Donald Sterling Is Proof The System Works

The fallout from last week’s exposure of Los Angeles Clippers owner Donald Sterling’s bigoted comments beautifully illustrates the combined power of the First Amendment and the free market. The episode began last week when TMZ released a recorded conversation between Sterling and his purported mistress, “V. Stiviano.” Following public outcry, including by Sterling’s peers among the NBA owners, both the NBA and Sterling’s corporate sponsors repudiated him and terminated their relationships. The public spoke and the market reacted.

Sterling apparently doesn’t want Ms. Stiviano around black people, or doesn’t want his friends to know she is around black people. A Sterling associate seems to have remarked to him about social media pictures of Stiviano with minorities, possibly Magic Johnson or Matt Kemp, both prominent sports figures in Los Angeles. Sterling was upset because, it can be inferred from the recording, he had previously asked Stiviano to remove all pictures of her with black people from her Instagram account. Stiviano rebuts that Kemp is “mixed” and lighter-skinned then she is and Sterling does not demure. Later Stiviano says she will not bring black people to Clippers games and Sterling seems to approve. Sterling says he is comporting with society’s demands so “there’s no racism here,” and that he feeds, clothes and houses the Clippers’s black players.

Condemnation within and without the NBA was immediate. Houston Rockets owner Leslie Alexander sought a way to “disrupt” Sterling’s ownership and said “This kind of behavior can’t be allowed in the NBA by owners, players or anybody. This guy has no place in the family of the NBA.” Portland Trailblazers owner Paul Allen called the comments “abhorrent, and not acceptable for the owner of an NBA franchise or anyone in professional sports.” Legendary player and current Charlotte Bobcats owner Michael Jordan said he was “obviously disgusted.” Other owners called the statements “appalling,” “reprehensible,” “abhorrent” (again), “offensive and feeble-minded,” “hurtful and outrageous,” “hatemongering,” etc.

Clippers players, barred by league rules from altering their in-game uniforms, removed the team name from their warm-up outfits. Charles Barkley, a star player and commentator, called for NBA commissioner Adam Silver to “suspend [Sterling] and fine him immediately.” Magic Johnson said Sterling “should not own a team anymore.”

Soon, Clippers sponsors began severing ties. CarMax, State Farm Insurance, Kia Motors America, Virgin America, AQUAHydraate, Red Bull, Yokohama and Mercedes-Benz all either terminated their relationships with the team or indicated they would do so. Amtrak, Corona and Anheuser-Busch issued statements assuring they also would not sponsor the Clippers.

Then on Tuesday, NBA commissioner Adam Silver suspended Sterling for life and fined him $2.5 million. Sterling is still the team owner and has reportedly said the Clippers are not for sale, and he may sue the NBA to undo the fine, suspension or both, but keeping the team is not viable. The NBA asked former Clippers sponsors to renew the relationships in light of Sterling’s suspension, but it remains to be seen whether they will do so. The fan-base could speak with their wallets and refuse to buy tickets. Players can refuse to sign with the team, or demand premiums. Ultimately, Sterling will either sell now at value already damaged by his personal radioactivity, or sell later for less.

No free government could have exposed and punished Sterling as thoroughly, quickly and measuredly. Sterling’s comments are reprehensible, but he never proposes violence or discrimination. He merely expresses his own bigoted preferences and perspectives. Criminalizing preferences and perspectives is anathema in a free society, no matter how repugnant.

No, this story is about how the First Amendment and the free market made government action superfluous. Everything in this sordid tale happened because people spoke and spent as they see fit. Media outlets as varied as TMZ, Fox News and ESPN publicized Sterling’s comments. Social media, talk radio and yet more media buzzed with public reaction. NBA owners, players, broadcasters and commentators opined on the appropriate response.

Responding to feedback from the public, massive business entities punished Sterling. The Clippers’s sponsors noted the public’s reaction and understood their own corporate well-being was at risk, so terminated contracts that financially benefitted Sterling personally. The NBA hit Sterling financially and banished him. A group of private individuals and companies responded to public discourse by fining Sterling $2.5 million, vastly diminishing the value of his asset (the Clippers), and stripping him of his good standing in the NBA and society.

While some might worry that the power to destroy a man’s reputation and legacy should be retrained, a number of factors obviate such worry. First and foremost, public opinion rarely coalesces so completely that it elicits private economic sanctions. Sterling’s comments were hideous and indefensible, expressing a view for which Americans have no sympathy. In instance where comments are ambiguous or on matters about which people generally disagree, financial responses will vary appropriately.

Second, the scale of the reaction to Sterling’s comments reflects his public statute. A baker or lawyer in Nebraska or Florida could make identical statements and nobody would ever know. A minor-league baseball team owner could make those statements and possibly suffer the same result, but certainly not a multi-million dollar fine. The public reaction reflects the wrong-doer’s public profile, and the economic impact reflects the public reaction.

What an achievement this is – a system free of governmental intrusion that identifies individuals espousing or perpetuating social evils and organically quarantines them from society and the market.

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