June 10, 2014 4:21 am

Donald Sterling backs out of $2bn Clippers sale to Steve Ballmer

LOS ANGELES – Los Angeles Clippers owner Donald Sterling has pulled his support from a deal to sell the team to former Microsoft chief executive Steve Ballmer and will pursue his $1bn federal lawsuit against the National Basketball Association, his lawyer said on Monday.

“We have been instructed to prosecute the lawsuit,” said Maxwell Blecher. He said Mr Sterling would not be signing off on the deal to sell.

The $2bn sale was negotiated by his wife Shelly Sterling after Mr Sterling’s racist remarks to a girlfriend were publicised and the NBA moved to oust him as owner.

The lawsuit alleges the league violated his constitutional rights by relying on information from an “illegal” recording of the alleged racist remarks. It also said the NBA committed a breach of contract by fining Mr Sterling $2.5m and that it violated antitrust laws by trying to force a sale.

Mr Sterling agreed to sell the club and to drop the lawsuit last week, assuming “all their differences had been resolved”, his lawyers said. But he decided to not sign the papers after learning the NBA will not revoke its lifetime ban and fine.

Ms Sterling utilised her authority as sole trustee of The Sterling Family Trust, which owns the Clippers, to take bids for the team and ultimately negotiate a deal with Mr Ballmer. The deal would have been record-breaking if approved by the NBA’s owners.

A person familiar with the negotiations who was not authorised to speak publicly said on Monday that there were two options for Mr Sterling – to either sign or go to court. But even if he wins in court, he is ultimately going to be paying himself the damages because his Ms Sterling has agreed to indemnify the NBA against all lawsuits, including by her husband.

Mr Sterling’s comments to V. Stiviano included telling her to not bring black people to Clippers games, specifically mentioning , Magic Johnson, a former player and member of the NBA’s Hall of Fame. They resulted in a storm of outrage from the public and players and even prompted President Barack Obama to comment on what he called Mr Sterling’s “incredibly offensive racist statements”.

Adam Silver, NBA commissioner, ultimately decided to ban Mr Sterling for life, fine him millions and began efforts to force Mr Sterling to sell the team. Those efforts ended with Ms Sterling’s deal with Mr Ballmer.

If this deal ultimately goes through, its terms allow Ms Sterling to remain close to the organisation by allowing for up to 10 per cent of the team – or $200m – to be spun off into a charitable foundation that she would essentially run.

Ms Sterling and Mr Ballmer would be co-chairs of the foundation, which would target underprivileged families, battered women, minorities and inner city youths.

Under the deal Ms Sterling would also become “owner emeritus” and be entitled to continuing perks such as floor seats, additional seats at games and parking.

One of the individuals said the deal also includes conditions that allow Mr Ballmer to buy back the 10 per cent portion of the team for a predesignated price upon Ms Sterling’s death.

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