May 6 2014, 12:13pm CDT | by Forbes
The NBA’s effort to oust Los Angeles Clippers’ owner Donald Sterling from its ranks is just getting started. Sterling has said he plans to fight any forced sale that the league believes it can swing with a vote of three quarters of its owners, so figure on a lot of lawyers getting involved before this thing is settled.
That hasn’t stopped speculation on the identity of the Clippers’ next owner, if and when a sale happens. Most of the speculation revolves around celebrities – Oprah, David Geffen, Floyd Mayweather. But Don Peebles, a New York-based real estate developer whose firm, Peebles Corporation, is one of the most successful black-owned businesses in the country with a commercial and residential portfolio of $4.5 billion, has his own idea of who the next owner of the Clippers should be – him.
Wealthy (the 54-year-old has been a multimillionaire since he was in his 20s after dropping out of Rutgers University to embark on his first real estate deal) and well connected (the lifelong Democrat has hosted fund raisers for Bill Clinton and Barack Obama, and contributed money to politicians on both sides of the aisle), Peebles has proclaimed his intent to form an investor group to take the Clippers off the hands of the controversial Sterling, an announcement he initially made on CNBC last week. He plans to unveil the names of others in the group in the coming weeks.
A big basketball fan who has traveled the country with his son to watch the NBA Finals in Detroit, Los Angeles and San Antonio, Peebles never particularly pursued the idea of buying a team until the fast and furious fall of Sterling sparked the sudden revelation of an opportunity. “When things got to the point of the president speaking about it, I thought I’ve got to get going,” he says. “The attraction for me is that this is a good investment for a team that’s evolving – at the right price.”
There’s the rub. The timing for a buyer isn’t the best: after so many years as an NBA door mat, the Clippers now boast a strong team with two of the league’s more marketable players in Chris Paul and Blake Griffin. They’ve hit an upswing in the NBA’s most glamorous market just as the Lakers have nosedived. Basing estimates on the recent $550 million price tag of Milwaukee Bucks, many see the Clippers selling for $700 million to $1 billion. Peebles points out that the pure financials put the value of the club at the low end of that range, but of course competitive bidding for a major sports team in L.A. often results in a nice premium for the seller (remember the Dodgers?).
A selling point that Peebles hopes to impress on the NBA Board of Governors, which must approve a sale: that he’d make a different kind of owner, one who makes it a point to mentor players in business and in life, so that fewer of them will avoid the pitfalls that have resulted in an alarming number of them going bankrupt within a few years of retirement. Long active in efforts to introduce entrepreneurial principles to young people, Peebles’ high powered life has already resulted in friendships and/or business relationship with ex-NBAers Alonzo Mourning, LaPhonso Elli s and Grant Hill, among others. Shaquille O’Neill once bought a couple of apartments in one of Peebles’ Miami buildings. NBA rules limit how much an owner can include a player can collaborate on an outside business deal, but he figures just advising and networking can make a big difference.
“Think of what the impact would be if this league could be a long term, sustainable source of wealth,” he says.
The issue that can’t be ignored: when it comes to the NBA approving a sale, how much weight ought to be placed on the race card? Surely, introducing a black man as the Clippers’ next owner just as it’s showing Sterling the door over racist remarks makes for a tempting public relations coup for the league. Peebles acknowledges this, but thinks the angle can be overdone. “It would look good, but it could also be perceived as a cliché,” he says. “They ought to make their decision based on business.”
It’s true. When all is said and done, the most important color for the NBA is the same as for any other business: green. We’ll see how well Peebles and his group compete on that front, when and if Sterling is gone for good. “Mr. Sterling will fight to protect his interests,” he says. “But I don’t see this being protracted. I see weeks, not months or years.”
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