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Former Microsoft Exec $2B Offer Wins Bid for L.A. Clippers

Donald Sterling has sent mixed signals in recent weeks as to whether he’ll acquiesce to the sale. The NBA’s Board of Governors is set to meet June 3 for a possible vote on whether to force an ownership change.

NBA Commissioner Adam Silver banned Sterling from the league for life on April 29. The league on May 9 installed former Citigroup Chairman Dick Parsons to run the Clippers until the ownership issue is resolved.

Conflicting Statements

Sterling has made conflicting statements about whether he’ll allow his wife to sell the franchise they’ve owned since 1981, or fight their possible ouster in court. He signed a May 22 letter authorizing Shelly Sterling to negotiate with the league regarding all issues in connection with a sale of the team.

In a May 27 letter that served as his official response to the charges against him, however, he called the proceedings against him a “sham” and said he should be able to keep the team. Blecher said in a May 27 interview with ESPN that 80-year- old Sterling changed his mind about accepting the sale and that Sterling “wants to retain the team and fight the NBA charges.”

Minimum Bids

Seeking minimum bids of at least $1 billion, Shelly Sterling received offers from five prospective owners on May 28. One group, backed by Ares Management Chairman Tony Ressler and Oaktree Capital’s Bruce Karsh, offered $1.2 billion, according to a person familiar with the bidding. That’s more than double the record amount Avenue Capital Management’s Marc Lasry and Fortress Investment Group LLC cofounder Wesley Edens paid for the Bucks. Milwaukee is the 34th-largest television market and Los Angeles is No. 2, trailing only New York.

Chuck Baker, who heads sports mergers and acquisitions as a partner in DLA Piper’s Global Sports, Media and Entertainment practice, said he was shocked by the reported bid.

“Given the number of viable buyers in this market eager for a trophy asset, $1.5 billion wouldn’t surprise me,” he said in an e-mail. “However, the $2 billion reportedly being paid by Ballmer is an absolutely staggering price for this asset, even with the anticipated boost from local and national television revenues anticipated after the 2015-16 season.”

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Unifying Moment

Audio of Sterling telling a female friend that he didn’t want her bringing black people to his games was posted on the website TMZ on April 25. People including U.S. President Barack Obama as well as current and former NBA All-Stars expressed outrage at the comments.

Silver, who succeeded David Stern as NBA commissioner on Feb. 1, banned Sterling four days after the audio surfaced and said he would urge the league’s owners to force the team’s sale. The forceful action provided a unifying moment between the league and its players, who said they would have boycotted the playoffs that night had Silver not acted as he did.

A forced sale would require support from 23 of 30 owner votes. The NBA has not said whether it would accept a bid that Shelly Sterling receives or seek to find its own buyer after the owners’ vote.

The previous record sale price for a U.S. sports franchise was $2.15 billion, paid in March 2012 by a group that included Guggenheim’s Mark Walter, Johnson and former Atlanta Braves and Washington Nationals president Stan Kasten.

Sterling paid $12.5 million for the Clippers, who have never advanced past the conference semifinals. Following a 57-25 performance this season, the Clippers were eliminated in that round by the Oklahoma City Thunder.

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