On April 25, 2014, TMZ Sports released a recording of a conversation between Sterling and his mistress, V. Stiviano (born María Vanessa Perez, also known as Monica Gallegos, Vanessa Perez, and Maria Valdez). In the recording from September 2013, a man confirmed to be Sterling was irritated over a photo Stiviano had posted on Instagram, in which she posed with Basketball Hall of Fame player Magic Johnson. Sterling told Stiviano, who herself was part African-American: "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".
Sterling's comments affected the NBA, a league with predominantly black players. On April 26, the team held a meeting to discuss the incident. Both coaches and players expressed anger toward the comments, and they briefly raised the possibility of boycotting Game 4 of their series against the Golden State Warriors on April 27 before deciding against it. Instead, players protested Sterling's remarks by wearing their shirts inside-out in order "to obscure any team logo" during their pre-game huddle. On April 28, players of the Miami Heat wore their uniform tops inside-out to show solidarity with the Clippers. LeBron James commented on the situation, "There's no room for Donald Sterling in the NBA". The owner of the Miami Heat, Micky Arison, also called the allegations "appalling, offensive and very sad". NBA's Kevin Johnson, Kareem Abdul-Jabbar, Magic Johnson, Charles Barkley, Shaquille O'Neal, Kobe Bryant, and Michael Jordan also condemned Sterling's remarks. The Los Angeles chapter of the National Association for the Advancement of Colored People (NAACP) cancelled its plans for the following month to award Sterling for a second time with its lifetime achievement award. President Barack Obama characterized the recording of Sterling as "incredibly offensive racist statements". Chumash Casino, the Clippers' most visible sponsor during the prior four seasons, ended its relationship with the team, as did sponsors CarMax, Virgin America, and others. On April 29, 2014, UCLA announced that it was rejecting a $3 million gift from Sterling.
Sterling disavowed having given his wife authorization to sell the team, denied all charges, and refused to sell the Clippers. He called the penalties "draconian" and referred to the process as a "sham". He then sued the NBA for $1 billion, alleging it had violated both antitrust laws and his constitutional rights. On June 4, 2014, attorney Maxwell Blecher announced that Sterling had decided to drop the lawsuit against the NBA, and had agreed to allow the proposed $2 billion sale of the Clippers to Ballmer. The sale would be approved pending a majority vote of league owners.
One of Sterling's critics among the team owners, Atlanta Hawks majority stockholder Bruce Levenson, also left the NBA in September 2014, as an indirect result of the incidents and lawsuits. Levenson reported a racially insensitive e-mail (sent two years prior) to the NBA, as the Sterling case made Levenson feel remorseful for behaving in a manner he described as similar.