Inside sources tell me Sterling will sell for $700m

I'm gonna take a bye on the legitimacy of this rumor. And I don't know the internal numbers of the Clippers either.

But I'd bet if the Clippers were put up for auction, sell for far more than $700 million. I think $1 billion sounds a lot warmer, but still on the low side. And I can't see the Sterlings leaving $300-500 million on the table. No way.

And it could go far higher than the market price, because, as reported in the other post, there are alotta billionaires sitting around with too much cash flow and nowhere to put it.

If you look at just Sterling himself, he offhandedly sunk $1.8 million into some trifling hoe whom he's not even the slightest bit serious about. And I'd bet she's just one of a at least half a dozen such current girlfriends through an ever-revolving door.

 

Taylor is worth 1.8 billion.

 

Here's where the smarter of the lofs can come in handy (I'm looking straight at you, torocan (and maybe also YummyHawSauce, who tells us he's some hotshot in training)). Tell us about the valuation of an NBA franchise as a sort of mature cash cow/growth industry, given the publicly available numbers.

If Mark Cuban thinks an expansion team shouldn't be sold for less than $1 billion (i.e., in a crapola small market like Memphis or Seattle), what are the numbers running through his mind? If he values an NBA franchise at twenty times annual earnings, that'd be $50 million a year in expected profit - in the smallest, most marginal market.

What would then be the numbers for a team like the Mavs? And how about the second-biggest market in Los Angeles?

 

The NBA will bring in a valuation expert to set a market price for selling the Clippers. That market price will probably include a discount for the damaged brand. In fact, I think there is a good chance that the team will be re-named and re-branded under new ownership. Then the negotiations will commence. Magic Johnson will be encouraged to lead a new ownership group much like he did for the Dodgers.

 

There are plenty of folks that are ready to purchase a team like the Clippers and would be willing to pay big bucks for the franchise. However, I too believe that once the owners approve of Sterling's ouster, the team will be sold quickly. The NBA should have a first come mentality. If an appraiser values the franchise for a certain amount, the NBA has to be willing to sell the team the instant the right buyer is found regardless of the price. The firms in Seattle must be licking their chops right about now!

Whether he makes 700m or 1.3 billion, he has made significant profit for a 12 million dollar investment.

 

I ran into Les Alexander while he was walking his dog about 15 years ago (srs - Boca Grove Plantation, not sure if he still has a home there) and his dog told me he doesn't pick up his ****.

 

Valuation is fine and dandy but when there are real offers on the table, that's the value of the franchise. Valuation expert can value it as 700 mil but if the Seattle group bids 1 bil then 1 bil is the value of the franchise.

In this case, Sterling has a very real good chance of litigating to allow him to sell to the Seattle group.

 

That mofo should be banned for life. The carelessness he has for his **** is unacceptable in this day

 

wait . . . we're getting a white LeBaron? I'm confused

 

Can confirm, I'm Les Alexander.

 

Gretchen, stop trying to make Seattle happen. It's not going to happen.

 

1) why would you become a mod for this?
2) technically you will not be right since Stern is not the one selling the team.

 

lawyers in LA about to get rich...bill baby bill!

 

There's no way he sells. He has to pay a massive capital gains tax if he does.

Besides, it's not at all clear he's going to be forced to sell. Most owners are pretty mum right now and Cuban is clearly against it.

 

I love how ppl want to move the clippers out of LA. It's the second largest market in the US. In fact you can cut LA in half and it's still the second largest market.

 

Where did you guys eat?

 

Given that there are only 30 NBA teams in the world, I'm doubtful you can rely on normal market evaluations like x*earnings/net cash flow. There are some obvious baselines, like the Bucks recently went for $500 mil, so no doubt the Clippers would be worth far more, simply by being in LA.

Got to factor in the ownership premium as well, the value of being an NBA owner. Owners of the NBA teams don't treat it as a for-profit company, but as a source of pride and almost like a toy, to be in one of the most exclusive clubs in the world. Given the level of interest, it's not just a matter of cash flows and earnings, but just how much those buyers personally estimate it, with their hearts, rather than their heads.

I believe the NBA braodcasting rights contract is also expiring in 2015 or 2016, so there's another factor to consider, since that'll bring in a ton of revenue again to the NBA.

 

Spoiler

"Wheels are just about in motion, brah. I found it on this receipt."

 

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Actually he's not. He said its a slippery slope, but than expressed his support for Silver's decision later on. At that time, I'm not sure there was knowledge yet of how exactly the legislation for NBA owners works completely.

Keep in mind that Silver isn't forcing Sterling to sell, he's acting completely within the confines of the NBA constitution, and if 3/4 of the owners vote for approval to force a sell, than Sterling has no leg to stand on. Yes, Sterling can fight it in court, and he certainly will, but he's not going to win.

As for the capital gains tax, I'm not 100% but I believe he can transfer it and regain a ton of the taxes he would have lost, and charitable donations can help. However even if he gets the entire 20% taken out and he sells for 700M, he's still walking away with a 560M after taxes on a 24M investment.... Sterling is going to be ok.

More than likely though, he finds a way to reinvest in order to save on alot of the taxes. Thats more than enough to get some more plastic surgery, some red hair dye, and a new mistress.