Disgraced Clippers owner Donald Sterling(Photo: Kirby Lee, USA TODAY Sports)
A few extra hundred million dollars to try to satisfy Donald Sterling. A frenzied, auction-style bidding process. Hope by the NBA that it can avoid taking the unprecedented step of stripping a team from its owner — especially an owner who, according to reporting by USA TODAY Sports, was evaluated under the terms of his family trust and diagnosed with Alzheimer's disease.
Those analyses and more surfaced Friday as sports consultants assessed Steve Ballmer's $2 billion bid to buy the Los Angeles Clippers — a deal that could be priceless to all parties involved, if it doesn't derail amid litigation filed by Sterling less than 24 hours after his wife agreed to sell the team.
George Postolos, former president and CEO of the Houston Rockets, said the sale, if approved by three-quarters of the NBA's owners, would provide relief to Commissioner Adam Silver, enrich the Sterlings beyond most expectations and, potentially, end a five-week spectacle.
"It's a positive outcome for the league and a good financial outcome for the Sterlings," Postolos said. "And they can get this story off the front page, which I think would be good for everybody."
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Everybody would include the government, which would collect about $600 million in capital gains taxes, and also accountants and lawyers, who will button up the second-richest deal in American sports history — only trailing the $2.1 billion purchase of the Los Angeles Dodgers.
The events of the past week, in which Sterling gave his wife written authorization to sell the team and changed his mind a few days later, brought a growing tension to the saga as buyers lined up to bid against the backdrop of a June 3 vote by NBA owners to potentially kick out Sterling and temporarily take over the team.
Strategically, the contradictory behavior makes sense, according to Marc Ganis, a leading sports consultant who in 2012 advised NFL owner Tom Benson on the purchase of the New Orleans Pelicans. Ganis said there's a reason Ballmer, former chief executive of Microsoft, offered to pay almost four times more for the Clipppers than Forbes estimates the team is worth.
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Ganis said he was not surprised by Sterling's shifting positions — especially his "no-sale" stance during the 48 hours before Ballmer made the staggering bid.
"The best way to get a higher price is to say something is not for sale," Ganis said. "That's the most tried and true way to get a higher price."
Sterling filed a federal antitrust lawsuit against the NBA on Friday, seeking damages in excess of $1 billion and asking that his lifetime ban from the NBA be vacated along with a $2.5 million fine handed down by Silver. Sterling said the league's move to force a sale of the team violated his rights, though the league announced Friday there would be no forced sale, nor a vote to terminate the Sterlings' ownership, because Shelly Sterling, acting on behalf of the Sterling Family Trust, had agreed to sell the team to Ballmer.
Ganis said Sterling would be making a mistake to try to scuttle the deal. In Ballmer he has what every seller wants: a motivated buyer.
"There's a real premium here just to get Donald to agree to the sale," Ganis said. "The number is so high that (Sterling) has real risk here if he doesn't accept this deal because it's unlikely there will be another buyer that steps up at that price."
Despite the quick bidding process, Ganis said Ballmer likely had everything he needed to make an informed offer, and the NBA likely has everything it needs to approve the sale. Ballmer went through the league's process in 2013 when he tried to buy the Sacramento Kings but failed to win approval of the NBA because he wanted to move the team to Seattle.
During negotiations over the Clippers, Ganis said, Ballmer would have been able to review information from the involved parties: Shelly Sterling, who owns half the team and would have access to tax returns; Bank of America, a league creditor which would have financials on all 30 teams and the NBA's chief financial officer.
The NBA reviewed Ballmer's financials during negotiations over the Kings. He reportedly is worth $20 billion, meaning he'd still have 90% of his net worth after paying $2 billion for the Clippers.
"It's clearly more than the team is worth," Ganis said. "But it's for a buyer whom that extra $400 million, $500 million is meaningless. It's just money on a balance sheet, money he's going to give away to heirs or charity at some point.
"You have a legitimate buyer who does not have to go back to partners, who does not have to go back to the bank, who can simply write the check. Ballmer buying the Clippers for $2 billion bails a lot of people out."
The question now becomes, will Donald Sterling have any say, and will it even matter if he does not approve?
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