Donald Sterling’s ‘plantation’: the corrupt economy of NBA franchises

Editor’s Note: Christopher Mackin is a long-time leader in the worker ownership movement. Paul Solman first caught up with him in 1987, when Mackin was advising a worker buyout of a shipyard in Quincy, Massachusetts. (Watch that report at the bottom of this post.) After updating us on the progress of “the alternative American dream” last summer, Mackin now weighs in on Donald Sterling’s ownership of the Los Angeles Clippers. NBA commissioner Adam Silver banned Sterling from the NBA for life Tuesday. The Sterling episode, Mackin hopes, will force the NBA, and the rest of corporate America, to reconsider their ownership structure. Mackin is an adviser to employee-owned corporations and serves as an adjunct lecturer at Rutgers University.

Simone Pathe, Making Sen$e Editor

Sometimes it takes a clown to reveal the workings of the circus. Donald Sterling stands out from his fellow NBA owners not because of his wealth, not because of the recent success of his basketball franchise, but because his words have given us access to the mind of an NBA franchise owner acting like a racist clown. In addition to inflaming racial passions however, Sterling is also serving as an unwitting guide to the internal workings of the circus itself.

A second metaphor has been applied to this drama to describe the Los Angeles Clippers workplace. In the words of former NBA superstar Kareem Abdul-Jabbar, speaking on MSNBC’s “Hardball,” Sterling’s operation functions as a “plantation.” Welcome to the world of sports franchise ownership.

There is no more offensive classification of a workplace than the term plantation, an organization comprised of masters and servants. The term has been earned in Sterling’s case in particular because of his racist language and behavior. However, if we set the racism aside and listen to Sterling more closely, there is even more to learn. Speaking on that tape recorded by his alleged paramour V. Stiviano, and sounding like a slightly confused professor, Sterling poses key questions that reveal the unresolved contradictions of corporate ownership, not just of the Los Angeles Clippers.

STERLING: Just — do I know? I support them and give them food and clothes and cars and houses! Who gives it to them? Does someone else give it to them? Do I know that I have — who makes the game? Do I make the game, or do they make the game?

To economists, Sterling is posing questions about the term appropriation. Who should own the fruits of labor? Suppliers of capital or suppliers of labor? Generally speaking, our intuitions as Americans favor the second alternative. Those who produce should receive the benefits of that production. Capital suppliers are simply supplying capital. Our legal institutions, however, generally come down somewhere else. Sterling pays the salaries of the players and the staff and the rent on the Staples Center. He therefore is the owner, the so- called “residual claimant.” Everyone else is simply an employee. Just like in the other 29 NBA franchises across the land. Just like in the American workplace.

Later, during the same April 28 edition of MSNBC’s “Hardball” where Abdul-Jabbar referred to this arrangement as “the plantation model,” host Chris Mathews weighed in on the peculiarities of the prevailing model with former NBA star (and former Mayor of Detroit) Dave Bing.

MATHEWS: You know, one of the weird things about the NBA is when you watch the championship game, usually the seventh game of the final series, the players stand back, and some little owner comes out and receives the award. I have always thought that was unlike any other sport, where the owner gets to get the Academy Award, when he’s not been in the field. Is that weird? Does that seem weird, those moments when the owner gets to be the star?

BING: I guess, because he’s signing the paychecks, he can kind of do what he wants to do.

The “weird” dynamic that Mathews objects to is not, of course, restricted to the NBA championship ceremonies. It is also “weird” to attribute to Warren Buffett’s Berkshire-Hathaway, the largest shareholder of Coca-Cola, the success of Coca-Cola or even to Mark Zuckerberg the success of Facebook. Others are involved. What strikes Mathews as “weird” is something a lot deeper than can be appreciated or solved by the next stage of the Los Angeles Clippers drama, a drama whose hidden-in-plain-sight structure — the structure of modern-day employment relationships — has surfaced for inspection because of Sterling’s actions.

Now that NBA Commissioner Adam Silver has banned Sterling from the NBA for life, it appears Sterling will soon be ushered off stage. That will not happen before he receives a market price, however, estimated at $700 million, for his efforts. (He paid $12.7 million for the franchise in 1981.)

Sterling’s racial attitudes are almost certainly the exception among other NBA ownership groups. But what is not an exception is that rich, largely white ownership groups function as the faces and the ultimate masters of NBA sports ownership. Replacing these faces with black ownership would certainly be an improvement, but it would not address a deeper problem. Whatever the racial identity of the “next” ownership group of the Los Angeles Clippers, whether it’s Magic Johnson or David Geffen, it is almost certain that the core plantation employment structure will continue its reign.

Perhaps it is time to stop and think about some alternatives. The opportunity costs are not as steep as one might think. Even out-of-the-box alternatives can earn millions in television revenue.

Two groups should be the leading candidates to own the Los Angeles Clippers in a post-Sterling era. The first would be some form of community non-profit ownership model made popular by the Green Bay Packers football team. The second would be a newly designed for-profit Participants Trust owned by past, present and future players of the Los Angeles Clippers, including the management and coaching personnel that any modern franchise needs to compete. Whatever additional capital these structures might need to function efficiently could easily be rented from well-meaning or strictly economic lenders.

The Green Bay model is a proven winner. Remember the Super Bowl of 2010? However, the Green Bay Packers’ structure is also distinguished by a little-understood fact. In 1960, then-Commissioner Pete Rozelle changed the constitution of the National Football League by adding Article V, Section 4. The so-called “Green Bay Rule” prohibits a repeat of the Green Bay model. So much for diversity within capitalism.

Sterling has caused unnecessary pain to the members of the Los Angeles Clippers basketball team. His mistakes would not be erased by conveying the Clippers to a new, more progressive and inclusive ownership structure. But if nothing else, perhaps Sterling’s misdeeds can provoke a conversation about getting beyond the plantation model of ownership in basketball — and in the economy at large.

In this 1987 MacNeil/Lehrer NewsHour report, Paul Solman reported on workers’ attempt to buyout the General Dynamics shipyard in Quincy, Massachusetts, and spoke with Chris Mackin, a leader in the worker ownership movement.