Chương 52: Chapter 51: The Buyout (05/01/1984)

DATE: Tuesday, May 1, 1984 LOCATION: Beverly Hills, California LOCAL TIME: 02: 00 PM PST Donald Sterling sat behind a massive, polished mahogany desk in his Beverly Hills real estate office. His hair was heavily slicked back, and he leaned into his leather chair with the relaxed posture of a man who bought properties with maximum leverage and ran them with minimum overhead. In the subterranean bunker in La Jolla, I adjusted my headset and listened to the wire transmission.

Sterling had purchased the San Diego Clippers three years ago for twelve and a half million dollars. I knew the historical data. In exactly two weeks, he was going to unilaterally pack the franchise into moving trucks and illegally move them to Los Angeles, infuriating the newly minted NBA Commissioner, David Stern. I wasn't going to let that happen. John E. Patterson sat across from Sterling. He hadn't offered a handshake. Instead, he dropped a four-inch-thick binder onto the desk.

The thud echoed through the audio feed.

"What is this?" Sterling asked, his voice dripping with casual condescension.

"I told your secretary I'm not selling the team, Mr. Patterson. I'm moving them to the Sports Arena in LA."

"You aren't moving anything, Donald," Patterson said, his baritone perfectly flat.

"That binder contains meticulously documented evidence of systemic housing discrimination across your Beverly Hills apartment portfolio. Refusing to rent to minorities. Refusing to rent to families with children. Illegal evictions. Archstone Capital has spent the last three months interviewing your tenants." Sterling scoffed loudly, waving a hand dismissively.

"Are you threatening me with the press? A civil rights lawsuit? Get in line. I have an army of lawyers who will tie the DOJ up in court for a decade. You think a binder scares me?"

"You misunderstand our strategy," Patterson corrected him smoothly. He pulled a second, much thinner folder from his briefcase and slid it across the desk.

"We don't care about your public reputation. We care about your liquidity." Sterling opened the folder. Inside were copies of court filings, complete with assigned case numbers and judicial stamps.

"Tomorrow morning, we aren't going to the press," Patterson said.

"We are filing four hundred simultaneous civil injunctions across your entire portfolio on behalf of those tenants. We are petitioning the courts to freeze your ability to evict, lease, or collect rent on those properties until the discrimination suits are resolved." Ensure your favorite authors get the support they deserve. Read this novel on Royal Road. Sterling's sneer faltered.

"My lawyers will get those injunctions thrown out."

"Eventually, yes," Patterson agreed.

"But you built this empire on heavy commercial leverage. You need constant, monthly cash flow to service your debt. The banks don't wait for a verdict. The moment those injunctions hit the public docket, it triggers the material adverse change covenants in your loans. They will freeze your credit lines immediately." Patterson leaned forward, resting his hands on the desk.

"If we tie your properties up in court for even three months, you will default. The banks will foreclose on your entire empire. We won't put you in the newspapers, Donald. We will simply bankrupt you." The silence on the wire was heavy.

"This is extortion," Sterling said, the arrogance completely gone, his voice tight with sudden, suffocating panic.

"This is a buyout," Patterson replied.

"And we aren't your only problem. I spent yesterday in New York with Commissioner David Stern. He knows you are packing moving trucks. He is prepared to fine you twenty-five million dollars the second those trucks hit the Interstate, and he will tie up your franchise rights indefinitely." Patterson slid a single sheet of paper across the desk, resting it on top of the thick binder.

"My employer is offering you twenty-five million dollars today," Patterson delivered the final strike.

"You double your 1981 investment. You sign the team over to Archstone, the Clippers stay in the San Diego Sports Arena, the NBA drops the impending relocation fines, and this binder goes into an incinerator. Take the profit, Donald. Because if you try to move that basketball team, Archstone will burn your real estate cash flow to the ground." Through my earpiece, I heard the heavy, scratching sound of a Montblanc pen moving across paper. The Clippers were anchored. One down.

I pulled the headset off and turned my attention back to the monitors. Orchestrating hostile takeovers was purely mechanical; biological monopolies required a different kind of precision. Evelyn Vance was already waiting by the bunker's glass conference table. I handed her three manila folders.

"I don't just want the basketball team," I told her.

"I want a monopoly on the 1987 Triple Crown. And I want the syndication rights that come with it." Evelyn opened the folders, scanning the contents.

"Alysheba. Bet Twice. Cryptoclearance. These were foaled just weeks ago."

"By the time they hit the Keeneland sales ring next year, they will be visibly exceptional, and bidding wars will erupt," I said.

"We are going to buy them privately, as weanlings, directly from the breeders right now. We will fully fund the acquisition, but we will run them under Gene Klein's Del Rayo silks. Klein gets to be the public face. He gets to stand in the winner's circle at Churchill Downs. Archstone retains eighty-five percent of the lifetime syndication and stud fees." Evelyn nodded, closing the folders, and headed for the door to book a flight to Kentucky. I watched her leave.

I didn't tell her that I knew Gene Klein's heart was going to give out on March 20, 1990. I was using him to launder a biological monopoly that would siphon tens of millions in stud fees into Archstone over the next twenty years. But I was also handing a dying man the 1987 Triple Crown on a silver platter. Let the old man have the roses before the clock stopped.