NBA

Sterling could snag $780M if he’s forced to sell Clippers: expert

Clippers owner Donald Sterling stands to reap one of the biggest windfalls in sports history if the NBA makes good on its threat to force a sale of the team.

Sterling, the longest-tenured owner in the league, set himself up for a huge payday in 1981, when he bought the team for a mere $12.5 million.

Today the franchise is worth an estimated $575 million, and ranks as the 13th most valuable team in the league, according to Forbes.

The team likely would sell for millions more, thanks to the promise of a rich new TV contract. The Clippers’ current deal with FOX’s Prime Ticket cable network expires after the 2015-16 season.

Given the seemingly unquenchable demand for sports programming, a new owner likely will be able to negotiate a more lucrative deal.
In 2010, the crosstown Lakers struck a 20-year pact valued at $3.6 billion with Time Warner Cable.

Both basketball teams play in the Staples Center. Unlike the Lakers, the Clippers have a long-term lease and no ownership in the arena.

The Clippers have made it to the first round of the NBA playoffs, but the Lakers still draw better TV ratings.

Potential buyers already are preparing to make offers, according to a sports investment banker who said the Clippers could fetch as much as the Nets, the fifth-ranked most valuable team at $780 million.

The Clippers are debt free and generate roughly $15 million in annual profit, according to Forbes.

The 80-year-old Sterling, who made the bulk of his fortune in real estate, put down just $2.5 million of his own money to purchase the team and used debt to finance the rest.

NBA commissioner Adam Silver said Tuesday Sterling will be banned for life for his racist rant and vowed to do “everything in my power” to force a sale of the team. Sterling said he would not sell the team.

The sports banker, who knows Sterling, described him as “stubborn” and said he is not surprised to hear the Clippers owner is fighting the NBA.

A casual reading of the NBA rules suggests Sterling may have some legal basis for pushing back against the league, the banker added. But if Sterling’s players refuse to show up on the court, he will have little choice but to sell the team, the banker said.

As it stands, his players are staging protests while advertisers are cutting ties with the team. Cell phone giant Sprint said Tuesday it is cutting the Clippers loose.

“Inevitably, he’ll have to sell,” the banker said. “This would be a great time for him to sell.”

One of the most logical buyers is media mogul David Geffen, who tried to buy the Clippers for $600 million a few years ago. He remains interested in buying the team, WSJ.com reported on Tuesday.

Billionaire Oracle founder Larry Ellison has also been floated as a possibility. In 2010, Ellison, who owns property in Malibu, Calif., lost a bidding war to acquire the Golden State Warriors.

Former Lakers great Magic Johnson has said publicly he would be interested. Johnson, along with financial backer Guggenheim Partners, paid a record $2 billion in 2012 for the Los Angeles Dodgers.