Former Microsoft CEO Agrees to Buy Clippers for $2 Billion
Former Microsoft CEO Steve Ballmer has won the bidding war to acquire the Los Angeles Clippers for a whopping price of $2 billion.
Sources tell Variety that Ballmer parked himself at the Peninsula Hotel in Beverly Hills during the past week while he negotiated with the bankers handling the deal on behalf of Shelly Sterling, estranged wife of the team’s embattled owner, Donald Sterling.
“I am delighted that we are selling the team to Steve, who will be a terrific owner,” Shelly Sterling said. “We have worked for 33 years to build the Clippers into a premiere NBA franchise. I am confident that Steve will take the team to new levels of success.”
The deal still requires the approval of the NBA’s board of governors. But that should be a rubber-stamp vote, given that the league is eager to lift the cloud of put the controversy over Donald Sterling’s racist rant that went viral last month. Also, Ballmer sails in with deep pockets, corporate connections and a passion for the game. And the $2 billion pricetag for the Clippers — an improving but hardly storied franchise — has just hiked the value of every other team in the league.
“I will be honored to have my name submitted to the NBA Board of Governors for approval as the next owner of the Los Angeles Clippers. I love basketball,” Ballmer said. “And I intend to do everything in my power to ensure that the Clippers continue to win – and win big – in Los Angeles. L.A. is one of the world’s great cities – a city that embraces inclusiveness, in exactly the same way that the NBA and I embrace inclusiveness. I am confident that the Clippers will in the coming years become an even bigger part of the community. I thank Shelly Sterling for her willingness to entrust the Clippers franchise to me, and I am grateful to NBA Commissioner Adam Silver and his colleagues for working collaboratively with me throughout this process.”
The rushed sale of the Clippers recently became a battle of billionaires, each with a different motivation for pouncing on the unexpected opportunity to snag a suddenly red-hot NBA franchise in Hollywood’s backyard.
David Geffen led the charge for a rival bid that involved Guggenheim Partners, the investment fund that led the $2.15-billion buyout of the Los Angeles Dodgers in 2012. Oracle software billionaire Larry Ellison had been part of the Geffen-Guggenheim group but is said to have dropped out in the past few days. Oprah Winfrey and Magic Johnson also lent their star power and wallets to the group’s bid. Johnson is already in biz with Guggenheim as a part owner of the Dodgers.
Clearly, the timing of the Clippers controversy could have hardly been better to spur interest in the long-suffering franchise, which has become a serious playoff contender, recently losing in the second round to the Oklahoma City Thunder.
With high-profile (and highly marketable) young stars in Chris Paul and Blake Griffin, the Clippers have adopted an entertaining style of play that lends itself to the L.A. market. Moreover, their success has come as the city’s long-dominant team, the Lakers, have struggled, coming off second-worst season in franchise history.
The fact the Lakers have such a seemingly long road to climb to get back into championship contention — including the injury to star Kobe Bryant, who appears to be entering the later-stage of his career; and the death of owner Jerry Buss, leaving stewardship of team in the hands of his children — opened the door to a displaced a surge of excitement in the Clippers, in a town historically associated with backing a winner.
In recent weeks, that symbolic transformation included Hollywood figures — long associated with occupying the high-end seats at Lakers games this time of year — beating a path to Staples Center to watch the Clippers instead, after a stretch where it seemed the only star with any interest in them was courtside fixture Billy Crystal. (In the ultimate coup, Jack Nicholson even joined Crystal at a game, and later showed up during the playoffs.)
Another contender for the team was said to have been Patrick Soon-Shiong, the L.A.-based surgeon who made his fortune through cutting-edge medical technology innovations. He owns a 4% stake in the Los Angeles Lakers and has been hovering around numerous sports and entertainment deals for the past few years.
Industry sources said Ballmer emerged as the top contender for the team in part because it’s believed he’d be able to largely pay cash for the team. Sources familiar with Ballmer’s thinking said the former Microsoft CEO sees the chance to parachute in and lift the shadow over the team as a means of rehabilitating his image after a rocky run at the end of his nearly 40-year tenure at Microsoft, which concluded last year.
The Clippers came on the market after a recording of Donald Sterling exhibiting unabashedly racist sentiments in a telephone conversation with his girlfriend wound up on TMZ. The NBA voted to ban him for life from participating in the league, a dramatic sanction that put the team immediately in play.
For Guggenheim, the prospect of grabbing the Clippers would have been a serendipitous opportunity to add to its share of the L.A. sports market by controlling two major teams. The Southern California-area TV rights to the Dodgers are tied up in a 20-year pact with Time Warner Cable (and may be inherited by Comcast if that merger goes through), but it’s conceivable that the Clippers would have been added to the programming mix to strengthen that offering.
As the jockeying for the Clippers comes to a close, speculation lingers that Donald Sterling may yet take legal steps to stop the sale.
Bank of America Merrill Lynch and Greenburg Glusker advised Shelly Sterling on the sale.
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