Steve Ballmer Paid $2 Billion For The Clippers, But He Might Get Half That Back In Tax Breaks

Steve Ballmer paid $2 billion for the Los Angeles Clippers.

But a new report from the Financial Times said he might get about half of what he paid back in the form of tax benefits over the next 15 years.

Ballmer's purchase was a record for NBA franchises, coming at nearly four times the next-highest amount ever paid for an NBA team.

But the FT found that using a goodwill tax exemption allowed for sports teams, Ballmer could get back $1 billion in taxes.

Here's how the FT lays it out:

Under an exception in US law, buyers of sports franchises can use an accounting treatment known as goodwill against their other taxable income. This feature is commonly used by tax specialists to structure deals for sports teams. Goodwill is the difference between the purchase price of an asset and the actual cash and other fixed assets belonging to the team.

In this case, Mr Ballmer can spread the goodwill over 15 years and reduce his tax liability on his other income by a certain amount for each of those years.

Using a conservative model that assumes Mr Ballmer could account for $1.5bn in goodwill and a re-investment rate of 7 per cent, the potential tax credits equate to about $1bn in current terms. Representatives for the LA Clippers and Mr Ballmer declined to comment.

Ballmer's purchase also came a few months ahead of an expected huge new TV deal for the league, which in October was reported to be worth $2 billion per year.

Back in August, Ballmer made headlines after he got really, really fired up at an introductory pep rally with Clippers fans.

And now Ballmer can get excited about saving a bunch of money, too.