Ballmer could net $1 billion in tax credits from Clippers deal

by
John Kell

@FortuneMagazine

October 27, 2014, 8:00 AM EST

Former Microsoft MSFT Chief Executive Steve Ballmer could claim as much as $1 billion in tax benefits from his purchase of the Los Angeles Clippers, which is half of what he paid for the NBA franchise earlier this year.

An analysis of U.S. tax laws complied by The Financial Times found that Ballmer could claim about half of the purchase price in current terms over the next 15 years against his taxable income. Those credits could be claimed under an aspect of the tax code covering so-called active owners of sports franchises, the Financial Times said.

Ballmer, a basketball fan, bought the Clippers earlier this year in a bidding battle that included other big names in business, such as Oracle ORCL Chairman Larry Ellison. The final price Ballmer paid easily topped the previous record for an NBA team of $550 million.

Ballmer’s decision to own an NBA franchise comes at a lucrative time for the league. The NBA reportedly reached long-term media rights deals with two networks that would more than double the fees it received under the previous contracts. ESPN has touted a number of ratings records earlier this year around the timing of the NBA finals, and consumer demand for basketball footwear has been strong, another indication of the league’s popularity.

It’s official: NBA says Ballmer is now owner of the Clippers

@FortuneMagazine

August 12, 2014, 1:51 PM EST

The NBA said Tuesday that former Microsoft MSFT CEO Steve Ballmer is now officially the owner of the Los Angeles Clippers.

The announcement, which comes a little over a month after the NBA first confirmed the sale of the team to Ballmer, follows a California court ruling saying that Shelly Sterling, the wife of now former owner Donald Sterling, had the authority to sell the team on behalf of the Sterling Family Trust. Last week, an appellate court refused to hear Donald Sterling’s motion to appeal the ruling that allowed his wife to sell the team to Ballmer for $2 billion.

In its statement Tuesday, the NBA said: “The transaction in which Steve Ballmer purchased the Los Angeles Clippers closed today following the entry of an order by a California court confirming the authority of Shelly Sterling, on behalf of the Sterling Family Trust, to sell the team.

“The NBA Board of Governors previously approved the sale and Ballmer is now the Clippers Governor.”

Earlier this year, the NBA ordered Donald Sterling to sell the team and also banned him from the league for life after he was caught on tape making racist comments. Following the ban, Ballmer rose to the front of a pack of interested suitors that included Oracle ORCL CEO Larry Ellison as well as Oprah Winfrey. The price tag for the team, which Sterling paid $12 million for in 1981, far outpaces the previous record for an NBA team of $550 million.

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