Sterling Trust Agrees To Sell Clippers For Record $2B If Approved By NBA
Clippers co-Owner Rochelle Sterling has "agreed to sell the team" to former Microsoft CEO Steve Ballmer for $2B after asserting that she "is acting as the sole trustee" of the family's trust, according to John Cherwa of the L.A. TIMES. Sterling announced the deal in a release that contained "no mention” of Donald Sterling. His attorneys have insisted that he "needs a final sign-off before the team can be sold." However, Rochelle Sterling has said that Donald was "not capable of making the decision to sell the team." Cherwa reports the negotiated sale now will “move to the NBA for approval." Ballmer "bid higher" than competitors that included L.A.-based investors Tony Ressler and Bruce Karsh and a group that included DreamWorks SKG co-Founder David Geffen and Guggenheim Partners execs. The Geffen group offered $1.6B and the Ressler-Karsh group offered $1.2B. The sale if approved would be the "second-highest price ever paid for a sports team in North America" after the Dodgers sold for $2.1B in '12 (LATIMES.com, 5/30). In California, Dan Woike notes Ballmer could be "approved more quickly than usual because he has already been vetted by the NBA" after an attempted purchase of the Kings last year (ORANGE COUNTY REGISTER, 5/30). ESPN.com's Shelburne & Rovell cite sources as saying that Rochelle Sterling became the team's sole trustee of the trust after Donald was "found by experts to be mentally incapacitated." The rules of the trust did "not require a court hearing first" to declare he was "incapacitated." That allowed Rochelle Sterling to "negotiate directly with Ballmer and the NBA to sell the team" (ESPN.com, 5/30).
NOT DONE YET: In L.A., Smith, Wang & Medina in a front-page piece report Max Blecher, Donald Sterling's attorney, on Thursday "indicated a pending legal battle" regarding the sale. Blecher in an e-mail wrote, "He is resisting and will resist any sale of the team forced by the NBA." Asked if Sterling would be amenable to voluntary sale if the league’s June 3 hearing to terminate his ownership is delayed, Blecher replied, “If that occurs -- which we doubt -- we’ll see where it leads" (L.A. DAILY NEWS, 5/30). SI.com's Michael McCann writes the NBA for the sale to officially be completed will "demand certainty" on a number of issues, including that both Donald and Rochelle Sterling are "truly leaving" the league. It also will demand certainty that Donald Sterling's "mental state does not pose legal problems," as well as "certainty in continuation" of his lifetime ban and payment of his $2.5M fine. Finally, it will require certainty that Ballmer "understands he cannot move the team to Seattle" (SI.com, 5/30).
STILL SLEEPLESS: In Seattle, Geoff Baker in a front-page piece writes the NBA would "almost certainly stipulate" that Ballmer must keep the team in L.A. and not move it to Seattle. Ballmer in a statement released Thursday "seemed to indicate he would keep the team" in its current home. Ballmer is the "biggest partner for hedge-fund manager Chris Hansen’s efforts to bring an NBA franchise to Seattle and build a new arena in the Sodo District." Landing the Clippers would "end Ballmer’s involvement with Hansen’s plan and raise the question of who steps in to fill the void" (SEATTLE TIMES, 5/30). Also in Seattle, Larry Stone writes the idea of the NBA returning to the city "seems, once again, more pipe dream than pending reality." It is "hard not to conclude that Ballmer surveyed the NBA landscape and didn’t much like the prospects for Seattle." Stone: "As long and hard as he’s pushed to acquire a team to fill our NBA void ... you’ve got to think that any positive whispers from new NBA commissioner Adam Silver would have kept him in the fight" (SEATTLE TIMES, 5/30).
DEAL DETAILS: Should the NBA approve Ballmer’s bid for the Clippers, he will be buying a team that in the FY '13 generated about $150M in total revenue, according to a source. The $150M in total revenue last year was up from about $113M in FY '12. The Clippers rank in the top 10 of the league’s 30 teams in total revenue. There is no debt on the franchise and the team last year paid about $5M into the NBA’s revamped revenue-sharing system, up from about $3.3M a year earlier. The Clippers' total revenue figures to climb even higher when their current local TV deal ends after the '15-16 season. A new local TV deal is expected to more than double from the current estimated $25-30M average the team gets from Prime Ticket (John Lombardo, Staff Writer).
NOT WORTH THE PRICE: USA TODAY's Nancy Armour writes under the header, "$2B Is Too Much For Clippers." Armour: "No team is worth $2 billion, and most certainly not the Clippers." The Bucks sold for a then-record $550M in March, and the Clippers were "going to be more attractive, and therefore costlier, than the small-market Bucks" due simply to their home market. However, the Clippers have not only "never won a title, they've never even made it to the NBA Finals." The Clippers also are "only tenants in the Staples Center," which means they "don't get any non-basketball revenue" (USA TODAY, 5/30). In N.Y., Cacciola & Sandomir note in addition to a "suddenly ascendant team with a miserable past," Ballmer in buying the Clippers would have a "training center and a lease at Staples Center that excludes luxury-suite revenue." The team under new ownership would "benefit from the boons expected in their next local cable contract and the NBA's next round of national deals" (N.Y. TIMES, 5/30).
GOING TO A WHOLE NEW LEVEL: In L.A., Vincent Bonsignore writes everything ended up "working out" regarding the Sterling episode. The city "no longer has to deal with the ugly embarrassment of Donald Sterling," and the Clippers "wind up with one of the richest men and brightest business minds in the world as their new owner." The value of NBA teams also just "orbited into a new galaxy" (L.A. DAILY NEWS, 5/30). Also in L.A., Bill Plaschke writes, "Leave your jaw on the floor. It's all true. The Clippers. Two billion bucks. No NBA championships. Two billion bucks. No appearances in the conference finals. Two billion bucks. ... Ballmer does realize that he paid the highest price for an NBA franchise that isn't even the most liked team in its own gym, right?" Plaschke: "What sports TV network will pay Ballmer the kind of money he might need to recoup his investment?" (L.A. TIMES, 5/30). Meanwhile, iIn N.Y., Mike Lupica writes Yankees Managing General Partner Hal Steinbrenner "has to look at the crazy money being thrown around for sports teams" in L.A. and "wonder what the Yankees, the granddaddy sports franchise of them all, might really be worth if -- or when -- the Steinbrenner family puts it up for sale one of these days" (N.Y. DAILY NEWS, 5/30).