...Final Paper on Donald Sterling Ethics MGT511X 6/8/14 Caitlin Filteau Case Background Donald Sterling came into the ethical spotlight in April 2014, with a voice recording of him talking to his then mistress, “It bothers me a lot that you want to broadcast that you’re associating with black people. Do you have to?” “You can sleep with [black people]. You can bring them in, you can do whatever you want. The little I ask you is not to promote it on that … and not to bring them to my games.”Don’t put him [Johnson] on an Instagram for the world to have to see so they have to call me. And don’t bring him to my games.”(nba.com) Since then Mr. Sterling has been banned from the league for life and he was fined $2.5 million dollars. He has no authority over the Clippers and can’t attend any NBA game. NBA commissioner Adam Silver also stated that he would move to force Sterling to sell the Clippers. He stated he would do this based on “willful violation of the rules”, and it would require the consent of three-quarters of the other NBA owners. (Wikipedia.org) On May 26th Sterling made a statement denying all of the charges against him and he refused to sell the Clippers. Donald Sterling’s wife, Shelly, reached a deal to sell the Clippers to Steve Ballmer for $2 Billion dollars on May 29th. Shelly Sterling agreed not to sue the NBA and to assure the league against other suits possibly brought on by her husband. The next day her husband sued the NBA for $1 billion dollars stating...
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...As the owner of of Los Angeles Clippers, Donald Sterling has had allegations of racism from the past and at this percent time. Recently, the media had audio of Sterling expressing terrible things about black people. However, at this point it was brought to the media attention that Donald Sterling has a history of being disrespectful to African Americans. “A top team executive accused Sterling of running the Clippers the Clippers with a “plantation” mentality.” (Shoichet) In 2009, Sterling was accused of wrongful termination by Elgin Baylor. The lawsuit also accused Sterling of “ageism in which he harassed him by making demeaning comments about his age.” (Shoichet) Eventually, in 2011 the racial discrimination claim was dropped and as far as the ageism claim the jury sided with Sterling. In 2006, the Department of Justice brought housing discrimination charges against Sterling’s rental company in Los Angeles alleging that refused to lease to African Americans, Latinos, non-koreans in the Koreatown section in Los Angeles, and families with children. The case was eventually settled in 2009 for $2.725 million because the cost of litigation started exceeding the cost of the settlement. I believe the worst claim of them all was in 2004, when he denied surgery for the assistant coach Kim Hughes. Hughes had found out he was diagnosed with “prostate cancer on the eve of training camp”(Witz) and the surgery wasn’t covered under his health insurance and would cost $70,000. Fortunately...
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...use of W. Jingcheng, 2015. 9-913-556 APRIL 30, 2013 WILLIAM E. FRUHAN CRAIG STEPHENSON Sterling Household Products Company January of 2013 brought a new year and an important new opportunity to the management team of Sterling Household Products Company. Sterling manufactured and marketed a wide line of consumer goods, including laundry products, soaps, cosmetics, toilet preparations, and cleaning, disinfecting and sanitizing products, which were sold domestically and internationally, and were used every day in millions of households around the world. Sterling’s family of quality products included many highly regarded brand names, and the company had consistently delivered impressive sales and profits to the investment community. Sterling’s financial measures for all recent years showed that the company was successful, but a time series analysis of these same financial measures quickly isolated Sterling’s current challenge: growth rates for unit volume, sales, and profits were very low, and company management was looking to expand into businesses and products with more potential for growth. Sterling had identified health care as an industry with more growth potential, and a detailed search for health care products which could fit well into the company’s existing operations led to discussions between Sterling and Montagne Medical Instruments Company. Sterling was interested in acquiring Montagne Medical’s germicidal, sanitation, and antiseptic products unit...
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...Strengths: EasyJet is a leading provider of low budget, no frills air travel servicing many of the leading city destinations in the UK and across Europe, including Berlin, Amsterdam, Barcelona, and Prague. They offer a high quality service at competitive prices and offer a number of features including ticketless travel, internet booking and assisted travel services. They have a highly distinctive livery on their fleet of aircraft making them easily recognisable and distinguishing them from their competitors. They have a user friendly website which fully discloses the price breakdown of the passengers planned travel. Offering a full breakdown of the price plan prevents any hidden charges when the customer confirms there booking. EasyJet offers an online promotion alert which is e-mailed to existing customers and contact on the company’s database. Recognised as a leading brand name in the UK travel industry. As a market leader in an industry widely seen as a leading contributor to the green house effect and global warming, EasyJet actively embrace there environmental responsibilities and continue to keep these factors as a keep priority when developing their future strategies. EasyJet operate a fast and efficient service with an average turnaround time of 30 minutes or below. This enables them to maintain a reliable and hassle free service to their passengers. Weaknesses: Domestic air travel is an extremely competitive industry with EasyJet’s main competitors being...
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...Sterling Household Products Company Case Note Adapted from Harvard Business School Sterling Household Products Company (Sterling) is a comprehensive investment analysis case that requires students to consider a broad range of quantitative and qualitative issues in evaluating a significant strategic acquisition. Suggested Questions and Analyses: 1) Determine the risk associated with the proposed acquisition of the germicidal, sanitation, and antiseptic products unit of Montagne Medical Instruments Company (Montagne). Discuss the inputs and assumptions that underlie your calculations. a) What is the cost of equity capital appropriate for evaluating the free cash flows associated with this investment? b) What is the correct capital structure and weighted average cost of capital to use in discounting the investment’s free cash flows? 2) Determine the value of the base case acquisition opportunity. Discuss the inputs and assumptions that underlie your calculations. b) What are the amounts and timing of the investment’s free cash flows from 2013 through 2022? b) What is the terminal value of the final 10 years of the acquisition, as of 2022? c) What is the net present value of this base investment? 3) Determine the value of the follow-up expansion investment opportunity. Discuss the inputs and assumptions that underlie your calculations. c) What are the amounts and timing of the expansion investment’s free cash flows from 2013...
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...opportunity to the management team of Sterling Household Products Company. Sterling manufactured and marketed a wide line of consumer goods, including laundry products, soaps, cosmetics, toilet preparations, and cleaning, disinfecting and sanitizing products, which were sold domestically and internationally, and were used every day in millions of households around the world. Sterling’s family of quality products included many highly regarded brand names, and the company had consistently delivered impressive sales and profits to the investment community. Sterling’s financial measures for all recent years showed that the company was successful, but a time series analysis of these same financial measures quickly isolated Sterling’s current challenge: growth rates for unit volume, sales, and profits were very low, and company management was looking to expand into businesses and products with more potential for growth. Sterling had identified health care as an industry with more growth potential, and a detailed search for health care products which could fit well into the company’s existing operations led to discussions between Sterling and Montagne Medical Instruments Company. Sterling was interested in acquiring Montagne Medical’s germicidal, sanitation, and antiseptic products unit, and Montagne Medical was willing to sell the unit for the right price. Negotiations had revealed that Montagne Medical believed the right price was $265 million, so Sterling had to determine if acquiring the...
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...Sterling Household Products Company Acquisition of the Germicidal, Sanitation and Anitseptic Unit of Montagne Medical Instruments Company Executive Summary Sterling Household Products Company manufactured and marketed a wide variety of consumer goods products which were sold domestically as well internationally. Despite having great products and being positioned well in the industry, Sterling’s growth prospects were limited. Sterling’s decision to acquire the germicidal, sanitation and antiseptic production unit of Montagne Medical Instruments Company could provide the much needed growth. Furthermore, the division was well aligned with Sterling’s existing operations, helping Sterling diversify its business without compromising on its core competency. Assuming the growth rate of 3% for terminal value calculation, aligned with the GDP growth of US, the net present value (NPV) of the investment comes to $99.7 million. We also analyzed the NPV of acquisition under two scenarios - 0% growth and terminal value calculated using multiples of 9. As the acquisition provides immense opportunities for Sterling to further expand its production capacity, we calculate the NPV of $167 million. We firmly believe that Sterling should acquire Montagne Medical’s unit as it presents positive synergistic effect on Sterling’s cash flows. Business Risk The unlevered asset beta represents the pure business risk of the company. It does not take into consideration the effect of debt leverage...
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...Los Angeles Clippers owner Donald Sterling and the National Basketball Association (NBA). Mr. Sterling filed a civil suit against the NBA and the commissioner for breach of fiduciary duty claims after the commissioner banned him from the NBA and fined him $2.5 million dollars (Unger, 2014). Mr. Sterling is seeking damages of more than $1 billion. The author is writing the article to discuss in detail, the complaints brought forth by Mr. Sterling. Did the NBA and Mr. Silver in fact owe Mr. Sterling the fiduciary duties listed on the complaint because of a breach of contract (Unger, 2014)? Thesis of the article The thesis of the above article is that Mr. Sterling must prove there was an existence of a fiduciary relationship with the defendant, misconduct, and damages that were caused by the NBA fiduciary’s breach (Unger, 2013). Key Points/facts The key point evident in the article is the private conversation between Mr. Sterling and his then girlfriend Vivian Stiviano. Vivian Stiviano recorded the conversation between her and Mr. Sterling without his knowledge. Mr. Sterling argues the recording of the conversation was illegal due to California Invasion of privacy act. His argument is that Stiviano had no right to record his conversation without his knowledge. During the conversation, Mr. Sterling made racial remarks about African Americans. After the conversation was leaked by the media, the NBA conducted an investigation into Donald Sterling. The result of the...
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...an investor, philanthropist, chairman of Soros Fund Management and Open Society Institute. What inspire me most about him are his remarkable history when he did an excellent job on currency speculation in 1992, and also his own way of thinking. According to one of The Telegraph articles, Britain had its fell on European Exchange Rate Mechanism in 1992, and George Soros thought the pound sterling should have been devalued since it had been struggling with the ERM too high at a rate. At that time, he also knew that the Bundesbank would agree to devaluate both pound sterling and the Italian lira since the terrible impact that British high interest rates had on asset prices. George Soros then thought of the way that he could get a profit from the devaluation situation. He borrowed pound sterling in a massive amount, approximately £6.5 billion according to the report. Next, he converted them into a combination of Deutschmarks and French francs. Then on 16 September 1992 or also known as Black Wednesday, his bet paid off. The British Conservative government was forced to withdraw the pound sterling from the European Exchange Rate Mechanism because it surpassed its lower limit. George Soros made over US $1 billion profit by paying back his original borrowings. This is a compelling case for me because even though shorting stocks is common out there, he did his betting incredibly well. I personally...
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...Donald Sterling’s fall from the NBA Controversy has surrounded Donald Sterling for much of 2014. Donald was the owner of the Los Angeles Clippers for thirty three seasons until April 2014. He was banned for life after a recording of a conversation between himself and a female friend was released to the public. In the recording Sterling was irritated over a photo his female friend posted on Instagram, where she was with Basketball Hall of Fame player Magic Johnson. Sterling said to her: "It bothers me a lot that you want to broadcast that you're associating with black people, and you can sleep with black people. You can bring them in, you can do whatever you want. But the little I ask you is not to bring them to my games.” Donald Sterling’s comments impacted the National Basketball Association greatly. The comments caused an uproar in players across the league, upset affiliates of the Clippers and himself, and caused the commissioner to get involved. One of the first effects of Sterling's racial remarks was that players in the NBA were extremely upset by the comments made. These comments at the very least were inappropriate, especially in a league where 75% of the athletes are African American (Matthew Continetti, Polishing the silver, tarnishing the Sterling). On April 26, the day after his comments were released, the L.A. Clippers held a team meeting to discuss the incident. Both coaches and players were angered by the comments. They considered boycotting game four of their...
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...Los Angeles Clippers Donald Sterling made some racial comments that were recorded by an associate. These comments caught the National Basketball association by surprise and his ownership with the team could be in jeopardy. The day to day business operations have be handed over to the chief operating officer of the team. Donald Sterling was banned from the NBA for life and fined $2.5 million by Commissioner Adam Silver April 29 because of the comments made by the 81-year-old owner. The lifetime ban is the first handed down by the NBA for an infraction not related to drug abuse or gambling and prohibits Sterling, who has owned the Clippers since 1981, from playing any part in the running of the team or even accessing its facilities. In announcing the ban, Silver said that he would press NBA owners to force Sterling to sell the team, which can be accomplished by a vote of the other owners. The NBA expects Mr. Sterling to fight to keep his ownership of the team through legal action. In a statement regarding the lifetime ban Mr. Sterling said “I'm a good member who made a mistake," Sterling said. "Am I entitled to one mistake, am I after 35 years? I mean, I love my league, I love my partners. Am I entitled to one mistake? It's a terrible mistake, and I'll never do it again." This statement was made a week or so after the ban by sterling and he said he waited because he was “emotionally distraught.” In light of all this legal action Donna Sterling the wife of Donald would like...
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...Statistics (UK) Table 2 – Industrial Production in UK: Percentage change year-over-year Source: www.tradingeconomics.com During the prosper economic period of the 1980’s there was strong private investment on household, meaning that the mortgage credit rose significantly. In the beginning of the 1990’s the level of private debt was unbearable (Graph 1). Graph 1 - Debt to income ratio Source: Bank of England High rates of unemployment, high private debt and lack of macroeconomic surveillance tools have been pointed out as the main reasons for the economic recession of the early 1990’s. A sharper control over macroeconomic policies as well as an effective control of inflation and the defense of competitiveness of the sterling within Europe was some of the goals the British government aimed at by joining the ERM. A central exchange rate for each participating currency was established against the ECU, the artificial unit of account that set the pillars for the Euro currency. In practice, the participating currencies where actually pegged to the German mark, which was the most stable currency of the group. Still, there was no existing European central bank. So each national central bank was responsible for the control and maintenance of economic stability. Among other aspects of the arrangement, a lending mechanism was established, in which strong currency banks would help the weakest countries. Because of its credibility and success in...
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...Carrefour S.A. In the summer of 2002,with total sales of (euro) EUR53.9 billion from more than 5,200 stores, Carrefour S.A. was Europe’s largest retailer. Over the past four years, Carrefour’s growth had occurred almost entirely outside France and included several large acquisitions. In the past, Carrefour management had generally financed company growth through securities denominated in the currency of business operations. Its investment banks, Morgan Stanley and UBS-Warburg, however, had recently suggested that Carrefour consider borrowing in British pounds sterling in order to take advantage of a borrowing opportunity in that currency.With a debt-financing requirement of EUR750 million, the bond issue would be one of Carrefour’s largest. Now, in August 2002, the investment bankers expected that the 10-years Carrefour bonds would be priced at a coupon rate of 5 ¼ in euros , 5 3/8 in British pounds, 3 5/8 in Swiss francs, or 5 ½ in U.S. dollars. Carrefour In 1963, Carrefour altered the world of retailing with the introduction of the “hyper-market” concept in the small French town of Sainte-Genevieve-des-Bois, southeast of Paris. This format combined a supermarket , drugstore, discount store ,and gas station into one massive, one-stop-shopping megastore. The original store had 2,500 square meters of retail space, 12 checkouts, and 400 parking spaces. The company expanded rapidly in France and beyond, opening its first store outside France (Belgium) in 1969, and outside...
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...Jeffrey Sterling was hired by the US Central Intelligence Agency(CIA) as a “case officer” and worked for them for about 10 years until he was fired because he wasn’t meeting performance targets. During the exit interviews, he refused to sign the paper, stating that he would not disclose state secrets. Before this dismissal, Sterling submitted drafts of his memoirs to the CIAs Publication Review Board for editing. When sterling saw that his memoir was heavily censored he said that he will be “coming at [them] … with everything at his disposal” (US v. Sterling, 724 F.3d 482 (2013)) A short time after this Sterling had a few conversations with journalist James Risen who wrote an article about Sterling for the New York Times but it wasn’t published due to state security reasons. After this article, Risen published a book that described Sterling’s work and was based on his interview with the journalist. After the publication of the book Sterling was indicted by a grand jury for the “unauthorized retention and disclosure of national defense information” (case) The government issued a subpoena for Risen, who filed the filed the motion for a protective order under reporter’s privileges law. The motion was partially granted, holding that while Risen can be forced to testify, the elected testimony could only be about the...
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...Running head: International Financial Markets International Financial Markets Unit 1 Individual Project Michelle McCollough June 8, 2007 American InterContinental University Abstract The below paper will discuss starting an operation in a foreign country. I will compare and contrast the United Kingdom and Hong Kong. I will also explain which country would be best to begin a business in. International Financial Markets Introduction Acme is planning on having a greenfield production facility overseas. The two foreign countries that I have decided to compare for starting business in is the United Kingdom, which is part of the European Union and Hong Kong. Hong Kong is not part of the European Union. I will first analyze the UK and then Hong Kong. Analysis of the United Kingdom (UK): The United Kingdom of Great Britain and Northern Irelane is a state that consists of the nations of England, Scotland, Wales, and Northern Ireland. This is also under the UK sovereignty and is not apart of the UK itself, however are the “Crown dependencies of the Channel Island and the Isle of Man.” The said dependencies seek their own policies over taxes, employment, education, and health. They are subjected to UK control on matters such as defense (Doing Business in the UK, 2005). The UK has an island of 242,500km2. The UK’s population in 2002 was 59.2 million and in 2006 the population was 60.6 million. The languages...
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