NBA Constitution and Bylaws

Is there a part that determines who mediates disagreements between owners? Is it the courts or another arbiter?

 

Whoa! Is this real and complete? My understanding is the league never made this public, because it would hurt their labor negotiations with the Union wrt profit sharing, etc.

 

That's what I thought too! But the website is the NBA website, but it appears you should need an account to log into http://mediacentral.nba.com/ . all this time, I've been reading that nobody publicly actually knows what the NBA constitution actually says.

 

After reading it:

1) There is no power to terminate his ownership under the provisions given. The reasons just don't include the offenses he has committed.
2) The commissioner would preside over the hearing or appoint someone else to. In this case he probably has to appoint someone else to preside as he has brought the charges against Sterling.
3) There are no rules of evidence, therefore all evidence can be reviewed regardless of source.
4) The owners waive their right to bring the decision before a court.

Now to clarify that last point for people. Sterling's argument to a court wouldn't be to overturn their ruling because he was innocent, it would be that they are violating the agreement by even bringing up the vote to terminate his rights. He'll probably ask for an injunction against the NBA preventing them from taking the vote and then they'll have a legal dispute over whether his racist comments qualify as grounds for termination under any of the clauses listed.

I don't see how the NBA has a legal leg to stand on to terminate his ownership under this agreement personally.

 

They are probably basing it on Article 35 (c)&(d)

However, punishments are specifically laid out in those sections so again, this seems like an overreach.

 

I have no idea how or on what basis you are making your interpretations of the Leagues legal case, the bylaws or let alone making assumptions of what is or isn't likely in this matter. Instead I'll defer to those who have read and studied the bylaws and the leagues constitution as they probably have a firmer grasp on the principles in questioned. Here's Lester Munson, senior espn legal analyst on the case at hand. http://espn.go.com/espn/otl/story/_/id/10852199/challenge-donald-sterling

Q: What penalties can Silver issue?

A: Under the provisions of the bylaws, Silver has two sets of powers that he may use. Under either, he can issue a lifetime suspension and a substantial fine. Under Paragraph 24(l) of the constitution that was adopted by the NBA owners on Oct. 26, 2005, he can issue a fine of up to $2.5 million, can suspend an owner indefinitely and can order the forfeiture of draft picks. This provision applies to situations that are not covered by specific rules within the constitution. (click on link to read rest)

Q: Is it possible for Silver and the NBA to terminate Sterling's franchise ownership?

A: Yes. Under the terms of Paragraph 13 of the constitution, the owners can terminate another owner's franchise with a vote of three-fourths of the NBA Board of Governors, which is composed of all 30 owners. The power to terminate is limited to things like gambling and fraud in the application for ownership, but it also includes a provision for termination when an owner "fails to fulfill" a "contractual obligation" in "such a way as to affect the [NBA] or its members adversely." Silver and the owners could assert that Sterling's statements violated the constitution's requirements to conduct business on a "reasonable" and "ethical" level.

Any owner or Silver can initiate the termination procedure with a written charge describing the violation. Sterling would have five days to respond to the charge with a written answer. Q: Is it possible for Silver and the NBA to terminate Sterling's franchise ownership?

A: Yes. Under the terms of Paragraph 13 of the constitution, the owners can terminate another owner's franchise with a vote of three-fourths of the NBA Board of Governors, which is composed of all 30 owners. The power to terminate is limited to things like gambling and fraud in the application for ownership, but it also includes a provision for termination when an owner "fails to fulfill" a "contractual obligation" in "such a way as to affect the [NBA] or its members adversely." Silver and the owners could assert that Sterling's statements violated the constitution's requirements to conduct business on a "reasonable" and "ethical" level.

Any owner or Silver can initiate the termination procedure with a written charge describing the violation. Sterling would have five days to respond to the charge with a written answer. Q: Is it possible for Silver and the NBA to terminate Sterling's franchise ownership?

A: Yes. Under the terms of Paragraph 13 of the constitution, the owners can terminate another owner's franchise with a vote of three-fourths of the NBA Board of Governors, which is composed of all 30 owners. The power to terminate is limited to things like gambling and fraud in the application for ownership, but it also includes a provision for termination when an owner "fails to fulfill" a "contractual obligation" in "such a way as to affect the [NBA] or its members adversely." Silver and the owners could assert that Sterling's statements violated the constitution's requirements to conduct business on a "reasonable" and "ethical" level.

Any owner or Silver can initiate the termination procedure with a written charge describing the violation. Sterling would have five days to respond to the charge with a written answer. (Click on link to read)

Q: Sterling is notoriously litigious. Can he go to court to stop Silver from punishing him?

A: Not effectively. When Silver issues his punishment to Sterling, the decision is final. The constitution provides in Paragraph 24(m) that a commissioner's decision shall be "final, binding, and conclusive" and shall be as final as an award of arbitration. It is almost impossible to find a judge in the United States judicial system who would set aside an award of arbitration. Sterling can file a lawsuit, but he would face a humiliating defeat early in the process. There is no antitrust theory or principle that would help him against Silver and the NBA. He could claim an antitrust violation, for example, if he were trying to move his team to a different market. But under the terms of the NBA constitution, he has no chance to succeed in litigation over punishment.

 

So if the NBA terminates his franchise ownership then he has nothing to sell. Am I interpreting this correctly?

 

They would then take control of the franchise, sell it, and give him the proceeds.

 

According this article and another lawyer they had on espn, that's exactly how they are reading the situation... Though both were pretty pessimistic about Sterling's chances of even getting a hearing in court, let alone a ruling. The question becomes (IMO just a guess), if Sterling can challenge in court, the Leagues constitution in this case as nonbinding, not an arbitration and even not legal. In other words he will probably try to challenge the leagues constitution as well as the other owners and Silvers interpretation of the bylaws ie "not meeting contractual obligation."

 

Oops in response to Robbies question, no. The assets/property will still belong to him, he just will no longer be part of the league. He will either be forced to sell by a certain time or the league will take buy him out.

 

edit....answered above

 

So, are we convinced the is real and a complete document? The NBA guards this document closely....no?

 

I guess I am just curious what his assets/property actually is. If it is only a franchise agreement that is being terminated then I wouldn't understand why he would get anything. I know in other franchises when a franchise agreement is terminated by the franchisor the franchisee usually gets nothing. Clearly, this is a different setup, but it is all interesting to me. Are NBA owners even typical franchisees like you might see for a McDonalds, UPS Stores, etc?

 

It's on NBA.com.

 

BTW - I don't think this is the document they really guard. There's nothing in here that's particularly super-secretive on first glance.

 

Article 14 covers the whole process. The NBA takes control of the franchise, sells it, pays off any debts, and gives the remainder of the money to Sterling.

What complicates is that there are minority owners (like the ex-wife), and I'm not sure how that's handled since she's not accused of anything.

 

Im not certain how the NBA is set up and there are no prior cases of the league revoking an owners franchise to compare to, however, Mcdonalds as well as other franchise agreements ARE usually setup with the franchisee maintaining the assets when their franchise is revokes, though only till they are able to liquidate/sell them. In case of mcdonalds, a franchisee is able to sell the business in the instance its franchise is revoked. http://smallbusiness.chron.com/unde...lds-franchise-agreement-terminated-15926.html as well as at http://www.ftc.gov/bcp/franchise/comments/final61.htm

 

Thanks major, didnt want to read through that lol