Steve Ballmer rebrands Clippers

[HomeRunBaker]

I know, the poor guy is having one billion forced down his throat (I assue his estranged wife gets the other half) like a goose being force fed to make pate. My heart bleeds for him.

In this country we have freedom of contract. He agreed to the governance scheme of the NBA which has made the owners rich and will soon make him even richer than he was. He agreed to the terms of the family trust. Why should a court get involved? Are judges experts on the issue of mental competency? Does every dispute have to get adjudicated at the taxpayers' expense?

As for his "unpopular opinions" there are places where people are shot, or stoned, or jailed for unpopular opinions instead of being forced to take a $985,000,000 profit on their initial $15M investment.

Great post.

Sterling signed a franchise agreement with one of the terms being to not do stupid shit that would make 15 corporate sponsors walk away from the NBA product while causing the players to discuss boycotting games as long as Sterling owns the team. He did not live up to those terms. This isn't very difficult to comprehend from where I'm sitting.

I do agree however that this is a great country.

 

[CoRP]

Great post.

Sterling signed a franchise agreement with one of the terms being to not do stupid shit that would make 15 corporate sponsors walk away from the NBA product while causing the players to discuss boycotting games as long as Sterling owns the team. He did not live up to those terms. This isn't very difficult to comprehend from where I'm sitting.

I do agree however that this is a great country.

Make sure no one records your private comments. Precedents are being set daily in this great country of ours where no one has a reasonable expectation of privacy anymore.

 

[Average Reds]

 
Ah America, a country where an 80-year old can espouse unpopular opinions in the privacy of his own home (that would have not been considered outside of societal norms when he was in his thirties), be declared more hated by society than mass murderers and terrorists because of these private comments, subsequently be declared mentally incapacitated by a doctor working with his estranged wife (without a court hearing), and as a consequence be stripped of a $2 billion asset. And everyone stands and applauds.

 
Yes, this is exactly what happened here.

 

[Average Reds]

Make sure no one records your private comments. Precedents are being set daily in this great country of ours where no one has a reasonable expectation of privacy anymore.

 
It's cute when someone thinks that you can't get in trouble with your employer or partners over your private opinions.

 

[Grin&MartyBarret]

Make sure no one records your private comments. Precedents are being set daily in this great country of ours where no one has a reasonable expectation of privacy anymore.

 
Yeah, you can only be blatantly racist in your business dealings for 38 years before the hammer falls. And by "hammer falls", I of course mean that one single private asset you own will make you a billion dollars in a forced sale because you signed a franchise agreement with specific terms relating to the "best interests of fellow franchisees."
 
Next stop, gulags.

 

[Brickowski]

I assume you are both also in favor of eminent domain.
 
Does Donald Sterling even get that $ or does Shelly now that she has been declared the Trustee?

A trustee has no claim to the assets of a trust unless the trustee is also a beneficiary. Presumably Donald Sterling is a beneficiary. If not, he agreed as to who the beneficiaries would be.

Eminent domain is the power to take property for public use, such as the right of way needed to build an airport or a highway. The transactions here are purely private and governed by agreements voluntarily entered into by parties well represented by counsel. They have nothing to do with eminent domain.

 

[Average Reds]

A trustee has no claim to the assets of a trust unless the trustee is also a beneficiary. Presumably Donald Sterling is a beneficiary. If not, he agreed as to who the beneficiaries would be.

Eminent domain is the power to take property for public use, such as the right of way needed to build an airport or a highway. The transactions here are purely private and governed by agreements voluntarily entered into by parties well represented by counsel. They have nothing to do with eminent domain.

 
Fucking Obama ruins everything.

 

[CoRP]

They have everything to do with an asset being quickly taken from an individual and sold by a future ex-wife and some upset business partners while hundreds of millions of dollars of tax liabilities for the individual hang in the balance.

 

[Average Reds]

They have everything to do with an asset being quickly taken from an individual and sold by a future ex-wife and some upset business partners while hundreds of millions of dollars of tax liabilities for the individual hanging in the balance.

 
Are you seriously trying to position this as some sort of civil rights outrage?
 
What happened to Sterling is not something that could happen to anyone.  It's what happens when a man with a decades-long record of viciously abusing people begins to lose his faculties and starts providing ammunition to the vast array of enemies he made over the course of his life.  And he's still walking away from the fiasco he created with more money than any NBA franchise owner has ever seen for their franchise.
 
And let's be clear - he lost control of the franchise because he damaged his partners and they threatened to boot him according to the terms of the agreement he signed when he bought the Clippers.  But his wife beat them to it by invoking the terms of the trusteeship that Sterling himself set up years ago.
 
Oh, and the hundreds of millions in tax liabilities you cite will be generated by the nearly two billion in profits derived from the sale of the asset in question. 
 
Boo fucking hoo.

 

[NortheasternPJ]

i can't wait to see Ballmer court side ala Mark Cuban, only more sweaty.
 
https://www.youtube.com/watch?v=e8M6S8EKbnU

 

[dcmissle]

They have everything to do with an asset being quickly taken from an individual and sold by a future ex-wife and some upset business partners while hundreds of millions of dollars of tax liabilities for the individual hang in the balance.

Your posts are refreshing in a way. I was expecting familiar drivel that the Sterlings should be relieved of their windfall occasioned by his racist remarks. Forbes valued the franchise at about $500 million. According to Darren Rovell this morning, if a voluntary sale had occurred last month before the soap opera, the team would not have fetched a penny more than $900 million, and Ballmer will never be able to view this as an investment in any ordinary sense of that word. It is, instead, an expensive toy. And so every right thinking American should be outraged by the Sterling's good fortune.

 

[dcmissle]

i can't wait to see Ballmer court side ala Mark Cuban, only more sweaty.
 

I can't wait to see if he tries to run the basketball side, as incompetently, or worse, as he ran MSFT these last few years. Does he respect professionals and know the limits of his competence? he Jerry Jones or Steve Bisciotti? Time will tell. For Doc's and the players' sake, I hope it's the latter.

 

[CoRP]

Are you seriously trying to position this as some sort of civil rights outrage?

Yep, I am doing exactly that. You go ahead and justify it however you want. The speed with which an old man was declared incompetent and an involuntary sale of a $2 billion asset was effected is chilling. I had an incapacitated father die recently. Watching family members swirl around his assets and make suggestions about their disposition while he was alive was...unsettling. This is astounding. Especially considering that it's being done under full media glare.

 

[OCST]

I assume you are both also in favor of eminent domain.
 

 
A functioning modern state without eminent domain is impossible.
 
If you want to be against abuse of eminent domain, I'm right there with you.
 
Edit: plus which, as said upthread, WTF does eminent domain even have to do with this.

 

[Average Reds]

Yep, I am doing exactly that. You go ahead and justify it however you want. The speed with which an old man was declared incompetent and an involuntary sale of a $2 billion asset was effected is chilling. I had an incapacitated father die recently. Watching family members swirl around his assets and make suggestions about their disposition while he was alive was...unsettling. This is astounding. Especially considering that it's being done under full media glare.

 
If you are asking whether I agree that Sterling's family is chock full of bad people acting badly, the answer is most certainly yes.
 
Beyond that, how does the enforcement of contractual provisions executed by the person in question many years ago need to be justified?  Or are you of the opinion that we should never enforce contractual provisions that seem unfair when viewed in isolation?
 
I should also point out that you are making a rather significant assumption about when Mrs. Sterling began the process that had her husband declared incompetent to manage his affairs.  I could be wrong, but I don't think we know that. 

 

[CoRP]

If he's been declared incompetent and Shelly is selling the team and the trust gets the money and she runs the trust...then that's kind of fucked up, no?

 

[Cellar-Door]

Yep, I am doing exactly that. You go ahead and justify it however you want. The speed with which an old man was declared incompetent and an involuntary sale of a $2 billion asset was effected is chilling. I had an incapacitated father die recently. Watching family members swirl around his assets and make suggestions about their disposition while he was alive was...unsettling. This is astounding. Especially considering that it's being done under full media glare.

He violated a contract that allowed him to own the asset. The team was gone as soon as he violated the NBA constitution.
As to being declared incompetent, he signed control of a sale over to Shelly. Then immediately forgot about it and declared he would fight it.
He has  fairly advanced Alzheimer's and two different experts he agreed to declared that he had diminished mental capability to run the organization.

 

[CoRP]

He violated a contract that allowed him to own the asset. The team was gone as soon as he violated the NBA constitution.
As to being declared incompetent, he signed control of a sale over to Shelly. Then immediately forgot about it and declared he would fight it.
He has  fairly advanced Alzheimer's and two different experts he agreed to declared that he had diminished mental capability to run the organization.

This actually makes it worse. The only reason no one cares is because Donald Sterling is a major league asshole.

 

[Average Reds]

If he's been declared incompetent and Shelly is selling the team and the trust gets the money and she runs the trust...then that's kind of fucked up, no?

 
If only he hadn't been forced to sign the agreement setting up the trust at gunpoint....

 

[dcmissle]

You are speaking against the backdrop of a disturbing family experience during which those who you would understandably expect the best of were apparently at their worst. That's a gut punch. If it's any consolation, it's not uncommon. Good luck.

 

[CoRP]

 
If only he hadn't been forced to sign the agreement setting up the trust at gunpoint....

Who? The guy with Alzheimer's?

 

[CoRP]

Let's talk about something else. How much money is the next LeBron going to make per year now that a franchise like the Clippers is selling for $2 billion?  $100million per year?

 

[Cellar-Door]

This actually makes it worse. The only reason no one cares is because Donald Sterling is a major league asshole.

How does it make it worse? He owns businesses that are run through a trust. When the trust was set up a process was put in place for the possibility that Donald might lose the mental capacity to run it. He has lost the mental capacity to run it and that process has moved forward.

 

[Average Reds]

This actually makes it worse. The only reason no one cares is because Donald Sterling is a major league asshole.

 
You keep trying to compare this to eminent domain, but eminent domain and/or any sort of asset forfeiture is the taking of private property by the state.  That's an exercise of power that should concern everyone.
 
This is the enforcement of a contractual arrangement between private individuals.  No one cares because it doesn't concern us.  And yes, it's always good to see a major league asshole - who has used the private contractual agreements he designed to flatten his opponents over the years - get what's coming to him.

 

[moly99]

I assume you are both also in favor of eminent domain.

 
Well, without it we would have had no railroads, airports, subway systems, pipelines, etc. Those may all be things people love to hate, but it would be awfully hard to build a functional country without them.
 
Beyond that, though, you are missing the fact that he hasn't been charged by the government. He is being ejected from a private organization for the reason that he has damaged that organization. It's like a student at a religious school being ejected for violating its morality rules by drinking, smoking, etc. It's a weird that after years of committing actual crimes against minorities the NBA finally brought the hammer down on him for a private conversation with his mistress, but he still certainly damaged the league.

 

[Cellar-Door]

Who? The guy with Alzheimer's?

The trust was set up years, probably decades ago.

 

[Average Reds]

Who? The guy with Alzheimer's?

 
When did he set up the trust?  Did he have Alzheimer's then?

 

[CoRP]

I don't know. I don't care anymore. I'm just amazed at the speed with which a guy (whose diminished mental capacity was never raised while this shitstorm was swirling) has been declared mentally incapacitated and relieved of a huge asset in less than a week.  And now this mentally incapacitated guy is apparently suing the NBA for a billion fucking dollars. WTF is going on?  Sounds like a bunch of law firms are having a banner week.

 

[Average Reds]

I get that you think that Donald Sterling is being taken advantage of by his wife and family.  I seriously doubt that anyone would debate you on this.  But why is that a civil rights issue?

 

[CoRP]

Would "old people" rights make you happier? Fwiw, not only did I have a dad die, but I'm also going through a divorce, so I tend to side with the husbands in these kinds of things. It's reflexive. I get that he's an asshole.  I'm not arguing against that.  I get that he's a racist...but my dad called Asians "orientals" and I still didn't let my little sister dip into his IRA until after he died.

 

[bankshot1]

I don't know. I don't care anymore. I'm just amazed at the speed with which a guy (whose diminished mental capacity was never raised while this shitstorm was swirling) has been declared mentally incapacitated and relieved of a huge asset in less than a week.  And now this mentally incapacitated guy is apparently suing the NBA for a billion fucking dollars. WTF is going on?  Sounds like a bunch of law firms are having a banner week.

While I don't have a lot of sympathy for Sterling, if you look at the string of events, it sounds like a bad Hollywood storyline about revenge of the ex-wife (to be). The 80-something hubby gets played by a 30-something mistress, is declared incompetent,, loses control of his assets, ends up in a psych ward, while the X2B, parties with her new boyfriend, and his gf, a 30-something bimbo with a propensity for taping people.

 

[CoRP]

Can you imagine if Donald Sterling was a nice guy and this shit went down?  Future Ex of a nice guy gets him declared mentally incapacitated and sells the team within a week?  No fucking way that happens.

 

[Average Reds]

This appears to be very personal for you and I have no desire to offend, so you have the last word.

 

[Cellar-Door]

Would "old people" rights make you happier? Fwiw, not only did I have a dad die, but I'm also going through a divorce, so I tend to side with the husbands in these kinds of things. It's reflexive. I get that he's an asshole.  I'm not arguing against that.  I get that he's a racist...but my dad called Asians "orientals" and I still didn't let my little sister dip into his IRA until after he died.

See you are taking a personal experience and assuming it is the same as this, which it isn't.
 
The Sterling Family Trust isn't a personal IRA. It is shared property between at the least Donald and Sherry (I would guess that the kids are likely beneficiaries too). Shelly isn't taking anything from him, she is deciding how the assets should be managed.
 
When the trust was set up Donald was put in charge of managing the assets, with the provision that if doctors declared him unable to fulfill that duty it fell to Shelly.
Shelly isn't taking money from the Trust, she is converting the Clippers franchise (which they have to sell under the NBA decision anyway) into cash, which stays in the trust and is subject to the trust rules (likely preventing any party from withdrawing it.)
 
Donald's decision to sue (and likely lose) rather than sell now when the franchise has a bidding war on its hands would almost certainly reduce the value of the trust, not only his shares, but those of his wife.
 
Sure it feels quick, but usually a trustee isn't declared incompetent until there is a problem. People don't want to admit a loved one has declining mental function, so until they screw something up they are allowed to stay on.

 

[Brickowski]

Ballmer probably has pretty good lawyers and if they weren't fairly sure that Sterling would lose Ballmer would not have made the offer. And if Sterling delays or manages to torpedo the sale of the Clippers, Ballmer may have claims against Sterling for tortious interference, among other things.

 

[dcmissle]

I have not seen any complaint, but Sterling's lawyer has been quoted as saying that the suit "has nothing to do with the sale." If true, that means that Sterling is not seeking injunctive relief but only money damages, which means that Ballmer is no differently situated than any of the other owners.

As noted in companion thread, this likely is spleen venting more than anything else, designed to harrass and perhaps embarrass the League and his former partners. Document demands, depositions, leaks and so forth.

 

[CoRP]

This appears to be very personal for you and I have no desire to offend, so you have the last word.

Will you admit at least that the whole process appears to have happened quite quickly and quite conveniently for everyone involved except the old, mean mentally-diminished guy?
 
Even if you admit it just to appease me because I have an stbx asking me about her cut of my somewhat racist and mean father's estate... 

 

[Brickowski]

I have not seen any complaint, but Sterling's lawyer has been quoted as saying that the suit "has nothing to do with the sale." If true, that means that Sterling is not seeking injunctive relief but only money damages, which means that Ballmer is no differently situated than any of the other owners.

As noted in companion thread, this likely is spleen venting more than anything else, designed to harrass and perhaps embarrass the League and his former partners. Document demands, depositions, leaks and so forth.

I haven't read the complaint either, but to get equitable relief he'd have to show (among other things) likelihood of success on the merits. For a legal remedy all he has to do is get past summary judgment, and then the case will drag out until it is settled.

I'm still waiting for the answer and the counterclaims. We might see some big numbers there too.

 

[dcmissle]

Will you admit at least that the whole process appears to have happened quite quickly and quite conveniently for everyone involved except the old, mean mentally-diminished guy?
 
Even if you admit it just to appease me because I have an stbx asking me about her cut of my somewhat racist and mean father's estate... 

"Appears" is the critical word. The one constant of several threads devoted to highly charged subjects here the past several months is that things may be different than how they initially appear

You may well be right, in which case aspects of this are disturbing.

But at least consider the possibility that large chunks of this are a ruse on Sterling's part, and that he is getting the last laugh. In particular:

The offers come in for the team and they are beyond his wildest imagination. Sterling wants to sell.

But he does not want it to appear that he was forced to sell. For him it's a manhood issue.

So you concoct this story about his disability. He does not sue to enjoin the sale because he wants it to go through, but then he sues the world for sport. The disability angle creates cover for not trying to hold the sale up.

I have been in litigation with very wealthy dicks like this guy. The money is mainly about keeping score in a blood sport.

 

[ElUno20]

As a diehard clipp fan, I would like to cast my vote to abolish the salary cap

 

[CoRP]

"Appears" is the critical word. The one constant of several threads devoted to highly charged subjects here the past several months is that things may be different than how they initially appear

You may well be right, in which case aspects of this are disturbing.

But at least consider the possibility that large chunks of this are a ruse on Sterling's part, and that he is getting the last laugh. In particular:

The offers come in for the team and they are beyond his wildest imagination. Sterling wants to sell.

But he does not want it to appear that he was forced to sell. For him it's a manhood issue.

So you concoct this story about his disability. He does not sue to enjoin the sale because he wants it to go through, but then he sues the world for sport. The disability angle creates cover for not trying to hold the sale up.

I have been in litigation with very wealthy dicks like this guy. The money is mainly about keeping score in a blood sport.

If it's a manhood issue, he's not looking like much of a man being declared mentally incompetent by his ex wife. Maybe it's like that mafia guy who wore the bathrobe. Who knows. The whole thing is beyond bizarre.
 
and this is weird too:

As part of the sale agreement, Shelly Sterling and the Sterling family trust have agreed not to sue the NBA and to absolve the NBA of litigation by others, including Donald Sterling.

 

[wade boggs chicken dinner]

I don't know. I don't care anymore. I'm just amazed at the speed with which a guy (whose diminished mental capacity was never raised while this shitstorm was swirling) has been declared mentally incapacitated and relieved of a huge asset in less than a week.  And now this mentally incapacitated guy is apparently suing the NBA for a billion fucking dollars. WTF is going on?  Sounds like a bunch of law firms are having a banner week.

 
I wouldn't say "relieved of assets" - I would say that his assets have been exchanged.  One of the reasons Sterling isn't go win any lawsuits is because he really hasn't been damaged in any way.  His taxes will be paid and both he and his heirs will come out pretty much the same.  In fact, he'll have a ton more cash to pay on women for the remainder of his life.
 
BTW, if you want to see people who are actually relieved of assets in record time, you should do some poking around on termination of franchises....

 

[CoRP]

I will admit that I know nothing about franchise law. Do franchise terminations usually follow some sort of due process?

 

[Brickowski]

Don't confuse sports "franchises" with typical franchise arrangements, e.g. McDonalds or Pizza Hut, where there is a big franchisor and a bunch of small franchisees.

Most states have statutes to protect the little franchisee against the big bad corporate franchisor. These statutes require due process, e.g. prior notice and cause for franchise termination.

The NBA is really a legal cartel formed by 30 big guys. Their arrangement is set out in a constitution which someone posted here (thanks!) to which every owner agreed. This document sets out the grounds for termination and what process is due. The owner being terminated gets a hearing and then there is a vote by the other 29 owners. If 3/4 vote to terminate an owner, he's out. The ousted owner doesn't forfeit his property. He's simply required to convert one form of property (the franchise) into another (cash) at a time when he or she may not care to do so.

 

[snowmanny]

Can anyone explain to me why the Clippers are worth ~4x more than the Bucks? Or whether $2Billion is what most sports franchises are actually worth? I mean, I would have assumed that the Cowboys and Yankees and Red Sox and lots of teams were worth way more than the Clippers. I would have assumed the Celtics were worth as much.

Is there legitimacy to this purchase price or is this like people bidding on tulips or Beanie Babies or something?

 

[PBDWake]

Long story short, TV contracts (and they're up for a new one soon, both the local clippers and the league), the best international marketing, and an extremely owner friendly CBA.

 

[dcmissle]

Ballmer has money to burn, had unsuccessfully pursued at least one other team, and is not getting any younger. He submitted a blow away bid because he knew there were other strong bidders and time was of the essence.

You cannot apply ordinary valuation principles to this and make sense of it. In purely economic terms, this is a poor investment. But how do you value psychic income?

 

[ishmael]

Ballmer has money to burn, had unsuccessfully pursued at least one other team, and is not getting any younger. He submitted a blow away bid because he knew there were other strong bidders and time was of the essence.

You cannot apply ordinary valuation principles to this and make sense of it. In purely economic terms, this is a poor investment. But how do you value psychic income?

This doesn't work from an asset valuation theory, but works pretty well from a utility of money theory. Ballmer has so much of it (and more coming as noted up thread) that spending $2 billion of it on the Clippers may give him more utility than any other purchase he could make.

 

[SumnerH]

Can anyone explain to me why the Clippers are worth ~4x more than the Bucks? 

 

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[Tony C]

yep.
 

Good luck to Doc reporting to this guy:
 
http://www.youtube.com/watch?v=e8M6S8EKbnU

 

I can't wait to see if he tries to run the basketball side, as incompetently, or worse, as he ran MSFT these last few years. Does he respect professionals and know the limits of his competence? he Jerry Jones or Steve Bisciotti? Time will tell. For Doc's and the players' sake, I hope it's the latter.

 
No kidding. what a fucking tool he is -- i knew that from his term at Windows, but a quick glance at that idiotic video just gives confirming images.  I"m guessing he stays out....hopefully for the Clippers that's true.