Racial slurs and insights on professional team ownership

The racist remarks allegedly uttered by Los Angeles Clippers owner Donald T. Sterling, and captured in an unauthorized tape recording that went viral, reverberated around the world. The irreverent Sterling’s comments prompted US President Barack Obama, America’s first African-American chief executive, to condemn in no uncertain terms the billionaire’s remarks in a press briefing in Kuala Lumpur during his state visit to Malaysia. It was Obama’s last stop before landing in Manila and was the first state visit of an American president to Malaysia in 50 years.

Certainly the outburst of Sterling has no place in the 21st century where the values of racial tolerance, diversity and inclusion are protected, promoted and defended. Such words were however probably music to the ears of modern-day disciples of the Ku Klux Klan and rednecks who have perfected careers in bigotry and racial discrimination.

The NBA, through its newly minted Commissioner, Adam Silver, took swift and decisive action after some investigations to afford Sterling due process. Silver later announced that the team owner, a major player in the real estate industry, according to ESPN Sports, would be banned for life from the league and fined US$2.5 million (about P112 million). That amount would probably be loose change for the loquacious Sterling who, according to reports, has a net worth of US$6.2 billion (around P279 billion). What cannot be valued and would be difficult to quantify is the probable irreparable damage the racist slur had inflicted on the reputation in business and in the community at large of Sterling who, unfortunately has been bravely battling prostate cancer for the last several years.

Sterling bought the Clippers in 1981 for US$12.5 million (P562.5 million). The franchise is now definitely worth several times the purchase price despite its not so “Sterling” record, pun intended, 13 years after the acquisition. To be sure, as an added pun, the name “Sterling” will be difficult to use now in the context of anything outstanding or noteworthy as in “Sterling qualities, virtues” and the like.

What’s in store for Sterling? ESPN Sports reports that the League’s Board of Governors comprised of the 30 team members will have to put to a vote whether to force Sterling to sell the Clippers team. Three fourths of the team owners would have to affirm his expulsion: that’s 22 out of 29 team owners. This number is probably not difficult to attain given the present mood of the US and other countries where racism in sports like soccer has been repeatedly condemned.

This early therefore, there’s almost a foregone conclusion that Sterling will be voted out. What Sterling does to defend himself or contain his damaged relationship with American society, the sports community, Clipper fans and players and the rest of the world that values respect for races will be his call, of course.

To be sure, there’s no shortage of parties interested in taking over the franchise. Groups have reportedly made a beeline to the Clippers office ready to talk turkey. ESPN Sports reports among those who have expressed interest in buying the team are former LA Lakers star, Magic Johnson and his group; music mogul, David Giffen; Floyd Mayweather and Oscar de la Hoya; and television personality Oprah Winfrey and her group.

The controversy carried in mainstream media and, very viciously, in social media, has the public fascinated with the concept of sports business in general and, in particular, with team ownership in professional sports and all its attendant nuances, business logic and culture. The second edition of the book, “The Business of Sports” edited by Scott R. Rosner and Kenneth L. Shropshire should provide some illumination.

In Chapter One, “Ownership”, the editors state that, “In the US and in professional sports around the globe, the individuals or entities that own various sports enterprises have been instrumental in setting the direction of sports business. As long as there have been professional sports, there have been investors motivated by profits, public attention, winning and community impact.”

Rosner and Shropshire emphasize that the “original” generation of owners was largely composed of men who had playing and coaching backgrounds. Other owners bought teams with the goal of making their team the focus of their entrepreneurship. The team was their business. Though not inconsequential, their monetary investments in their teams (were) paltry by today’s standards, and this ownership occurred during the start-up days of their leagues – an era marked by franchise and league instability. Without the determination and foresight of these owners, the leagues would not have survived.

The two gentlemen state that the second generation of league owners was comprised largely of men who had made money in other industries and whose interest in sports led them to purchase a franchise. This second generation blazed a trail for the current, third generation. This third generation is marked by individuals who have accumulated vast fortunes through outside business interests and who have purchased sports organizations for any number of different reasons – from business to pleasure. Corporations are also an important part of this third generation, with entities such as Red Bull, Comcast (Philadelphia 76ers; Philadelphia flyers) and Cablevision (NY Knicks and NY Rangers) joining the ownership ranks. These corporations look to use their sports holdings to improve their core businesses.

Next week, more on team ownership.