According to sources close to the deal, Microsoft Corporation (NASDAQ:MSFT)’s Steve Ballmer is planning to pay $2 billion for the Los Angeles Clippers. The deal at that price tag would be one of the largest deals in sports history and would let the NBA put the ugly Donald Sterling saga to bed.
Mr. Sterling was banned from the NBA for life after recordings surfaced that had Sterling making a number of racist comments to his “of color” mistress. Never mind that blacks make up most of his team.
Rochelle Sterling, Mr. Sterling’s wife and a co-owner of the Clippers, signed the deal with Steve Ballmer which will now need the approval of 75% of the league’s owners. Given that Ballmer was already vetted by the NBA when he looked to buy the Sacramento Kings and bring a NBA team back to Seattle, it’s expected that the deal could be fast-tracked by the league and expedited in short order.
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That’s not to say that the deal won’t still face hurdles prior to its completion. While Mr. Sterling did authorize his wife to negotiate with potential buyers, it’s unclear whether she has Mr. Sterling’s power of attorney, which Mr. Sterling’s lawyer, Maxwell Blecher, said on Wednesday she does not have. It’s believed that Mr. Sterling wants the N.B.A to drop it’s charges against Mr. Sterling in exchange for his sale of the Clippers.
Huge price tag
Either way, Sterling is set to make a huge profit on the Clippers having purchased the team for a little bit more than $100 million. To put that in perspective, the Milwaukee Bucks, another NBA team, recently sold for $550 million. And while the Los Angeles Dodgers (Baseball) sold for $2.15 billion just two years ago, that deal included much more for the buyers.
The deal included Dodger Stadium and the area surrounding it as well as an expiring television contract that the owners parlayed into a multibillion-dollar long-term deal with Time Warner Cable Inc (NYSE:TWC).
While the Clippers may be an ascending team, and a winning one, something that the Los Angeles Lakers cannot claim this year; it’s nowhere near the financial boon that the Dodgers’ buyers saw though the deal does include a training center and a lease at the Staples Center. Both the Clippers’ local and national television deals will come to an end after the 2015-2016 season and certainly Steve Ballmer is counting on an increase in revenues from each.
There were other groups in the bidding including a group that included Oracle Corporation (NYSE:ORCL) CEO Larry Ellison, David Geffen, Oprah Winfrey and others.
Steve Ballmer’s net worth
Steve Ballmer is believed to have a net worth of $20 billion, so despite the high price tag he’s certainly not making an all or nothing bet on the once laughed-at franchise. Steve Ballmer will not even be the first Microsoft notable to enter into professional sports Co-Founder Paul Allen owns both the Portland Trail Blazers and the Seattle Seahawks.
For a man that once ripped his vocal chords requiring surgery after screaming “Microsoft” repeatedly, ownership of the Clippers may prove painful to the former CEO of Microsoft Corporation (NASDAQ:MSFT).