The Buss Family’s Complicated Power Struggle Over The Lakers

0:54 | NBA
Jeanie Buss foils brothers' attempt to seize control of Lakers
Saturday March 4th, 2017

Two years ago, a family battle over controlling ownership of the Los Angeles Clippers was resolved in probate court. That same fate now appears likely for the Clippers crosstown rival, the Los Angeles Lakers.

On Friday, attorney Adam Streisand filed a petition in Los Angeles Superior Court for a temporary restraining order and preliminary injunction on behalf of his client, Lakers controlling owner Jeanie Buss, to thwart an alleged attempt by Jeanie Buss’s brothers, Johnny Buss and Jim Buss, to remove her from the Lakers’ five-member ownership board. The petition for a temporary restraining order was withdrawn later on Friday after the brothers cancelled a shareholders’ meeting that was set to occur on Tuesday, Mar. 7 and expressed in writing their intent to reelect their sister as controlling owner. While the controversy has been averted for now, a probate court hearing scheduled for Mar. 11 will address the merits of the legal dispute between the siblings.

If the Mar. 7 meeting had occurred, the composition of the Lakers’ five-person board of directors would have been set to change. The Lakers’ bylaws make clear that only a board director can serve as the team’s controlling owner. Jeanie Buss’ name, however, was “conspicuously excluded” from the list of four directors proposed by her brothers, who listed themselves on the candidate slate. As a result, Jeanie Buss would presumably have become ineligible to continue serving as the Lakers’ controlling owner following the directors’ Mar. 3 meeting.

Although the Mar. 3 meeting has been cancelled, it’s unclear if a similar board meeting could be called in the near future and whether Streisand would need to return to court to stop it.

NBA
Report: Jeanie Buss foils brothers' attempt to seize control of Lakers

The legal and basketball significance of Jeanie Buss serving as Lakers’ controlling owner

Jeanie Buss’s role as controlling owner is legally meaningful in several ways. First, it matters a great deal to the NBA. As the Lakers’ controlling owner, Jeanie is one of only 30 controlling owners in the NBA (one for each team) and serves on the NBA’s board of governors. The NBA considers her the final authority on all Lakers matters. Consequently, Jeanie Buss casts votes on behalf of the Lakers at NBA owners’ meetings.

Jeanie Buss’s authority in regards to internal Lakers’ decisions is also superior to that of anyone else. Each NBA team’s controlling owner has final say on transactions involving his or her team. In contrast, “non-controlling” owners of NBA teams usually enjoy only ceremonial perks and the heightened social status of being an NBA owner. The extent of a non-controlling owner’s actual influence on his or her team is usually up to the wishes of the controlling owner. The Buss brothers are non-controlling Lakers owners.

If Jeanie Buss becomes ineligible to serve as Lakers’ controlling owner, one of the Lakers five directors—perhaps one of her brothers—would become Lakers’ controlling owner. The new controlling owner could nullify important decisions made by Jeanie Buss related to basketball operations and business management.

In February, Jeanie Buss effectively fired both her brother Jim Buss as executive vice president of basketball operations and Mitch Kupchak as general manager. She replaced them with Magic Johnson and Rob Pelinka, who were named president of basketball operations and general manager, respectively. A new controlling owner would decide whether to retain Johnson and Pelinka. An ouster of Johnson, one of the most influential persons in Lakers’ history, would likely spur criticism by both fans and media, particularly if Johnson is replaced after only a short time on the job.

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That said, a new controlling owner could do what he or she wishes. Even if a new controlling owner didn’t fire Johnson and Pelinka, the controlling owner might hire additional basketball executives—such as Kupchak—to the front office. Some of Johnson and Pelinka’s existing authority could be transferred to those new executives. Such a move might lead to a potentially awkward power struggle for control of Lakers’ basketball decisions.

The NBA appears to prefer continuity with the Lakers. A statement released by NBA spokesman Mike Bass to the Los Angeles Times on Friday praised Jeanie Buss “as a terrific leader for the Lakers organization” and “an incredibly influential voice among all our team owners.” The statement suggests the NBA wants to avoid a crisis over Lakers ownership and maintain the existing framework with Jeanie Buss calling the shots.

Jeanie Buss serving as controlling owner also appears consistent with the wishes of her late father, Dr. Jerry Buss, who passed away on Feb. 13, 2013. Dr. Buss owned the Lakers through a family trust, of which he served as the trustor until his death. According to Streisand, the trust commands that the trust (effectively the Buss family) retain control of the Lakers until the trust is terminated. The wording of the trust, as excerpted by Streisand, also highlights the wish of Dr. Buss for his daughter to remain in control of the team: “the Trustees shall take whatever actions are reasonably available to them to have JEANIE M. BUSS appointed as the new Controlling Owner of The Los Angeles Lakers, Inc.”

Further, the trust, as portrayed by Streisand, dictates that Jeanie Buss must be appointed controlling owner unless she is no longer living or unless she wasn’t appointed controlling owner following Dr. Buss’ death. The 55-year-old Jeanie is alive and well and she was the controlling owner following her father’s death.

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Going forward as a May court date looms

While Jeanie Buss and her attorney, Adam Streisand, have effectively defeated an alleged attempt by Johnny Buss and Jim Buss to seize control of the franchise, they would prefer that a court enjoin the Buss brothers from trying this again. On May 11, a probate hearing is expected to occur. At the conclusion of the hearing, a judge could issue an injunction that reaffirms Jeanie Buss’ control of the team as consistent with the Buss family trust’s directives.

The May 11 hearing is thus crucial for Jeanie Buss to prevent any future efforts by her brothers to remove her as controlling owner. The hearing might also address any potential attempts by the brothers to dissolve the Buss family trust, a move that would jeopardize their sister’s control of the team. At the hearing, Streisand will undoubtedly argue that the trust is clear in directing that Jeanie Buss remain controlling owner. He will also attempt to repel any attempt to dissolve the trust.

To bolster his legal arguments, Streisand will assert that Jeanie Buss’s ouster would cause irreparable injury to not only her—she would lose control of an NBA team and perhaps never again be in a position to regain that control—but also to the Lakers’ team and brand. As explained above, a new controlling owner could wreak havoc in the Lakers’ front office.

Of course, what some view as havoc to the Lakers’ front office, others might see as hope. Johnson and Pelinka haven’t been on the job long enough to prove that they are capable of turning around the fortunes of the Lakers, which have missed the playoffs the last three seasons and are a dismal 19-42 this season. Plus, the sum of Johnson/Pelinka’s decision-making two months from now will still represent a fairly small sample size. It is at least theoretically possible that different leaders in the Lakers front office might be better equipped than Johnson and Pelinka to lead the team. Then again, Jim Buss held an influential role over basketball decision-making from 2005 to 2017 and the team struggled recently under his watch.

For now, Jeanie Buss will remain in control of the Lakers. But with a May court hearing looming and with control of the Lakers contingent upon how a family trust is read and whether a family trust is preserved, it could be a bumpy road ahead for the franchise.

Michael McCann, SI's legal analyst, provides legal and business analysis for The Crossover. He is also an attorney and a tenured law professor at the University of New Hampshire School of Law.

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