses are the unsung heroes of the Ebola outbreak. Yet, there are troubling signs we're failing them, says John Sutter
October 15, 2014 -- Updated 1700 GMT (0100 HKT)
Dean Obeidallah says it's a mistake to give up a business name you've invested energy in, just because of a new terrorist group
October 15, 2014 -- Updated 2301 GMT (0701 HKT)
Fear of Ebola is contagious, writes Mel Robbins; but it's time to put the disease in perspective
October 14, 2014 -- Updated 1744 GMT (0144 HKT)
Oliver Kershaw says that if Big Tobacco is given monopoly of e-cigarette products, public health will suffer.
October 18, 2014 -- Updated 1335 GMT (2135 HKT)
Stop thinking your job will make you happy.
October 15, 2014 -- Updated 0208 GMT (1008 HKT)
Ruben Navarrette says it's time to deal with another scandal involving the Secret Service — one that leads directly into the White House.
October 14, 2014 -- Updated 1125 GMT (1925 HKT)
Americans who choose to fight for militant groups or support them are young and likely to be active in jihadist social media, says Peter Bergen
October 13, 2014 -- Updated 1303 GMT (2103 HKT)
Stephanie Coontz says 11 years ago only one state allowed same sex marriage. Soon, some 60% of Americans will live where gays can marry. How did attitudes change so quickly?
October 14, 2014 -- Updated 2004 GMT (0404 HKT)
Legalizing assisted suicide seems acceptable when focusing on individuals. But such laws would put many at risk of immense harm, writes Marilyn Golden.
October 13, 2014 -- Updated 1307 GMT (2107 HKT)
Julian Zelizer says the issues are huge, but both parties are wrestling with problems that alienate voters
October 13, 2014 -- Updated 2250 GMT (0650 HKT)
Mel Robbins says the town's school chief was right to cancel the season, but that's just the beginning of what needs to be done
October 11, 2014 -- Updated 1543 GMT (2343 HKT)
He didn't discover that the world was round, David Perry writes. So what did he do?
ADVERTISEMENT