The Sterling family trust has signed an agreement to sell the Los Angeles Clippers to former Microsoft chief executive Steve Ballmer for $2 billion, sources tell ESPN.com's Ramona Shelburne.
The agreement is going straight to the NBA for final approval and does not require additional approval from banned Clippers owner Donald Sterling, according to sources.
The Sterling family trust, which owned the Clippers, had rules and guidelines regarding mental incapacitation, sources told Shelburne and ESPN.com's Darren Rovell. Very recently, sources said, Donald Sterling was found by experts to be incapacitated. His wife Shelly Sterling then became the sole trustee and had the power to deal directly with Ballmer, according to sources. The $2 billion agreement was signed Thursday afternoon and sent directly to the NBA for approval.
Rovell reported earlier Thursday that Ballmer's $2 billion bid was the highest submitted, topping those from groups led by music mogul David Geffen ($1.6 billion) and L.A. investors Tony Ressler and Steve Karsh ($1.2 billion).
Geffen confirmed to ESPN on Thursday night that his group had formally withdrawn from the bidding.
Shelly Sterling had pushed to negotiate a sale before Tuesday's board of governors meeting at which both of the Sterlings' ownership interests could be terminated, while Donald Sterling had vowed to fight the NBA's attempts to force a sale. Donald Sterling's attorney sent a 32-page response to the league on Tuesday, but the rebuttal did not address Sterling's mental capacity as part of his defense.
News of Ballmer's bid was first reported by the Los Angeles Times.
Magic Johnson, who was referenced in the racist remarks Sterling made that resulted in the owner's ban from the NBA, expressed his excitement over Ballmer's bid in several tweets Thursday evening.
Steve Ballmer owning the Clippers is a big win for the City of LA and all the people who live in the City of Angels!- Earvin Magic Johnson (@MagicJohnson) May 30, 2014
The $2 billion price tag is just for the Clippers and ranks among the richest ever for a North American professional sports franchise.
The Los Angeles Dodgers were sold to the Guggenheim Group in 2012 for $2.15 billion, but that price included land, parking lots and TV deals, making it more expensive. The only real estate involved in the Clippers deal is for their training facility in Playa Vista.
The Clippers deal would be the most paid by far for an NBA team, after the $550 million paid for the Milwaukee Bucks earlier this year.
Ballmer, 58, was CEO of Microsoft from 2000 to '14, and is worth $20.3 billion, according to Forbes.
He would become the richest majority owner in major U.S. sports, passing his former boss, Seattle Seahawks and Portland Trail Blazers owner Paul Allen (who is worth $16 billion, according to Forbes). Ballmer was the only investor who did not immediately seek out other partners when preparing a bid.
On Wednesday, Seahawks (and former USC Trojans) coach Pete Carroll took to Twitter to back Ballmer.
The Clippers would be so fortunate to get Steve Ballmer as owner. He's a great competitive force & would bring big energy to the LAC fanbase- Pete Carroll (@PeteCarroll) May 28, 2014
It's not the first time Ballmer has bid on an NBA team. He was part of a group that attempted to buy the Sacramento Kings last year, with the intent of moving the team to Seattle. NBA owners voted to reject the proposed move.
Ballmer told The Wall Street Journal earlier this month that, should he obtain the Clippers, he would not attempt to move the franchise from Los Angeles, saying that would be "value destructive."
Sources told ESPN that Ballmer has told friends he is moving to Los Angeles.
Shelly Sterling told bidders to submit letters of interest by Wednesday, with firm offers due by 5 p.m. ET on Thursday.
Geffen's group also included Oracle CEO Larry Ellison and Oprah Winfrey, as well as Guggenheim executives Todd Boehly and Mark Walter, Steve Jobs' widow Laurene Jobs, Steve Wynn's ex-wife Elaine Wynn, and Beats by Dre co-founder Jimmy Iovine.
Former NBA All-Star Grant Hill was part of Ressler and Karsh's group.
On a $2 billion sale, the Sterlings would pay approximately $662 million in capital gains taxes, according to accountant Robert Raiola, sports and entertainment senior group manager at O'Connor Davies LLP in New Jersey.