cost so much, and the reindeer are probably celebrating. thank you for watching. i'm del walters in new york. "inside story" is next. and a reminder we'll carry that news conference on the nba live at 2:00. >> are values different when you're in the entertainment business. dirty laundry, public opinion and the business of sports is the inside story.

>> verbal, i'm ray suarez. the nba inquest whether donald sterling said shows nasty things about black people is still i don't kno still idon't kno on going. what is not at issue is whether sterling has the legal right to say what he said. he sure does when you're in the entertainment business you're at risk of blow back from the public and bizarrely immune to it as well. artificial scarcit scarcity makes sterling hard to go after. disparaging the very black men who create the thrills on the court and make even historically mediocre teams like the clippers

hugely profitable, but it's far from clear what am mission has to protect its brand, it's following and protect itself from a guy whose loose talk could cause serious damage. over the weekend entertainment news outlets tmzs and dead spin released audi audio that is allegedly between donald sterling and his female friend :

>> those comments ignited at controversial, tillering has long been the owner of the los angeles clippers. he is said to have made the racially racial remarks. only one owner has been suspended in the 70-year history of the nba. now the fate of team sterling teams to be in the hands of the new commissioner. he has only been o on the job fr a few months and said he will move quickly to move this to a close. >> all members of the nba family should be afforded due process and opportunity to present their side of any controversy, which is why i'm not yet prepared to discuss any potential sanctions against donald sterling. >> the nba commissioner works for the owns. while sterling's office urged

restraint, reaction on and off the court was swift. the la clippers staged a silent protest. they took off their warm up jackets and revealed uniforms inside out hiding the team logo and wore black arm bands and black socks. doc rivers is their coach. >> the biggest statement we can make as men, not black men but men to stick together and show how strong we are of a group. not sprinter, not walk. it's easy to protest. the protest will be in our play. >> we found a way to make this the greatest game in the world. for comments like that, it takes our game and we can't have that. we can't have it from a player. we can't have it from an owner from a fan . >> reporter: michael jordan now owns the charlotte bobcats.

he is the only black owner in the league. he said i'm disgusted that a fellow team owner could hold such offensive views. president obama is traveling in asia, but he, too, weighed in on the controversy. >> when ignorant folks want to show their ignorance. you really don't have to do anything but let them talk. that's what happened here. >> reporter: the man reported to be sterling objects to his girlfriend proudly posting pictures of herself with african-american people.

>> former laker start magic johnson is now part of the group that now owns the los angeles dodgers. johnson reacted to the audio tape saying he would not attend another los angeles clippers game as long as sterling is the owner. this is not the first time donald sterling has found himself in the middle of race based controversy. in a 2009 settlement sterling paid 2.79. million dollars. he had driven out african-american and hispanic families in several apartments sterling owned around los angeles. sterling has clashed with the nba before. in the mid 80's then commissioner david stern fined the clippers owner $6 million for moving the team from los angeles from san diego without league approval.

team ownership is an elite club. once you're in its hard to get kicked out, but it has had. an owner was suspended for making disparaging remarks about blacks and japanese. later when she said that hitler was good in the beginning she was suspended for three more years, and the year later she sold her stake in the team. but baseball and basketball are different. the baseball commissioner can make decisions in the best interest of the game. the commissioner of the nba does not have that broad power. owners can be forced out by consent but only over financial reasons, not moral. there will be an announcement on sterling's case on tuesday. >> who knows if any other major sports owners consider players as pap perked serfs.

donald sterling has presented the other nba owners with a problem, but now what? that's this time on inside story. joining us to discuss the business of sports and the touchy subject of race in a sport where most of the players are black and almost all of the team owners are white from toronto, a managing partner in entertainment spots. in los angeles, paula madison former owner of the los angeles sparks a wnba team, and from philadelphia, kevin shropner from the pennsylvania waterren school of business. who is being harmed here. those right, left and center say those remarks are reprehensible, but whose interests are harmed by what we found out over the weekend? >> well, everybody, we're so far beyond this as a society. we've made so many steps.

you think of the interrogation of major league baseball in 1947, it's incredible that these kinds of beliefs would be held at this point in time. what is not incredible is that they would be expressed privately . this facts the players, the owners, the league, and all of us for having this public conversation about such an negative event. >> if i'm an owner somewhere else in the league and i make my obligatory statement that i find these comments repugnant and then attempt to move on, am i in any ongoing jeopardy? is the remark of one owner going to weaken my business, reduce the value of my team. >> i don't know that it will reduce the value of the team. all those teams are very

lucrative, however, what i do think in this case it is for certain that if it turns out that these comments were made by donald sterling, that donald sterling sitting in the owner's chair of the clippers is going to damage that particular franchise. i think that right now what we are seeing is you're not hearing any comments from anyone associated from the nba because they have to wait for adam silver to be the lead person. by the way, you probably know that adam has been the heir apparent of the nba as commissioner for many years behind david stern. so we all know him. all the owners, i am a former owner of the wnba team. but we all know adam, and adam is a good, decent, measured man. i think that he is right now in a terrible position because whatever sanction he might come

up with, it won't be enough for people who like me who just think that when you take a look overwhelmingly at the contracts that the players have in the nba, there are such things as moral clauses. we've seen players sanctioned. we've seen players fined. we've seen players ex-spelled because of things they have said and done. but when you're an owner you're vetted just at the beginning process. when you're checked out to determine whether or not up the finances, the community standing and even the moral character to be the owner of a team, but once you become a member of that board of governors rarely are you subject to further scrutiny except in the area as you say your report financially. it may be time, frankly, for the board of governorrers, the 30 person board of the nba, to determine along with the commissioner that there should be some other criteria that owners of an nba team have to meet.

>> is it important to make a distinction between racism as something that you say versus you do? no one has spoken up over the weekend about the contracts of clippers players, their pay levels, the conditions under which they work. there is no . >> there is no reports that he was treating people badly. is there a difference between something you say and what you do. the key parts to look at this the league has an opportunity. i think the nba is an unique product in comparison to a bunch of other leagues and this presents a real challenge. the commissioner really is in a composition to take that professional league in a new direction.

i believe in moral clauses. you see this in the corporate world as well. ithe club maintains the right to dissociate itself with corporate entities, a great example is enron. but that is not with the players. the commissioner said as a nba family. this is a refrain adopted by the league. when you have this notion of a family, it really does blur the lines between what is purely legal in business and what is customary and the type of practice encouraged informally. that's the piece that i think will put the nba in position of putting their money where their mouth is, either they're family where you respect the rights of

the each person within that unit, or you're a business. they really have tried to blur that a little bit . >> we're going to take a short break. when we come back we'll delve further into that very question versus what's legal and what's customary. what you can do and what you should do in the business from

>> you're watching "inside story." i'm ray suarez. on this edition of the program we've been talking about the fallout from remarks allegedly

made by los angeles clippers' owner donald sterling. some big corporate sponsors have begun to distance themselves from the team. car max, require gin america, the airline, and state farm the insurance giant. paula madison, when something like this happens in 2014, can you just lay low and wait for it to blow over before you show your hand, or is this the kind of thing that the state farm is a major sponsor because they use a clipper star as their principle spokesman. do you stand up and see where you land on this thing? >> i think what we're looking at right now is in many ways an unfortunate repeat of what don imus referred to the rutgers women's basketball team back in 2007. i think in order to save the value of the clippers, i think in order to keep the fans of the

clippers and not damage the nba's reputation any more, donald sterling should consider selling this team. i have no idea, but if he bought the team at $20 million, and it's considered to be worth $300 million. moment ago they were in contention to a championship. one could argue that his actions would weaken their chances. he should consider contacting the league and saying help me find a buyer for this team, and it's probably a good time for donald sterling to step down. >> can anybody make him make that decision even if they can't do it by statute, law, or can owners make a situation over time uncomfortable for another owner? >> well, that's right. it can be a long process.

you can move in that direction. when you look at the situation, the reds in that opener, that's what that was, a series of suspensions that led her to sell all but a small interest in her team. as paula suggests, how amble it is donald sterling is to doing the right thing. >> kenneth, if he is persuaded to sell, those may be the most profitable racist remarks ever uttered in sport. he would stand to make a 20-times profit on his original stake in the team. >> that's where i get twisted on this, how much punishment there is. but economically if you're not part of this exclusive club any more that's quite a severe punishment for someone who has enjoyed that for a major portion

of their life. i lean towards if you can make the sale happen, and make the investment happen, short of that, suspensions and heavy, heavy fines. >> does this trickle down to the players? when a young prospect is talking about where to go, if he's been drafted by the clippers, if there is the prospect of a trade, does this kind of thing actually enter into it or is it strictly a dollars and sense proposition when they're talking about managing their careers? >> well, it depends. you know, part of it is there are two types of athletes. the athletes simply see themselves as providing that type of service and athletes try to portray themselves and are very much involved in the community. i think this conversation is now when i speak to agents, and i speak to folks who are directly connected to the athletes, this

is a check box that will be a game changer . we'll touch into it because it connects to a deeper root where the players are on the court and the organization structure. >> are there own whose are known as irascible or hard to work for or likely to stick their nose in the lock room, in the business of the coaches and so on, or conversely places that are known as player-friendly and good places to work. >> the culture of the organization is going to be vastly important to the value, and are the players and people in the organization actively going to game other people or solicit other members to join your team. that's a key piece. the other thing that i think this will turn on is the relationships that the nba can

use behind the scenes. to make this palatable for mr. sterling. allow him to step aside so this issue is not about him, but moving the league forward. those are key but i know back lines have been used to present the case and allow that opportunity. >> we're going to take a short break. when we come back we'll talk more about the players themselves. after all they're the ones making tremendous fortunes on the basketball floor for the men a

>> reports of reportedly of an nba owner donald sterling. after you deplore them, what next? sterling gets to go on as a member of one of the world's most exclusive millionaire clubs. still with us, managing partner of sports and entertainment law.

paula madison, former owner of the los angeles sparks, a wnba team. and kenneth schropner from the wharton school of business. we haven't talked a lot about the players. they're not robots. they don't exist in a world that is shorn of all context. they play at a time and place for certain people and against others. has it been a surprise to you to see lebron james one of the best known stars of the game come out fort forthrightly again owner and saying he has to leave the game. >> from bad things come good things. and the positive statements in terms of understanding the issue by lebron james, michael jordan, who is a rare speaker on these issues, and think about the players themselves, the actual protests delivered in the game. the idea that they took the time from their preparation to determine how they would act as an unit.

it's a very important moment, and it's very clear that this is an impactful situation for them. and they've taken a lot of the right steps. >> in an he is say today online in a was scathing, but also quite funny, kareem abdul jabar noted of the players they're not playing for sterling. they're playing for themselves, the fans, for showing the world that neither basketball nor our american ideals are defined by a few pathetic men or women. players are pretty constrained, aren't they. they can't just refuse to take the court. they're contractually bound. >> that's right. the contracts --the nba buy laws to suspend and find players if they protest. however, there are statutes in place that say if a worker is

fined out of a sense in a discriminating environment, they cannot be penalized. it has put the league in a game to echo the previous presenters, it's put the league in the position how do you find a player whose own conscience does not speak on behalf of the situation. >> it's one of those optic moments where major number of the stars are black, and play with white owners. they're making big punish themselves, but it points to one of those moments where the optics of the american sport can be difficult, can't they? >> well, yes, it can be difficult. i'd like to say right here and

now that those comments from the person reported to be mr. sterling, i give them food, i give them houses, i give them cars. whethewhether or not we like the athletes salaries, these athletes are providing entertainment for most of america and making men like mr. sterling gazillions of dollars. i've referred to this in many ways, it's interesting to me, it feel very much plantation-like, and i'm going to use that. what was said on that tape to the young lady who was the former girlfriend, and about the players is that a particular person , mr. sterling, is sitting in a seat where he believes he is a puppet master.

that he's not giving these player give giving themanything, and tg their best performance. as a business truly as a business model. sports in america. the players earn what the market will bear. to have a team that was bought at $20 million, and valued at $300 million, it is just wise, and it is the best all around especially when sponsors are pulling away, it would be the best all around for mr. sterling to take his money and retire. and say the kinds of things he wants to say in the privacy of his own home. >> we have just about a minute left. kenneth, what is the best outcome?

you just heard paula madison talk about her desire for donald sterile to go. with we don't discuss these wider issues, will we have missed an opportunity? >> i think so. mr. sterile something a problem that will take care of itself at some point of time. the natural course that we all follow. let's not spend too much time on mr. sterling. let's do as i hope commissioner sterile something doing. let's look at the bigger issue, and let's make sure that we put in place plans to deal with this kind of issue in the future, so we can move rapidly and not be confronted with these kinds of conversations again and not allow the kind of comfort that the person on the tape had when he said the things that he said. >> that brings us to the end of this edition of "inside story." thanks for being with us. in washington, i'm ray suarez.

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