The Los Angeles Clippers have been sold to Microsoft CEO Steve Ballmer for $2 billion. However, Clippers owner Donald Sterling is fighting the sale on a variety of different legal grounds. The controversy all started when Sterling made comments about minorities that were seen as detrimental to the league. How much money could change hands as a result of his words?
Sterling Stands to Make Over $1 Billion
Although the team is set to be sold for $2 billion, taxes and fees could take a big bite out of that amount. It is estimated that he would receive $1.35 billion after fees and taxes are taken out of the sale amount. This is still an incredible return on his initial $12.5 million investment that he made when he bought the team in the early 80s.
The Owners Stand to Make More as a Whole
If the Los Angeles Clippers are worth $2 billion, how much would the San Antonio Spurs or Miami Heat be worth after winning multiple championships and being two of the premiere franchises in the NBA? Owners of teams in other leagues could also see the value of their franchises increase as there are few opportunities to own professional sports franchises and they are almost guaranteed to be a money making venture.
Sterling Could Cash in Again Via Legal Action
Donald Sterling is suing the league for $1 billion. Although it has been reported that the trust that owns the Clippers would actually pay any damages awarded to him, the money that the trust pays out could be exempt from state and federal taxes. This means that Sterling could keep more of the money that he would make from any sale of the team because the taxes from the sale could be offset from money received from the trust.
The Lawyers Will Make Tens of Thousands of Dollars
As with any lawsuit, the lawyers are going to make out pretty good. Lawyers who represent clients such as Donald Sterling routinely charge $500 or more per hour. In some cases, high-end attorneys will charge as much as $1,000 per hour. Assuming a typical workweek of 40 hours, that would be $160,000 a month per lawyer. If Sterling has his attorneys on retainer, they will probably make roughly the same amount in the form of a flat fee that they will receive no matter how many hours that they put in.
Shelly Sterling Will Make Millions From the Sale
The wife of Donald Sterling stands to make half of whatever Donald Sterling makes as she is still his wife and the trust may be considered community property. If this is the case, she is entitled to half under community property laws. However, it is likely that the Sterlings will divide the money in a manner that reduces their tax burden in a private mediation session. It is also likely that the trust spells out exactly who gets the money and how the money is to be paid out.
How much money will change hands because of Donald Sterling’s words? To put it conservatively, each of the relevant parties in the case will make millions or even billions each. For the most part, everyone related to the case wins even if what Sterling said was considered racist or insensitive.