The whirlwind bidding in the sale of the Clippers ended Thursday with an agreement by co-owner Shelly Sterling to sell the team to former Microsoft chief executive Steve Ballmer for a record $2 billion. Lots of questions remain about the deal and the future of the team. Here are some of the most pressing:
Can Shelly Sterling complete the transaction when her husband, Donald Sterling, has not signed off on the deal and seems adamantly opposed?
Probably not. The Sterlings own the team jointly through a family trust and there is no reason to think the trust could unload a valuable asset without the approval of both Sterlings. Donald Sterling has signaled through his attorneys that he is not ready to let go of the Clippers. But one thing has become obvious in the last month — expect the unexpected when it comes to the Sterlings.
Is there a chance Donald Sterling will come around and approve the sale?
It's possible. But Maxwell Blecher, the attorney representing Donald, said that the longtime owner is much more interested in his legacy than he is in the sale price. Blecher said that Sterling wants all the formal charges dropped in the administrative case filed against him by the NBA to terminate his ownership.
Sterling would also like some sort of "vindication" to temper the charges of racism that have dogged him for the last month, his lawyer said.
Will NBA owners still meet Tuesday to decide whether to remove the Sterlings?
It's largely up to Donald Sterling. If he signs off on the agreement to sell his team, it's possible the league would cancel the New York meeting in which three-quarters of the 30 owners would have to approve the Sterlings' ouster. (The Clippers interim chief executive, Dick Parsons, is expected to have a vote.)
But if Sterling does not agree to sell, the league probably would push ahead with the termination hearing.
If the owners vote him out, then who would control the Clippers?
The NBA would control the franchise and day-to-day operations would continue to be handled by Parsons, the former Time Warner chief executive the league installed to oversee the team. If that happens, the NBA will sell the Clippers, with the proceeds going to the Sterlings. One lawyer who has been closely involved in the proceedings said it is possible that the league would then adopt the sales agreement Shelly Sterling negotiated with Ballmer.
If Donald Sterling agrees to the sale, what needs to happen to complete the deal?
First, a formal application must be made to NBA Commissioner Adam Silver to change the controlling owner for the Clippers. The application fee is $50,000. Silver then completes a background check, though that was already largely accomplished with Ballmer's unsuccessful bid last year for the Sacramento Kings. Ballmer had planned to move the Kings to Seattle, but the league rejected that proposal. After that, Silver submits the transfer to the owners for approval. Ballmer, whose net worth is estimated at $20 billion, probably would fly through the approval process. There is no timetable for the action.
Is there a chance the Seattle-based Ballmer would move the team?
There are several reasons a move is highly unlikely. Ballmer recently told the Wall Street Journal he would not relocate the Clippers because the team is worth more in the L.A. market. The Clippers have nine years remaining on their lease at Staples Center. They also are due to sign a new agreement for TV coverage when the current arrangement with Fox-owned Prime Ticket runs out in two years. The big money that props up modern sports deals comes from broadcast rights and the Clippers seem likely to get substantially more with their next contract. A Seattle broadcast deal would pay much less.
What can the Clippers expect from their next broadcast contract?
Prime Ticket now pays about $25 million per season to the Clippers, people with knowledge of the deal said. That is substantially less than what the Lakers get from Time Warner Cable — an average of about $150 million a season over 20 years.
Despite the fact that the Clippers are now more successful, they draw only slightly more than half the viewers that the Lakers do. The team will get a TV revenue boost, but how much is uncertain.
How much would the Sterlings net on a $2-billion sale?
Donald Sterling paid $12.5 million for the team in 1981 and, according to a deposition taken in 2004, he didn't have to put any cash up front. Instead, he assumed a $6-million bank loan and another $6 million in deferred compensation owed to Clippers players.
The profit on a $2-billion sale will be substantial, though Sterling complained in his official response to the NBA that the forced sale would mean that the family would have to pay capital gains taxes of $300 million to $500 million. Assuming Sterling's worst case for capital gains, the couple would still net about $1.5 billion.
Times staff writers Joe Flint and Nathan Fenno contributed to this report.Copyright © 2015, Los Angeles Times