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TheStreet Open House

LA Clippers Sale Not a Slam Dunk but Sterling's Wife Is Entertaining Bids

NEW YORK (TheStreet) -- The tawdry story of the Sterlings may be just about over, at least as far as the National Basketball League is concerned.

Shelly Sterling, who was given control of the team by her estranged and notorious husband Donald, is looking for a billion-dollar payoff for selling the Los Angeles Clippers. At the same time, her husband remains steadfast in denying he's a racist for comments recorded from a telephone conversation with his much-younger girlfriend.

According to the reports from a variety of sources including The Associated Press, "major players" with the considerable financial means to run a franchise in one of the nation's biggest cities continue to increase their bids for the Clippers.

The payoff to the Sterlings could be in the $1.5 billion to $2 billion range.

Prospective buyers received assurances Shelly Sterling wants to sell 100% of the team, which was an important condition for the NBA, according to ESPN.

The Sterlings' are said to be expediting the sale of the team before next week so they can be part of the negotiation process and, more important, reduce a massive capital gains tax liability.

The NBA Board of Governors is set to meet Tuesday and vote on whether both Sterlings' ownership interests could be terminated. If 75% of the league's owners vote to rescind the Sterlings' ownership group, then the Sterlings no longer can control the sale or the terms, although they would be entitled to the proceeds.

Donald Sterling originally bought the Los Angeles Clippers in 1981 for $13.5 million, and would be responsible for paying a capital gains tax of 33.3% on the difference between $2 billion minus $13 million. This means the Sterlings' control of negotiations could help them reduce potential tax liability of as much as $500 million or more when the sale is finalized.

The league's owners know a sale couldn't be completed by next Tuesday, but if an agreement was in place the NBA would give the Sterlings extra time before holding any meetings, according to the AP. The league hopes a voluntary sale would remove the potential for any legal action by the Sterlings.

Meanwhile, Donald Sterling, who was barred from the league for his recorded comments, is allegedly now worrying about his legacy. Max Blecher, Donald Sterling's personal attorney, has said Sterling was reluctant to authorize his wife to negotiate with the NBA "regarding all issues in connection with a sale" of the team.

"On May 22, that's what he wanted to do," Blecher told ESPN. "But as time has evolved, he's come to a much more hard-line position...I don't think that money is the issue to him. It may be for her. He's worried they've ruined his image for 35 years and he's not going to sit still for it."

Bloomberg, quoting anonymous sources (of course), said Shelly Sterling has sought the help of Bank of America (BAC) to handle the sale. The bank refused to comment on that report.

There are lots of groups that want a piece of the NBA action in the city that also hosts the Lakers.

They include a group led by music mogul David Geffen that includes Oracle (ORCL) CEO Larry Ellison and Oprah Winfrey, a group led by former NBA All-Star Grant Hill and billionaire investor Tony Ressler, and even billionaire and former Microsoft (MSFT) CEO Steve Ballmer.

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This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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