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BREAKINGVIEWS-Market forces should be slam dunk for NBA fiasco

Source: Reuters - Wed, 30 Apr 2014 15:49 GMT
Author: Reuters
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(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)

By Jeffrey Goldfarb

NEW YORK, April 30 (Reuters Breakingviews) - National Basketball Association owners can put a little faith in market forces. One of their own, real-estate mogul Donald Sterling, has invited unwanted scrutiny on their game with his racist remarks. The commissioner permanently kicked him out of the league. Among other things, that means Sterling can't attend his own team's games. Where matters get more delicate is with the movement to try and compel Sterling to sell the Los Angeles Clippers.

The league is a private club, where entry requires approval from its small group of members. The by-laws also stipulate an owner can be ousted if three-quarters of the 29 others vote in agreement. And the commissioner said on Tuesday he would urge the board of governors "to exercise its authority to force a sale of the team" and do everything in his power to make it happen.

While other NBA proprietors have condemned Sterling's comments and backed his banishment, it is a bigger step, even if legal, to effectively put the question of property rights to a ballot. After all, it would set a precedent that might leave all NBA owners vulnerable to their own assets being similarly jeopardized. It really shouldn't have to come to that, though.

Already a slew of sponsors, including Virgin America, State Farm and Sprint have severed or suspended advertising deals with the Clippers. It's hard to imagine the team's African-American coach sticking around, or one of any race wanting to be part of the organization. And if the brouhaha hadn't come during playoffs, players would probably have boycotted games. Fans of the Clippers also will have to be persuaded anew to buy season tickets, jerseys and beer.

Similarly to the way debt markets persuaded a reluctant Greece to restructure its finances, Sterling is bound to soon find himself with little alternative but a sale of the Clippers. He's the longest-tenured NBA owner, having paid $12 million for the team in 1981. Forbes estimates it's now worth more than $400 million. For NBA owners mulling a controversial expulsion vote, it's one more element of capitalism to consider.

CONTEXT NEWS

- The National Basketball Association on April 29 banned Los Angeles Clippers owner Donald Sterling from the game for life and fined him $2.5 million for racist comments that elicited outrage from players and fans.

- The league said Sterling confirmed that it was his voice on an audio recording but did not apologize for the remarks. Reuters reported that it was unable to reach Sterling.

- Reuters: NBA bans Los Angeles Clippers owner for life over racist comments

- For previous columns by the author, Reuters customers can click on (Editing by Rob Cox and Martin Langfield)

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