Bank of America Corp. has been retained to sell the Los Angeles Clippers, whose owners face a June 3 deadline to reach a sale agreement or risk the team being taken from them by the National Basketball Association, two people with direct knowledge of the situation said.
The people requested anonymity because the sale process isn’t public. NBA Commissioner Adam Silver barred Donald Sterling for making racist comments and said he would push the league’s 29 other owners to force a sale of the team.
While Shelly Sterling, Donald’s wife and co-owner of the club, is working with the NBA to sell the team, Donald told the NBA that he should keep the team and called the league’s proceedings a “sham.”
Jim Nash, a managing director at Bank of America, declined to comment. Pierce O’Donnell, the attorney for Shelly Sterling, wife of team owner Donald Sterling, said in an e-mail last night that “while no formal offers have yet been received, Shelly and the NBA are working cooperatively on the transaction.”
“Donald Sterling has authorized Shelly Sterling in writing to negotiate the sale of the Los Angeles Clippers, including his 50 percent ownership of the team,” O’Donnell said. “Shelly is managing the sale of the Clippers.”
Donald Sterling in his response letter obtained and published by ESPN called the league’s punishment an “illegal termination process” that resulted from what he and his lawyers deemed an illegal recording of a “lover’s quarrel.”
“The authors of the charge did not have the courage, decency or honesty to acknowledge the circumstances surrounding Mr. Sterling’s jealous rant,” the letter said.
The NBA has scheduled a June 3 hearing at which Donald Sterling has the right to address the other 29 owners. After that, at least 23 of the 30 owners would need to approve a forced sale.
“The NBA received responses from Donald and Shelly Sterling to the charge to terminate the current ownership interests in the Los Angeles Clippers,” Mike Bass, an NBA spokesman, said last night in an e-mailed statement. “Should the board vote to sustain the charge, the Sterlings’ interests in the Clippers will be terminated and the team will be sold.”
Donald Sterling’s agreement to let his wife sell the club could avoid a potential legal battle with the league. The NBA agreed to let the Sterlings sell the club on condition that neither retains any equity, a person with direct knowledge of the matter said.
Shelly Sterling wants at least $1 billion for the team that finished the regular season with the league’s third-best record, a person with knowledge of the process said last week.
Chuck Baker, who heads sports mergers and acquisitions as a partner in DLA Piper’s Global Sports, Media and Entertainment practice, said the team might fetch as much as $1.5 billion.
“This will likely be the most hotly bidded sports asset since the Dodgers,” Baker said. “There are a number of strong buyers in the L.A. market that are both viable and eager for a trophy asset.”
The Los Angeles Dodgers were sold in a bankruptcy auction to basketball Hall of Fame player Magic Johnson and Guggenheim Partners executives for a record $2.15 billion after former owner Frank McCourt’s proposed television contract was nixed by Major League Baseball Commissioner Bud Selig.
The Clippers, long overshadowed by the more successful Lakers, are a team on the rise. While the Lakers missed the playoffs this past season, the Clippers reached the second round, where they were beaten by the Oklahoma City Thunder. The Clippers are led by All-Stars Blake Griffin and Chris Paul, who is also president of the players’ association.
Among the possible bidders are music executive David Geffen, whose group includes Oracle Corp. Chief Executive Officer Larry Ellison and Oprah Winfrey.
Also interested are former Live Nation Entertainment Inc. Chairman Irving Azoff and former Lakers star Johnson, who has said he would explore a Clippers bid with his Guggenheim partners. Former Microsoft CEO Steve Ballmer is also interested, according to ESPN.
Shelly Sterling, Bank of America officials and a representative of the Sterlings’ real-estate business have been meeting with potential buyers, a person said.
Like the Dodgers -- who started regional sports network SportsNet LA and secured an $8.35 billion contract with Time Warner Cable -- television opportunities are driving some of the Clippers’ valuation.
The Clippers’ local television contract with Fox’s Prime Ticket expires after the 2015-16 season, which aligns with the expiration of the league’s agreements with Walt Disney Co.’s ESPN and ABC, and Turner’s TNT. The networks combine to pay about $930 million a year, a figure that might at least double as channels fight for live content coveted by 18- to 34-year-olds and advertisers.
Locally, the Clippers are the only major pro team whose TV rights will be open for bidding any time soon. Fox needs the team for Prime Ticket, which lost both the Dodgers and Lakers when they became the centerpiece of SportsNet LA, which has English and Spanish versions.
Christian Meissner, head of global corporate and investment banking at Bank of America, declined to comment on whether his firm was selling the Clippers. Speaking in generalities, though, Meissner said in a Bloomberg Television interview that sports teams are no longer “a rich person’s plaything.”
“It’s now very much a business, and it’s multiple revenue streams whether it’s, as I said, content, advertising, in many cases real estate opportunities, securing long-term TV deals.”
The Milwaukee Bucks, who play in the No. 34 television market, last month were sold for $550 million. Los Angeles is the No. 2 market behind New York.
“Never have I seen more billionaires and people with incredible wealth line up to look at a team than with this one,” said Andrew Kline, founder of Park Lane, a sports investment bank.