The Shocking Sale: How Much Did Donald Sterling Sell the Clippers For?
The Shocking Sale: How Much Did Donald Sterling Sell the ...
By Arslan Saleem August 23, 2024 12:20
A prominent real estate mogul and lawyer, Donald Sterling, bought the Los Angeles Clippers back in 1981 for a mere price of $12.5 million to own the team. His reign as owner was tarnished by a string of controversies, such as accusations of racial discrimination and he developed the reputation for inept management. Sterling's ownership of the Clippers became a joke on the court, with the embarrassment of losing seasons and jeering becoming synonymous with consistent futility in Los Angeles. Sterling was a fairly hands-on owner who remained aloof, even as the team did not have its first winning season until 1991-92, some eleven years after he purchased it and was widely bashed for his frugal practices in running the franchise.
The Clippers straddled or resided near the bottom of the NBA for decades under Sterling, who avoided spending money on talent and instead focused exclusively on turning a profit. Though they would make the playoffs occasionally, the team was largely overshadowed by their more successful counterpart, the Los Angeles Lakers. Sterling's ownership was also overshadowed by legal battles, such as a federal housing discrimination lawsuit and allegations of having a "plantation mentality" towards his players that made him seem like he belonged in a time long past the progressive nature of what we know now to be NBA.
Pre-sale of the Clippers
Sterling lost ownership control when a recording of him making racist comments to then-girlfriend V. Stiviano surfaced in April 2014. Players, fans, and civil rights organizations protested the remarks in leagues across North America. Under Commissioner Adam Silver, the NBA faced intense pressure to come down hard on Sterling.
Sterling was recorded making racist comments, and on April 29, 2014, days after the audio surfaced, Silver said Sterling had been banned for life from the NBA along with a $2.5 million fine. That was a rarity in the first days of American professional sports, giving way to one landmark moment when it came to racism and discrimination inside the league. Subsequently, the NBA's Board of Governors initiated a charge to oust Sterling as owner, which they also needed at least 75 percent agreement from the other team owners to effect.
When things took a turn for the worse, Sterling's estranged wife, Shelly Sterling, began negotiating to sell the name of the game. On May 23, 2014, his wife publicly disclosed that her husband had authorized her to sell despite Sterling's later repudiation of the agreement. Sterling's fading mental health resulting from Alzheimer's disease made for a messy ownership situation, exacerbated by his internal turmoil.
The Terms of the Transaction
May 29, 2014: Shelly Sterling agrees to sell the Clippers to former Microsoft CEO Steve Ballmer for $2 billion, a record price, pending approval from NBA owners. These sums the stunning figure marking a high-water mark in NBA history and underscoring just how much value an enterprise can hold these days as it has to do with sports franchises were unheard of. The terms of the deal were as follows:
Full Ownership Transfer: The sale also allowed Ballmer to purchase the Clippers outright and spend the entire $2 billion.
Shelly Sterling Indemnification Clause: She promised not to sue the NBA and would indemnify it from any lawsuits brought by her husband.
NBA Approval: The sale was still pending enough approval from the NBA's Board of Governors, which wasn't expected to vote on it until at least mid-July 2014.
The Sale's Impact and Implications
The change in ownership signified a new beginning for the Clippers. Steve Ballmer, meanwhile, had promised to invest in the team and its facilities, yet it would take at least five more years before this new era could become genuinely competitive. During his stint with the Clippers, Balmer helped champion a change in their identity to become more about building an on-court contender and improving off it.
More broadly, the deal was a turning point in how National Basketball Association teams confront matters of race and prejudice. The league's quick resolve over the Sterling controversy established a template for how it would address such matters moving forward, underscoring its prominence within this social justice and equality era. It has also sparked a conversation about the role of owners in professional sports and how those people need to be made more accountable.
Buying the Los Angeles Clippers for a cool $2 billion became arguably one of the most significant events in sports history. It closed a contentious chapter in the history of Donald Sterling and his wife as owners and positioned the franchise to move on to its next era.
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