NBA commissioner Adam Silver today put a price tag on racism: More than a half billion dollars, in all likelihood.
Silver set a new standard for sports leagues responding to racism by banning Los Angeles Clippers owner Donald Sterling for life because of his racist comments in a conversation with his mistress. He also is intending to force Sterling to sell the team.
That’s got to hurt, right? Hardly.
Sterling is worth an estimated $1.9 billion. The team he bought in 1981 for $12 million is now worth $430 million, according to Forbes.
Being forced to cash out and walking away in shame will be profitable for Sterling, presuming he walks away and doesn’t fight the decision.
How much will he make?
According to the Washington Post:
However, what the team is worth is not the same as what someone would pay for it. For example, Forbes had the Milwaukee Bucks as the least-valuable team in the NBA at $405 million, but investors Wesley Edens and Marc Lasry paid a whopping $550 million for the struggling franchise.
“It’s a long-term project,” Basketball Hall of Famer David Robinson said. “No way you turn around a team that has the challenges that team has overnight. Certainly [Lasry] understands it’s a little bit of a project.”
The Clippers are far from a project. They have made the playoffs in each of the last three seasons and are one of the favorites to win the 2014 NBA championship. Just some back-of-the-envelope math shows that the Clippers, based on the multiple of value the Bucks went for, shows the team could fetch in excess of $780 million if put up for sale.
And that might be the low end.
Several groups with desire to purchase Clippers are already stepping forward, with a bidding war expected to exceed $1 billion for Clippers.
— Adrian Wojnarowski (@WojYahooNBA) April 29, 2014
A billion dollars on an initial investment of $31 million (in 2014 dollars)? That’s a 3,125 percent return on investment, a near 100 percent return per year. He can pay the additional $2.5 million fine with six weeks of interest on his upcoming payday.
But he’s probably lost the girl.
Related: How Donald Sterling can own the Clippers despite his lifetime ban (The Week).