If former Microsoft CEO Steve Ballmer buys the Clippers for $2 billion, the Sterlings will owe an estimated $662 million in total capital gains taxes.
Donald Sterling bought the Clippers for $12.5 million in 1981.
According to accountant Robert Raiola, a senior group manager at O’Connor Davies in New Jersey and known as the famed “SportsTaxMan,” the Sterlings will keep about $1.34 billion after the $2 billion sale.
@JJFree2381 if Ballmer pays $2B for Clippers, Sterling will pocket about $1.34B while paying govt about $662M in capital gain taxes.
— Robert Raiola, CPA (@SportsTaxMan) May 30, 2014
On Thursday, ESPN reported that “experts” deemed Donald Sterling to be mentally unfit, which allowed Shelly Sterling to accept Ballmer’s offer as the “sole trustee of The Sterling Family Trust” without Donald Sterling’s signature.
“I am delighted that we are selling the team to Steve, who will be a terrific owner,” Shelly Sterling said in a statement. “We have worked for 33 years to build the Clippers into a premiere NBA franchise. I am confident that Steve will take the team to new levels of success.”
Ballmer said he loves basketball and intends “to do everything in my power to ensure that the Clippers continue to win – and win big – in Los Angeles.”
“L.A. 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,” he said. “I am confident that the Clippers will in the coming years become an even bigger part of the community.”
The league’s owners must approve of the sale, and reports have indicated they will do so so long as Ballmer agrees not to move the team to Seattle. The team, because of television contracts, is worth considerably more in Los Angeles, and Ballmer has indicated he will not move the team.