Friday, January 18, 2019

L.A. CLIPPERS ARE SOLD FOR $2 BILLION

May 30, 2014 by · Leave a Comment 

In a deal that, if approved, would seem to defy all business wisdom, former Microsoft chief Steve Ballmer has agreed to buy the Los Angeles Clippers for $2 billion, Shelly Sterling, wife of embattled team owner Donald Sterling, said on Thursday. Ballmer reportedly beat out a $1.6-billion bid from entertainment mogul David Geffen, Oprah Winfrey and Laurene Powell Jobs. If approved by all sides, including Donald Sterling, the deal would represent the second-highest price for a sports team since Guggenheim partners bought the L.A. Dodgers in 2012 for $2.1 billion. However, the Dodgers deal included Dodger Stadium, all parking and concessions revenue, half ownership of the parking land, and a TV cable channel. The Clippers deal includes no such assets. Financial analysts called the deal a “trophy” acquisition, since it can not be justified on the basis of a multiple of annual profits, as most similar transactions are. On the other hand, Sterling, who originally paid $115 million for the team, could realize a financial windfall. Unlike Frank McCourt, the former owner of the Dodgers, Sterling may be able to keep the entire $2 billion from Ballmer tax-free under an IRS loophole covering “forced” sales. But it’s by no means certain that Sterling will allow the sale to conclude. According to today’s (Thursday) Wall Street Journal. the NBA has demanded so-called covenants that would require Sterling to agree not to sue the NBA, pay the $2.5-million fine that the NBA leveled against it, and to accept the lifetime ban imposed by the league.