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All eyes on NBA commissioner as he weighs possible penalties

NBA Commissioner Adam Silver answers questions during a news conference before Game 4 of an opening-round NBA basketball playoff series between the Memphis Grizzlies and the Oklahoma City Thunder on Saturday, April 26, 2014, in Memphis, Tenn.

Mark Humphrey/THE ASSOCIATED PRESS

For his first playoffs at the helm of the National Basketball Association, commissioner Adam Silver undoubtedly was hoping that he would face no tougher task than fining Toronto Raptors' general manager Masai Ujiri $25,000 (U.S.) for "using obscene language in a public setting" – amounting to a single inadvertent f-bomb at a rally before the team's opening game.

But that was before Los Angeles Clippers' owner Donald Sterling handed the NBA a genuine ticking bomb in the form of racist comments allegedly made by Mr. Sterling that were caught on a recording of a phone call to a former girlfriend. Mr. Silver now faces the league's worst crisis in years, one that has reverberated all the way to the White House and triggered a national furor.

All eyes will be on the fledgling commissioner as he examines the results of a league probe and weighs possible penalties – most likely a heavy seven-digit fine and a suspension. Whatever he decides is unlikely to placate those calling for the 81-year-old property magnate to be kicked out of the rich white men's club that controls a league where slightly more than 88 per cent of the players and a large portion of its market are non-whites.

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"It is an absolute nightmare for everybody involved, and that is not limited to Donald Sterling, the NBA and the Los Angeles Clippers," said sports lawyer Darren Heitner, a partner with Wolfe Law Miami. "The issue transcends basketball."

This is not the first time Mr. Sterling has been in trouble over his behaviour. But despite his well-earned reputation as one of the worst owners in all of professional sport, he's a first-time offender as far as the NBA is concerned. That's because none of the other incidents or legal actions – including a bitter failed lawsuit by general manager Elgin Baylor, a legendary former player, over wrongful dismissal on the basis of race and age and a federal housing discrimination lawsuit that led to a record $2.7-million settlement – ever triggered league penalties or even mild warnings.

"Should the NBA have been more proactive and instituted harsher penalties based on Donald Sterling's past acts? Certainly," Mr. Heitner said. "Now the NBA has no choice but to impose strong discipline."

But he will almost certainly retain control of his Clippers.

The league's options are likely to be limited to a hefty fine and a suspension of one or possibly two years. Any attempt to strip Mr. Sterling of his team, which would require a vote of three-quarters of the league's governors, would probably result in costly litigation.

"I don't think you're going to see a situation where the NBA is in a position to force him to sell the team," said Eric Macramalla, a sports legal analyst and partner with Gowlings in Ottawa.

One reason is that Mr. Sterling, whose net worth has been pegged just south of $2-billion, would likely respond to any such effort with an anti-trust lawsuit against the league, accusing fellow team owners, who are his competitors under the law, of trying to push him out. By forcing him to sell, the value of the team would be driven down, hurting him financially.

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"The potential for monetary damages is massive," Mr. Macramalla added.

Beside the unsavoury prospect of a protracted legal battle that could endanger the league's financial health and stability, fellow owners would also be wary of allowing their employee, the commissioner, to turf one of their own out of their club.

There is also the small matter of the NBA's own constitution.

"There are broad powers in place under the NBA's constitution and bylaws that include a range of sanctions," Mr. Silver said. "All of those will be considered depending on the findings of our investigation."

But the NBA commissioner doesn't have the sweeping powers that enabled Major League Baseball to oust serial bigot Marge Schott from her ownership of the Cincinnati Reds in the 1990s. And even then, it took two suspensions and a series of bizarre diatribes against people of various creeds and colours to push her out.

The NBA's rules give the league the power to take over a team for financial reasons, as has occurred in the National Hockey League and MLB. "But it doesn't provide for a team to be taken over because of a racial slur," Mr. Macramalla said. "I just think from a legal standpoint, there are too many hurdles for the NBA to force him to sell."

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Some league insiders expect that Mr. Sterling, though famously stubborn, is liable to sell anyway, as he is involved in an increasingly nasty dispute with his estranged wife, who pointedly showed up courtside at the Clippers' latest playoff game after her husband had accepted league advice to stay away.

Dallas Mavericks owner Mark Cuban, who has been fined on several occasions for comments critical of league policies, would not be drawn into the discussion of Mr. Sterling's future, calling it a league matter.

"To be clear, I abhor all forms of racism or any discrimination. This issue shouldn't be about talking heads, it should be about substance only," he said on Twitter Sunday.

The uproar is already costing the Clippers financially and Mr. Sterling personally.

Ten companies have dropped or suspended their sponsorships with the team, including CarMax, which operates a big chain of car dealerships, and insurer State Farm, which says it will "pause" its sponsorship while retaining ties to team star Chris Paul, who also happens to be president of the National Basketball Players Association.

Meanwhile, the Los Angeles chapter of NAACP, apparently unaware of Mr. Sterling's past strange behaviour, has cancelled the lifetime achievement award it planned to hand out at a dinner in May.

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About the Author
Senior Economics Writer and Global Markets Columnist

Brian Milner is a senior economics writer and global markets columnist. In a long career at The Globe and Mail, he has covered diverse business beats, including international trade, the automotive industry, media, debt markets, banking and the business side of sports. More

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