NBA Commissioner Adam Silver has made his ruling: Donald Sterling is banned for life and fined $2.5 million – the maximum allowed under the NBA constitution – for allegedly making racist remarks.
Silver dropped another bomb.
NBA commissioner: “I will urge the board of governors… to force a sale of the [Clippers]” http://t.co/faFsYun3Es
— Washington Post (@washingtonpost) April 29, 2014
Sterling, the NBA’s longest-tenured owner, bought the team for $12.5 million in 1981. According to the latest valuation by Forbes, the Clippers franchise is now worth $575 million, a 34 percent increase over the 2013 valuation:
The popularity of the Clippers has surged in recent years led by All-Star point guard Chris Paul and highlight reel staple Blake Griffin. TV ratings for Clippers games on Prime Ticket surged 55% last year and commanded the fifth biggest audiences in the NBA. The Clippers racked up the two best regular season performances in franchise history over the last two years. The Clippers share the Staples Center with the Lakers and the Kings of the NHL in the only tri-tenant situation of its kind in North America. The Clippers signed a 10-year extension of their lease at Staples last year that ties the team to the arena at least through the 2023-24 season.
However, what the team is worth is not the same as what someone would pay for it. For example, Forbes had the Milwaukee Bucks as the least-valuable team in the NBA at $405 million, but investors Wesley Edens and Marc Lasry paid a whopping $550 million for the struggling franchise.
“It’s a long-term project,” Basketball Hall of Famer David Robinson said. “No way you turn around a team that has the challenges that team has overnight. Certainly [Lasry] understands it’s a little bit of a project.”
The Clippers are far from a project. They have made the playoffs in each of the last three seasons and are one of the favorites to win the 2014 NBA championship. Just some back-of-the-envelope math shows that the Clippers, based on the multiple of value the Bucks went for, shows the team could fetch in excess of $780 million if put up for sale.
Several groups with desire to purchase Clippers are already stepping forward, with a bidding war expected to exceed $1 billion for Clippers.
— Adrian Wojnarowski (@WojYahooNBA) April 29, 2014
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