Donald Sterling will soon be forced to sell the Los Angeles Clippers if NBA commissioner Adam Silver gets his way.
The result will likely be a $1 billion windfall for Sterling, who bought the team $12 million in 1981.
Adrian Wojnarowski of Yahoo Sports:
Several groups with desire to purchase Clippers are already stepping forward, with a bidding war expected to exceed $1 billion for Clippers.
— Adrian Wojnarowski (@wojespn) April 29, 2014
Among those groups, Magic Johnson and Guggenheim Partners will be front-and-center in pursuit of the Clippers.
— Adrian Wojnarowski (@wojespn) April 29, 2014
Magic Johnson was previously reported to be interested, though he denied it.
https://twitter.com/MagicJohnson/statuses/460941062409035776
Johnson’s denial left him an obvious semantic out – “they already have an owner.” Depending on interpretation of Silver’s punishment, the Clippers no longer have an owner. Surely, Johnson will interpret the situation however he pleases if he wants to bid on the team. Nothing is stopping him.
Especially not the commissioner.
“Magic Johnson knows he’s always welcome as an owner in this league,” Silver said.
It’s unclear how the unconventional sale would unfold, but Johnson fronted a group that bought the Los Angeles Dodgers for $2 billion two years in a sealed-bid process. He’s successfully navigated these murky waters before.
There will certainly be other interested parties, too. The Clippers play in a huge market, even if the Lakers dominate it, and they have two of the NBA’s better and more-marketable players in Blake Griffin and Chris Paul.
Earlier this year, Forbes listed the Clippers’ value at $575 million. So why the $1 billion estimates?
There are several mitigating factors, including some that will lower the final price, that should ultimately lift the franchise’s value near 10 digits. Among them:
- The Clippers would sell for the price offered by the highest bidder, not the consensus price.
- Forbes’ valuation includes Sterling as the team’s owner. The Clippers could be much more valuable with better ownership.
- If bidders know Sterling does not have the option to take the team off the market, they could offer less than they would if Sterling’s hand wasn’t forced. (This would lower the final price.)
- Buying the team now would bring a high amount of good publicity to the new owners.