Clippers $2 Billion Sale a 15,900% Return on Sterling’s Investment

Fmr Microsoft exec Steve Ballmer works out $2 billion deal with Shelly Sterling, but Donald Sterling’s attorney insists there's no deal until he's signed.

Donald Sterling Smiling

According to Shelly Sterling’s team, the bidding war for ownership of the LA Clippers was won Thursday by former Microsoft exec Steve Ballmer. The price: an NBA record high $2 billion—an astonishing 15,900% return on Donald Sterling’s initial investment of $13.5 million in 1981. But Donald Sterling’s attorney warned not so fast, stating as he left Sterling’s home, “There's been no sale. There can be no sale without Donald's signature."

Donald Sterling—who recently won the uncoveted designation of the most disliked person in America (barely beating out Bernie Madoff and O.J. Simpson)—gave his wife Shelly Sterling the rights to sell the team last week, but then, according to his attorney, reversed course and decided again to fight the NBA.

But that apparent change of mind didn’t stop Shelly Sterling from receiving bids from interested parties. Ballmer won the war, outbidding the next highest offer by $400 million. The LA Times reports:

Ballmer bid higher than competitors that included Los Angeles-based investors Tony Ressler and Bruce Karsh and a group that included David Geffen and executives from the Guggenheim Group, the Chicago-based owner of the Los Angeles Dodgers.

The Geffen group offered $1.6 billion and the Ressler-Karsh group $1.2 billion. People familiar with both those offers said they were rejected.

Though Ballmer and Shelly Sterling concluded the deal Thursday, one of Donald Sterling’s attorneys, Bobby Samini, said afterward, "There's been no sale. There can be no sale without Donald's signature." Max Belcher, another of Sterling’s attorneys, said this week that his client was more determined than ever to fight the NBA legally.

The deal also has to be approved by 75% of the NBA’s board of governors, but the LA Times reports that so long as Ballmer agrees not to move the team, it is expected to clear that hurdle, as NBA Commissioner Adam Silver said they preferred a voluntary sale.

ESPN reports that despite the threat of legal challenges from Donald Sterling, Ballmer and Shelly Sterling feel confident that the sale will ultimately go through. 

The $2 billion sale would be the second highest price ever paid for any sports franchise in the U.S., second only to another LA team, the Dodgers which sold for $2.1 billion.

 

UPDATE: After the initial publication of this article, TMZ reported that Donald Sterling was diagnosed with Alzheimer's by two prominent physicians, who believe he may have had it as long as five years. If that report is true, the Sterling estate might have grounds to deny his ability to make decisions on the sale of the team. The diagnosis would also have implications in terms of public opinion and Sterling's legal battle with the NBA.

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