Shelly Sterling accepts offer of $2 billion from Steve Ballmer to buy Clippers
If approved, sale will be by far the richest transaction in NBA history
SANTA ANA, Calif. — Shelly Sterling accepted a $2 billion bid from former Microsoft CEO Steve Ballmer, with the two entering into a signed, binding agreement for the sale of the Clippers, according to a person familiar with the negotiations.
If approved, it’ll be by far the richest sale in NBA history, and the second-highest price for a sports franchise ever behind the Dodgers, who were sold to the Guggenheim Partners for $2.15billion two years ago.
Ballmer, who lives in Seattle, told The Wall Street Journal two weeks ago he had no desire to move the Clippers.
“If I get interested in the Clippers, it would be for Los Angeles,” he said in a May 15 interview. “I don’t work anymore, so I have more geographic flexibility than I did a year, year-and-a half ago. Moving them anywhere else would be value destructive.”
Shelly Sterling became the sole controller of the Sterling Family Trust after Donald Sterling was found to be mentally incapacitated by experts, according to an ESPN report. Donald Sterling had been showing signs of dementia, according to his wife and team employees.
With Shelly Sterling in control, she was able to deal with Ballmer. The NBA will now review the agreement, with a three-fourths vote of the other 29 owners required for the deal to be approved.
Ballmer could be approved more quickly than usual because he has already been vetted by the NBA after an attempted purchase of the Sacramento Kings.
Ballmer, along with hedge fund manager Chris Hansen, tried to purchase the Kings for $525 million, with the purpose of relocating the franchise to Seattle.
The NBA voted down the relocation, and the Kings were eventually sold to Vivek Ranadive, who kept the team in Sacramento.
Ballmer’s $2 billion bid for the Clippers trumped a $1.6 billion bid from a group led by David Geffen and a $1.2 billion bid from a group featuring former Clipper Grant Hill.
Thursday’s deal comes at the end of a frantic bidding period, with a June 3 hearing looming over the Sterlings.
The NBA’s Board of Governors was set to meet to hear and vote on Donald Sterling’s termination from the NBA after an audio recording of the owner making racially charged comments went public. All ownership interests in the team would have been dissolved with a three-fourths majority vote.
The deal is for 100 percent control of the Clippers, something the league required in a Sterling-controlled sale. It’s unknown whether the Clippers’ practice facility in Playa Vista was included in the deal.
A Clippers spokesperson declined to make an official comment. The NBA also hasn’t issued an official comment.
Since the audio recording made by Sterling’s companion, V. Stiviano, was released, the Clippers were thrown into a state of chaos.
The team considered boycotting a playoff game before NBA commissioner Adam Silver hit Sterling with a lifetime ban and a $2.5 million fine.
Team president Andy Roeser stepped down in the wake, leaving the organization without a figurehead other than Doc Rivers for a short period.
Earlier Thursday, Rivers and interim CEO Dick Parsons spoke to team employees at their downtown offices, thanking them and encouraging them to keep up their good work.
The Clippers location in the NBA’s second biggest market and an expiring television contract helped the team sell for much more than Forbes’ $575 million January evaluation.
Gregory Nachtwey, director of the Berkeley Research Group, specializes in corporate finance. He said Forbes’ evaluations are normally conservative.
Nachtway also said the team provides owners a unique chance to participate in an exclusive club.
“You’ve got issues like status for the purchaser at stake. There’s visibility,” he said. “There’s a sense of urgency to get into the club, and there’s real scarcity value for an incredible franchise, and by that, I mean the NBA.”
With Ballmer on board, the Clippers can finally start the shut down process on Sterling’s 34-year ownership of the franchise with excitement over the reboot that now seems imminent.