The NBA is a private association with it's own governing charter. It's a billionaires club. If all of the other members of the club hate you because you have a LONG HISTORY of being a total racist, cheapskate, and litigious dick, it is within their right to throw you out. Additionally, his wife had him declared incompetent, so legality is even less of an issue.
As for the "baiting", even if we ignore his long history of bad behavior, he insulted Magic Johnson - one of the greatest players of all time, and the guy who's statue he walks by every time he enters the Staples Center - IN HIS APOLOGY. Yes, he said he was a bad influence him for HAVING HIV. Yes he said he could be "doing more" for the community - the guy who opened hundreds of new businesses in black neighborhoods across LA. Oh, and that apology took him a week, and in the meantime, he said he should have just "paid her off".
Also, BOTH teams (including his own) were going to refuse to play (in the playoffs) if the commissioner didn't act. NO ONE liked him, not even those who worked for him.
If you want to talk about freedom, how about the freedom to not have to deal with this jerk? I believe they always had the legal authority to kick him out, but his history of litigious dickishness would have cost them billions in legal fees and bad PR. Carpe Diem. And Ballmer (not famous for his likability) will be a HUGE upgrade.