Steinberg: Sterling saga ending, everybody wins
It’s over. The nationwide upset regarding Donald Sterling and the Clippers will have a happy ending.
Working behind the scenes, the NBA and Shelly Sterling have crafted a win-win scenario. The Clippers will be sold to a respected, deep pocket owner, Steve Ballmer. The Sterlings turn a $12 million dollar investment into a $2 billion dollar return. After capital gains taxation, they will still net about $1.5 billion. Commissioner Adam Silver achieved his goal of removing the Sterlings from control, put his mark on the relatively new job, and delivered owners a stunning valuation. Owners avoid having to vote on revocation, that June 3 hearing has been canceled. Shelly Sterling promised to indemnify the League against any lawsuit by Donald. She applies to be approved as temporary owner, and the deal goes through.
The principle that racism is not to be tolerated in sports has been reaffirmed. It does not seem necessary to pursue the fine against Sterling now that he is not an owner.
Steve Ballmer has already been vetted in a prior application for ownership and was found acceptable. The process of approval of him as an owner should not take long. He clearly has financial statements that will be reassuring. Though he is not a resident of Los Angeles, which was thought to be desirable, he can establish a home and be proactive in the community. He would also be wise to layer minority ownership with different races and ethnicities reflective of Los Angeles. A few figures from entertainment could be beneficial.
Why did he overbid so massively? The January 2014 Forbes estimate of the Clippers value was closer to $500 million. The Lakers and Knicks are valued near $1.4 billion, and the Dodgers were purchased at $1.8 billion. There was no arena as part of the purchase, but the Clippers have a unique opportunity to win over Lakers-fanatic Southern California. The Lakers will not be competitive for a number of years. The Clippers have two superstars in Chris Paul and Blake Griffin, who are marketable and charismatic. They have a well-known popular coach. As they gain popularity, they can do a lucrative local television contract, benefit from the upcoming NBA TV contract, and benefit from increased suite and ticket prices. Sponsors will increase their contribution. It is certainly fair to purchase an undervalued asset at a high price based on projected future value. Ballmer spent the money because he could.
Commissioner Adam Silver has established himself as a major power in the world of sports and entertainment. He acted decisively to defuse the early crisis by announcing a game plan to remove Sterling. He has shown shrewd judgment throughout. This final step will work out seamlessly with an explosively high franchise valuation that has owners jumping for joy. The owners who feared what their own skeletons might be and felt trapped into voting to revoke, were spared the task. The Players Association and players at large have seen a rapid and effective response to their outrage. Los Angeles will benefit from dynamic new ownership that has the financial wherewithal to keep the roster loaded.
So, with few details remaining, Happy Days Are Here Again! Donald Sterling will eventually see the futility of suing a league that followed due process. But there remains one troubling issue to deal with. Are we now a society with no boundaries in terms of privacy and private thoughts and communications? Racism is clearly a toxic force that has to be guarded against. What are the implications of having an illegally taped phone call aired on TMZ change the world so mightily? What has been lost?
LEIGH STEINBERG is a renowned sports agent, author, advocate, speaker and humanitarian. Follow Leigh on Twitter @steinbergsports.