Wednesday, April 30, 2014

We Care About Sports

We Care About Sports

When a jealous eighty-year old NBA owner gets caught using racially offensive language America wants to know.  At around two o’clock yesterday afternoon, every television in the gym was airing Commissioner Silver’s press conference to announcement the banishment of Donald Sterling from the Los Angeles Clippers and the NBA.    The Commissioner did the right thing in meting out severe penalties.  However, you have to wonder why it took so long for the NBA to take action against Mr. Sterling.  His business practices, attitude toward minorities, and poor record as an owner warranted this action long ago.

The NBA didn’t take action because Mr. Sterling’s words were highly inappropriate.  Rather, they responded because the players were prepared to take concerted action.  They acted forcefully because the league’s advertising sponsors were withdrawing.  They banned the Clipper’s owner because the fan base seemed to care about this issue.  In other words, the NBA’s action wasn’t about a racial statement.  The league acted because their reputation was at risk.

By the way, Mr. Sterling isn’t going to be hurt by the NBA’s action.  In due course, his ownership interest will be sold to a private equity or hedge fund titan, and he’ll walk away with hundred of millions of dollars in profits.  I’m sure he’ll be able to take his young girl friends to a variety of non-NBA venues.

Meanwhile the other owners and players ought to think carefully about what has just happened.  I’m sure that there are many owners and players who would not want some of their comments about minorities, women, or gays leaked to the media.  Since Mr. Sterling’s punishment was banishment, a player or another owner may one day face the same fate, or the league will wind up looking hypocritical.

In the past several years, we’ve seen the leaders of many of our financial institutions engage in all sorts of questionable business practices.  However, we haven’t dealt with them as decisively as the NBA dealt with Mr. Sterling.  In fact, many of these executives have kept their positions.  Very few senior managers have been banished from the industry.  While we’d prefer to blame regulators or politicians, it really is our own fault. 

We’ve followed every twist and turn in the Sterling saga over the past few days, because we care about sports.  Our television networks pre-empted their soap operas for Commissioner’s Silver’s press conference, and The New York Times carried the story on the front page.  In other words, the public cared enough to force decisive action. When it comes to financial malfeasance, we simply don’t care enough to force meaningful change.  I suppose we’re happy as long as the games continue to be played in the NBA and on Wall Street.

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