Originally published May 30, 2014 at 2:15 am
Updated May 30, 2014 at 9:59 pm

Former Microsoft CEO Steve Ballmer has agreed to buy the Los Angeles Clippers, throwing the future of Seattle’s efforts to land an NBA team into question.

Ballmer bid $2 billion, outdistancing the $1.6 billion offered by a group led by music mogul David Geffen and $1.2 billion from Los Angeles investors Tony Ressler and Steve Karsh. In a statement released late Thursday night, Clippers co-owner Shelly Sterling said she’d signed a binding contract for a sale of the team by The Sterling Family Trust to Ballmer.

Ballmer “will be a terrific owner,” Sterling said. “We have worked for 33 years to build the Clippers into a premier NBA franchise. I am confident that Steve will take the team to new levels of success.”

The offer is the second-highest ever for a sports team. It is pending approval by the NBA, which would almost certainly stipulate that Ballmer must keep the team in Los Angeles and not move it to Seattle. In a statement released late Thursday night, Ballmer seemed to indicate he would keep the team in Los Angeles.

“I love basketball. And I intend to do everything in my power to ensure that the Clippers continue to win — and win big — in Los Angeles,” Ballmer said. “LA is one of the world’s great cities — a city that embraces inclusiveness, in exactly the same way that the NBA and I embrace inclusiveness.”

Ballmer, who stepped down from Microsoft earlier this year, is the biggest partner for hedge-fund manager Chris Hansen’s efforts to bring an NBA franchise to Seattle and build a new arena in the Sodo District. Landing the Clippers would end Ballmer’s involvement with Hansen’s plan and raise the question of who steps in to fill the void.

Besides the issue of exactly when Seattle could expect an NBA team — the league does not appear poised to expand for at least two or three more years — there’s also the issue of Ballmer’s reported bid driving up the price of what a future team would cost.

Hansen’s spokesman, Rollin Fatland, could not be reached for comment.

The bid is just shy of the record $2.1 billion purchase price for the Los Angeles Dodgers two years ago. And it’s hardly a coincidence both teams play in the Los Angeles market, where the surging Clippers — barely on anyone’s radar a few seasons ago — stand to make huge financial gains in coming years.

The Clippers’ regional sports network TV deal with Fox Prime Ticket expires after the 2015-16 season. Analysts predict the team’s new deal could more than triple their annual local TV revenue to between $60 million and $75 million.

The Clippers play in the nation’s second-biggest market, in a revamped Staples Center, with a signed lease running through the next decade that has already proved a profitable shared arrangement with the NBA Lakers and NHL Kings.

After years of irrelevance, the team has surged to the playoffs the past few seasons and looks better positioned for a run at a championship than the Lakers.

Throw in the team’s increased profile in the aftermath of racist comments by Donald Sterling, and some believe the recipe is there for a higher Clippers profile.

Interest expressed by celebrities like Oprah Winfrey, Magic Johnson and Floyd Mayweather in bidding should also increase the Clippers’ popularity among casual fans.

Add in that the NBA is the last of the major sports still awaiting national TV contract renewals, and the factors were there for the Clippers to go for a near-record price. The national TV deals, expected next season, could double the league’s shared $930 million annual take.

Word of Ballmer’s high bid rocketed through the sports landscape Thursday, with some attention focusing on the chance that Donald Sterling might try to stop a deal. Sterling had vowed to fight any attempt by the league to strip him of ownership in the wake of his racist comments.

But his wife, Shelly, recently stepped into the picture and began brokering offers on the team’s behalf. ESPN, citing unnamed sources, said Donald Sterling, 80, recently was found by experts to be incapacitated, giving his wife the power to deal directly with Ballmer under guidelines previously established in the Sterling family trust.

Shelly Sterling’s statement on Thursday noted that she made the deal “under her authority as the sole trustee of The Sterling Family Trust, which owns the Clippers.”

But his lawyer has maintained that no sale
can occur without Donald Sterling’s approval. The husband and wife each hold 50 percent of the club.

As for Seattle, the Hansen group already faced formidable issues before Ballmer dropped out of the equation. The group, which also includes Peter and Erik Nordstrom as minority investors, has a memorandum of understanding (MOU) with the city and King County to build a new $500 million arena.

But that MOU is contingent on the group securing an NBA team to play there.

A Los Angeles-based group led by Victor Coleman and John Glasser has looked into bringing an NHL expansion franchise to the city, but there are no “hockey-first” provisions within the MOU, which would have to be changed or completely rewritten before an arena could be built.

A spokesman for King County Executive Dow Constantine said they would defer to Hansen for comment on Thursday’s events. But the spokesman noted that an NBA team is necessary for the arena deal to go forward.

That deal called for up to $200 million in public financing, to be repaid with taxes generated by arena activity and rent from future teams. It requires Hansen to personally guarantee the debt payments to the city.

A spokesman for Seattle Mayor Ed Murray said he’d have no comment on the Clippers purchase.

Whatever the outcome, Ballmer’s offer will almost certainly help drive up the cost of future NBA franchises — even though the huge L.A. market is unlike most others and prices there won’t always mean a relative jump across the country.

Just one year ago, Ballmer and Hansen tried to move the Sacramento Kings to Seattle before the NBA thwarted that bid. The Kings stayed in Sacramento and were purchased by a new group for $534 million — roughly one-quarter what Ballmer would now wind up spending to realize his dream of NBA ownership.