Ballmer reportedly wins $2B bid to buy Clippers, entire sports world turns upside-down

Okay, hands up everybody who saw this coming:

Los Angeles Clippers owner Donald Sterling does not have the authority to stop a $2 billion sale of his team because he has been determined to be mentally unfit to make decisions related to the family trust, a person familiar with the situation told USA TODAY Sports.

The Sterling Family Trust owns the team, with Donald and his wife Shelly each owning a 50% share. The trust spells out provisions and procedures related to the mental capacity of the trustees, and Donald Sterling did not meet the standard in a determination by experts, giving his wife sole decision-making power for the trust, the person said.

Shelly Sterling reached a deal Thursday with former Microsoft CEO Steve Ballmer to sell the Clippers for a record $2 billion.

That’s pretty … I guess “crazy” would be an insensitive way of putting it, huh? Let’s go with “unexpected,” though that seems a bit understated if the denouement of this whole Clippers mess is that everyone involved gets to avoid messy lawsuits and ownership votes to eject Sterling because of a family trust’s private psychologist.

Easier to designate as madness, meanwhile, is that $2 billion sale price. (As yet unconfirmed, but reported by multiple sources.) As I discussed yesterday over at Sports on Earth, it was expected that the Clippers were going to sell for a record price, given escalating sports team values, their presence in the mammoth L.A. market, and the fact that for once they aren’t league doormats anymore. But consider that the previous record, set just last month, was $550 million for the Milwaukee Bucks; and that earlier this year Forbes estimated the Clippers to be worth just $575 million, with the NBA’s most valuable team, the New York Knicks, clocking in at just $1.4 billion; and that the only sports franchise ever to sell for $2 billion was the L.A. Dodgers in 2012, a team that plays in a more popular sport and earns more than double the Clippers’ annual revenues, a figure that will likely hold true even after the Clips renegotiate their TV deal in 2016; and you’ll be forgiven for wondering whether Ballmer shouldn’t have his head examined as well.

The leading theory for what the hell just happened is what you might call billionaire glut: Thanks to the U.S. economy’s increasing propensity for concentrating all its wealth in a tiny number of people, there are a heck of a lot more rich guys like Ballmer in the market for sports teams these days, and not an appreciably larger number of sports teams for sale. That imbalance of supply and demand drives prices through the roof, with would-be hoops magnates bidding each other into oblivion in order to find something to buy with their money. (It’s not too unlike the real estate market in places like Vancouver, where Asia’s one-percenters have created a housing bubble by buying up condos left and right simply as a place to park their money — though you could argue that owning an NBA team, even the Clippers, is more fun than an apartment in Vancouver.) It has to stop somewhere, and it could yet be that $2 billion for the Clippers will be seen as an outlier — even Nate Silver, in his regression-analysis-driven projections of the effects of billionaire glut, could only come up with a Clippers value of $580-950 million — but it does help indicate why sale prices seem so suddenly out of whack with actual team revenues: These are rich men’s toys, yes, but they’re exclusive toys, and there are a lot more rich men wanting to be the ones to find them under their Christmas tree.

The fact that it’s Ballmer who is Clippers owner-in-waiting, meanwhile, means that he’ll no longer be part of Chris Hansen’s proposed ownership group in Seattle, where he was the moneybags behind Hansen’s hey-kids-let’s-put-up-an-NBA-team enthusiasm. Hansen’s supporters are trying to put a happy face on this, but with no team, no deep-pocketed partner, and an arena deal that expires in 2017, things aren’t looking too rosy right now. Though maybe once the NBA sees what nutso prices those billionaires are willing to pay for teams, they’ll rethink expansion.

The week that Newt Gingrich called for non-profit sports team ownership

And then there’s this:

Yes, that’s the Newt Gingrich, not Fake Newt Gingrich or The Real Newt Gingrich or any of those. Apparently the Donald Sterling scandal was enough to get the guy who thinks that the solution to corporate tax dodging is to lower corporate taxes to a rate they won’t cheat on to decide that for-profit ownership is wrong for the Los Angeles Clippers, because hoops belongs to the people, man. (Though given Gingrich’s past history with not-for-profits, maybe he just means a shell corporation that would pay a local rich guy to run the team.)

Anyway, it all gave ThinkProgress’s Travis Waldron a good opportunity to go on about the benefits of public and not-for-profit ownership of sports teams, which can only be a good thing:

Even if you don’t care how many games the Clippers or any other privately-owned team wins, even if you hate sports, there are benefits to fan ownership. A fan-owned team has direct ties to its community, and so it’s next to impossible that the team could pick up and move to a new city if its current home decides not to give it massive public subsidies for a new stadium. That both avoids the ugly problems that occur whenever cities fork over hundreds of millions of dollars in subsidies and keeps teams from playing hop-scotch to new cities. A private owner would have moved the Packers out of Green Bay decades ago. Instead, they remain in a tiny town in Middle-of-Nowhere, Wisconsin.

Of course, the Packers did manage to get Green Bay (actually Brown County) to fork over $295 million in subsidies in 2000 by threatening to play hopscotch to a new city (or to have the NFL force them to move, or something — the threat was never quite clear), so it’s not a perfect point. But still, public ownership does have its benefits.