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Donald Sterling Appears To Be Giving Up Rather Than Fighting The NBA

Memphis Grizzlies v San Antonio Spurs - Game One

Reports this afternoon indicate that Donald Sterling has made a move that seems clearly designed to lead to the sale of the Los Angeles Clippers:

Disgraced Los Angeles Clippers owner Donald Sterling has agreed to allow his wife, Shelly, to negotiate a forced sale of the team, sources with knowledge of the situation told ESPN.

Shelly Sterling and her lawyers have been negotiating with the NBA since commissioner Adam Silver banned her husband from the NBA for life on April 29 for making racially charged comments on an audiotape.

Although the league has yet to accept this arrangement, sources said that if she is willing to sell the entire team with terms that are acceptable to the league, this could bring a startlingly quick end to what appeared to be a protracted legal battle.

Heat star LeBron James said it was “very important” a resolution be reached quickly.

“We don’t want this lingering around our sport,” he said. “It sucks that it happened. The players and owners and everyone associated with this game knows there’s no need for it. So the quicker it gets done, the quicker we can move on.”

James said that Sterling selling the team was “the way it should be.”

“He shouldn’t be part of this league,” James added.

Shelly Sterling does intend to sell the Clippers, but it remains unclear how much of a share — if not all — she’s willing to sell, according to a source with knowledge of the situation. Sources said the only way the NBA would accept the terms of this agreement between Donald Sterling and his wife would be if the team was sold in its entirety.

Among the issues Shelly Sterling is considering, the source said, are the substantial tax obligations she would incur from the sale.

According to IRS rules, the Sterlings would have to pay a federal long-term capital-gains tax of 20 percent and a California tax of 13.3 percent. The tax would be on the difference between what the team was bought for and what it is ultimately sold for. If the team is sold for $1 billion, the Sterlings would be taxed $328.5 million on the sale. Sterling bought the team from Irv Levin in 1981 for $13.5 million.

Ever since NBA Commissioner Adam Silver announced the initial sanctions against Sterling and the league’s intention to seek a forced sale of the team, there has been much speculation about what Sterling would do in response to the controversy. Given that he is a lawyer himself and has had a reputation for being quite litigious in other business dealings, the possibility that he would take the league to court to attempt to block a forced sale, or at least delay it much longer than the league would like, has been openly discussed. At the same time, it’s obvious that Sterling would stand to make a substantial profit from the sale of the team even after taking any tax liability into account so the chance always existed that he would try to drag this process out. Tied up in all of that is the related issue of Mrs. Sterling’s interest in the team, which raises an entirely different set of legal issues.

If these reports are true, though, it would appear that both Sterlings have seen reality. It won’t work out too bad for them, though, given that the Clippers are likely to go for something north of $1 billion.

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About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May, 2010 and also writes at Below The Beltway. Follow Doug on Twitter | Facebook

Comments

  1. bill says:

    i bet there was some “back room” dealing going there, or he has terminal cancer. now we can all “heal”…….LOL!

    Like or Dislike: Thumb up 0 Thumb down 8

  2. de stijl says:

    Sometimes, even a real-life equivalent of a Bond villain has the common sense to stop stroking his Persian cat long enough to tell one of minions to stop digging. Even moral monsters sometimes know that the correct move is to put your stick down, shut your cake hole, and skate to the box.

    Like or Dislike: Thumb up 1 Thumb down 0

  3. Neil Hudelson says:

    @bill:

    I don’t even know what any of that word diarrhea means, but pretty much everything thing you post feels slimey.

    Like or Dislike: Thumb up 4 Thumb down 0

  4. de stijl says:

    @Neil Hudelson:

    Social shaming and shunning were tactics used by the powerful to keep the powerless in line. A quiet word, a public rebuke, and periodic executions kept the outsiders and the proles from muttering their treasonous scandal-mongering anywhere outside their wretched hovels. Submit or the boot. Everyone knew their place.

    Now the proles and the outsiders are using these same tactics against the rich, the powerful, the mighty? To some, this is the jarring inversion of the social order. Inconceivable! Shocking!

    Hence, the word salad and poor imitation of witty snarkiness from the bills of this world. He’s Rod Dreher with a lesser vocabulary and a poorer grasp of grammar.

    Like or Dislike: Thumb up 3 Thumb down 0

  5. bill says:

    @Neil Hudelson: here, i’ll “kneel” it down for you again;
    -he has cancer
    -he may not be here much longer
    -he and the nba need a low profile way out of this
    -he and his “wife” will still be filthy rich, maybe even richer
    -the tossers who acted all insulted (as they collect mega cash) can all pretend they “won”
    -his prostitute gf can get a gig on some lame tv show
    get it now?
    oh, you need another catch phrase -it’s tired.

    Like or Dislike: Thumb up 0 Thumb down 4

  6. Neil Hudelson says:

    @bill:

    here, i’ll “kneel” it down for you again;

    Zing?

    oh, you need another catch phrase -it’s tired.

    Like most things you write, I honestly don’t know what you mean, but tell you what: I’ll make sure to avoid any “catchphrases” if you agree to start writing at least semi-coherent thoughts following grammatical rules. Deal? Let me know if that’s too difficult.

    Like or Dislike: Thumb up 3 Thumb down 0

  7. dazedandconfused says:

    Doc Rivers did a heck of a job with that team this year. Just two blown calls away from being in the conference finals. He has de-knuckleheaded that team by about 85%. This is a statement that would have brought laughs just 2 years ago: “The Clippers are legitimate contenders.”

    That said, how can he compete for top talent? He can’t. It’s unlikely the club would fetch a better price two years from now, my guestimate timeline for what would be a very long, very ugly, and fan-nauseating legal battle.

    Anybody remember when ABC put Rush Limbaugh on Monday Night? Lasted about two weeks. Most people really hate being constantly reminded of racially charged BS while they enjoy their sport.

    Time to sell.

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  8. bill says:

    @Neil Hudelson: ok, stay in school.

    Like or Dislike: Thumb up 0 Thumb down 1

  9. grumpy realist says:

    Now the question is whether Sterling will in fact pay the fine, or whether the NBA will quietly drop it in exchange for him going more or less without fuss.

    The “I will fight until I die!” stance may have been nothing more than Kabuki. Hire a lawyer, pay a retainer of $3000, announce to all and sundry that you will fight until the very end–and then all of a sudden look meek and mild and “allow yourself to see the light” and sell the team without fuss, with the unspoken quid pro quo that the NBA won’t press him any further about the fine.

    Cheap way of getting the team sold at a high price and not pay liabilities.

    Like or Dislike: Thumb up 0 Thumb down 0

  10. grumpy realist says:

    ….except that now the kabuki has gotten REALLY confusing….

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