May 24 (Bloomberg) -- Donald Sterling agreed to let his wife, Shelly, oversee a sale of the Los Angeles Clippers, according to two people with direct knowledge of their decision, avoiding a legal battle with the National Basketball Association that might have diminished the value of the franchise.
The people requested anonymity because no announcement has been made. Max Blecher, an attorney for Donald Sterling, didn’t return phone calls seeking comment on his plan for the team.
The Clippers may sell for at least $763 million, according to the average of four estimates compiled by Bloomberg. The Sterlings are seeking more than $1 billion, said one of the people with direct knowledge of their plans.
Gabe Feldman, director of the Tulane University Sports Law Program, called a sale “the rational decision.”
“A long, drawn-out legal battle was in no one’s best interest,” he said yesterday in a telephone interview. “The business decision was the way out. Hopefully this puts it to rest.”
NBA Commissioner Adam Silver on May 20 said he would prefer that the Sterlings sell the team. “It is their team to sell,” he said at the NBA Draft Lottery.
A sale would end an ugly episode for the NBA, which banned Sterling for making racist comments. Silver, as part of the league’s disciplinary action, said he would push owners to force a sale of the team that Sterling bought in 1981 for about $12 million. The league has scheduled a hearing for June 3, at which time Sterling has the right to make his case for keeping the team.
“We continue to follow the process set forth in the NBA Constitution regarding termination of the current ownership interests in the Los Angeles Clippers and are proceeding toward a hearing on this matter June 3,” NBA spokesman Mike Bass said yesterday in a statement.
Silver has said he is confident that he will get the 23 of 30 owner votes needed to force a sale of the team, which is owned by Sterling and his wife through a family trust. Donald Sterling is recognized by the NBA as the managing partner. Any change of ownership to Shelly Sterling would require league approval.
LeBron James of the Miami Heat, who has been outspoken in his support for Silver’s efforts to force out Donald Sterling, told reporters yesterday that the sale should happen as soon as possible.
“We don’t want this to linger around our sport,” James said. “It sucks that it happened, but the players and the owners and everyone associated with the game know there’s no need for it. The quicker it gets done, the sooner we can move on.”
A number of suitors have expressed an interest in buying the team, which for much of its existence in Los Angeles has been overshadowed by the more successful Lakers.
Among the would-be buyers are music executive David Geffen, whose bid group would include Oracle Corp. Chief Executive Officer Larry Ellison and Oprah Winfrey. Other interested parties include Live Nation Entertainment Inc. Chairman Irving Azoff and basketball hall of famer Magic Johnson who, along with Guggenheim Partners executives, bought baseball’s Los Angeles Dodgers for a record $2.15 billion.
Any buyer would get a team on the rise, led by All-Stars Chris Paul, who is also president of the NBA Players’ Association, and Blake Griffin. The Clippers had the third-best record in the NBA during the regular season. They went on to beat the Golden State Warriors in the first round of the playoffs in seven games, and were eliminated in the second by the Oklahoma City Thunder in six games.
Buyers may benefit from new television deals and overseas interest in the league.
NBA contracts with Walt Disney Co.’s ABC and ESPN, and Time Warner Inc.’s Turner Sports, pay about $930 million a year and expire after the 2015-2016 season.
The league’s rights fees may double in the next agreement, said Ray Katz, an executive vice president at Source Communications and a sports business professor at Columbia University in New York.
Also, the Clippers’ local TV deal expires in 2016 and competing bidders, including a regional sports network owned by the Dodgers, might drive up the price.
The NBA is also benefiting from a growing international fan base that will help attract more sponsorship, media and merchandise revenue, said Rob Tilliss, founder of Inner Circle Sports LLC, which represented Apollo Global Management LLC co-founder Joshua Harris in his purchase of the Philadelphia 76ers.
Sterling was recorded by a female friend saying that he didn’t want her associating with minorities, including former Lakers star Johnson, and that he didn’t want her bringing them to games.
The league installed former Citigroup Chairman Dick Parsons to run the Clippers until the ownership issue is resolved.
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