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Questions and answers regarding the pending $2 billion sale of the Clippers to former Microsoft CEO Steve Ballmer.
Q Can Donald Sterling mess this up?
A Yes, as evidenced by his attorney's statement Friday that Sterling plans to sue the NBA for $1 billion. Worth noting is Sterling waited for the bids to come in and Steve Ballmer's $2 billion winning bid before putting a price tag on the lawsuit. Forget that he could reap a nearly 15,900 percent return on his $12.5 million investment in 1981. Sterling loves litigation and is known for never selling anything.
Q Does this change the face of the sports business across the board?
A Absolutely. Just six weeks ago, the Milwaukee Bucks were sold for an NBA-record $550 million. And now the Clippers are worth almost four times that much? Sure, the Bucks aren't the Clippers and Milwaukee certainly isn't Los Angeles. But the bar has been set and you know what they say: A rising tide lifts all yachts.
Q Will the NBA approve this deal?
A Yes. The NBA recognizes Ballmer as a cash-rich owner who is eager to buy. The former Microsoft CEO already made one attempt at buying a team when he aligned with hedge fund manager Chris Hansen to purchase the Sacramento Kings. And why wouldn't the owners approve this? All their franchises just skyrocketed in value. Put it this way - Ballmer will never have to pay for drinks at the owners' meetings.
Q Will Ballmer move the team to Seattle?
A No. Ballmer did try to buy the Sacramento Kings and move them to Seattle, but the value of the Clippers franchise is largely linked to its location. Paying $2 billion for an NBA franchise in Los Angeles might not make sense to some, but doing so for a Seattle franchise makes no sense. Unfortunately the Emerald City, which lost its Supersonics and Kevin Durant to Oklahoma City in 2008, will still be standing at the NBA altar. And Clippers fans will embrace Steve Ballmer for not being Donald Sterling.
Q Seriously ... $2 billion for the Clippers?!?!
A Keep in mind the Dodgers sold for only $150 million more than that a little more than two years ago and that deal included the stadium! The Clippers have another nine years on their lease at Staples Center. Then again, Steve Ballmer's net worth is $20 billion. He wanted an NBA team and he made sure he got it. The key value here: The Clippers' TV deal with Fox Sports Prime Ticket is up in two years. It was only three years ago the Lakers pulled in $3 billion over 20 years from Time Warner Cable. No doubt Fox will pay handsomely to try to retain the franchise on the rise in L.A.