ballmer-headshotSteve Ballmer left Microsoft in February after 34 years, and since then he’s spent time on college campuses giving commencement speeches and on the links honing his golf game.

But he’s also been working the angles on buying the Los Angeles Clippers, the disgraced NBA franchise whose owner Donald Sterling may be forced to sell after uttering racist remarks. A report today from Forbes indicates that Ballmer has offered $1.8 billion for the team, a price tag that would make it the second biggest sports acquisition in the U.S. UPDATE: The LA Times reports that Ballmer has agreed to purchase the Clippers for $2 billion.

Ballmer is certainly at a crossroads in his life. His kids are getting older, and even though he is Microsoft’s largest shareholder, his time as an executive at the Redmond company is in the rearview mirror.

And now — given the interest in the Clippers — I have to wonder whether Ballmer’s future even includes Seattle.

I keep coming back to a comment Ballmer made to The Wall Street Journal earlier this month.

“I don’t work anymore, so I have more geographic flexibility than I did a year, year-and-a half ago. Moving them anywhere else would be value destructive.”

Of course, the quote was directly tied to Ballmer’s interest in the Clippers. But the part that keeps nagging at me is the first sentence about “geographic flexibility,” in which he hints at a possible move himself.

Many people assumed when the bombastic tech exec left Microsoft that he’d be sticking around Seattle, playing a part in the community via philanthropy or — as many in the startup community hoped — angel investing. (See: Seattle entrepreneur starts petition asking Steve Ballmer to create $500M startup fund).

But there’s another possibility too. The 58-year-old Detroit native could simply leave, starting the next chapter of his life somewhere else altogether.

Maybe L.A., where there happens to be a basketball team for sale. Or Detroit, which could use a fresh injection of capital and hope. Or somewhere else.

Seattle_SuperSonics_Main_LogoBillionaires, of course, don’t need to be rooted to one place. And they can own homes in multiple locations, buzzing around on private jets to wherever they want to go. Microsoft co-founder Paul Allen hosts parties on his super yacht in Cannes, and Bill Gates routinely travels to Africa and Asia to check on the progress of his multi-billion dollar foundation.

But both Allen and Gates grew up here, and there’s no question that Seattle is their hometown. (Just look at Allen’s ownership of the Seahawks, and his redevelopment of South Lake Union; and Gates’ investment in the headquarters of the Bill & Melinda Gates Foundation across from Seattle Center).

Ballmer, with an estimated net worth of $20 billion, is different in that way.

Many have already written about the blow that Ballmer’s ownership of the Clippers would have on the chances of a NBA franchise coming to Seattle.

But there’s much more at stake here. Think about Seattle without Steve Ballmer.

Forget about resurrecting our Sonics for a moment. Ballmer’s decision is even more critical, in a much bigger way, for the broader community we call home.

Comments

  • Paul_Owen

    Steve isn’t much of a philanthropist or venture capitalist, so not a big loss. The loss would be Connie Ballmer. She’s the philanthropist, $10 million to Partners for our Children is their largest charitable effort.
    http://www.insidephilanthropy.com/guide-to-individual-donors/steve-ballmer.html

    • Jonah

      Yeah, ’cause it is Connie’s money.
      And you dont’ know what he will do in the future. Pretty shortsighted comment.

      He didn’t become a billionare by being stupid, he won’t move to California and be subject to their taxes.

      • incendious

        He’s retired. He doesn’t have to worry about California income tax. His residual income and capital games most likely is Washington-based. The most he has to worry about is property and sales tax, which I doubt is much of a big deal to keep him from living there. He already bought something in California.

        • phonebanshee

          If you live in California you pay state income taxes in California, including capital gains and dividends. There’s no concept that matches “Washington-based”. For example, if he sells Microsoft stock while he’s a California resident, he pays capital gains to the state.

          • incendious

            Not exactly. It depends on his residency status. He can file for nonresidency in California and residency in Washington.

          • phonebanshee

            We may be talking about two different things. If he’s not living in California, then he doesn’t have to pay CA income taxes on income earned outside California. Just buying the Clippers doesn’t change that. But, for example, if he moves to CA, then sells all his Microsoft stock, he’s going to have a very large state capital gains tax to pay. CA couldn’t care less that most of the gains happened when he lived here – it’s _all_ taxable in CA.

          • incendious

            There’s no way to prove where a person is living the moment a taxable event occurs. He is allowed to own homes in different states, in fact many people do. He can claim residency in Washington and benefit from all of its state’s tax laws and nonresidency in California while owning and living there whenever he likes.

            Double taxation prevents being taxed by both states, so he has his choice.

          • phonebanshee

            No, doesn’t work like that. You might want to start with https://www.ftb.ca.gov/forms/misc/1100.pdf .

          • incendious

            Thanks for the link. It actually helps to prove my point…

            “Example 3…
            Your capital gain income is not taxable by
            California because the source of the gain
            is ____. The interest income is not taxable
            by California and has a source in your state
            of residence. “

          • phonebanshee

            Example 3 is people who have always been a non-resident. Look at example 5.

          • incendious

            It doesn’t apply because that assumes California residency status. I’m talking about California “non-residency” status.

          • Mike

            This is correct. My uncle owns a home in California and lives there 5 months and 29 days per year to avoid CA residency taxes. He keeps travel records in case the IRS audits him.

          • Torg

            Are you an accountant or CPA? If not please do not debate the topic.

        • Rando

          No, the most he has to worry about is estate tax. In CA its 40 percent, in WA its 15-19 percent (that’s on top of the federal estate tax of 40 percent). Some states it is 0. Watch these tech billionaires move to the 0 states as they age.

          • incendious

            Estate tax? Who in California did he inherit property from?

          • Rando

            Maybe I wasn’t clear, he will pay estate tax when HE and his wife die. If he and his wife were both to die as CA residents, they could have as much as 80 percent of their total wealth wiped out in an instant. State income tax pales by comparison. So they almost certainly will not claim residency in CA. The more wealth people have, the more likely they are to reside in a state that has no state estate tax.

          • incendious

            I see. I guess that’s something to think about if he’s worried about his legacy after he and his wife have passed. Personally, if I were a billionaire I’d leave it to my attorneys.

            Like I said, he can still live in California as a nonresident and claim the tax benefits of Washington as a resident. Where he spends most of his time depends on how compliant he wants to be with state tax laws of residency and concerns about audits.

      • balls187

        1/2 of it is.

      • phonebanshee

        Even though it would be expensive to move to CA, in general rich people love high-tax, high service states. Take a look at http://en.wikipedia.org/wiki/List_of_U.S._states_by_the_number_of_billionaires – the first two on the list, sorted by either raw numbers or per-capita, are CA and NY. The idea that rich people avoid high-tax states just isn’t true.

        • Dawgs4ever

          No. People don’t live in those states because they are high-tax, high-service states. They live in CA and NY because that’s where the talent is to staff businesses and where the two biggest cities in the country are located.

  • George

    He should know about ‘value destructive’.

  • tsupasat

    Seattle would do fine without him. Not that I don’t like him or his money. But the thought of Ballmer helping out Detroit is pretty nice. They need his money more than we do.

    • Torg

      But make sure he doesn’t pull a Zuckerberg in NJ and just give it to a politician or district blindly without remaining involved…

  • Matt

    From the standpoint of expansion or someday relocating a different franchise to Seattle, it wouldn’t hurt to have another NBA owner in Seattle’s corner. If Balmer becomes the Clippers owner, he would seem to be another owner we can count on to vote in favor of bringing the NBA back here.

  • Paul Riden

    Good-bye Steve, good luck to you and the Clippers ! As for Seattle, if you really want the Sonics back, and/or the NHL, it’s time to get that arena built !!! It is time to get over the past and move on. So, stop being a victim and get it done! Repeal I-91 and vote yes to funding that arena.

  • CapHillNerd

    He’s clearly going to move the team to Seattle. It’s currently the fastest growing big city in the country. It’s a boomtown. With those players, every game will sell out. LA will still have the Lakers. The Clippers won’t have any local competition. Win-win.

    • Dave

      No way. Seattle is a small market for tv viewing and attendance relative to LA. You could not get to a $2 billion valuation for a team in Seattle. Plus the NBA appears to have learned their lesson from the sonics move fiasco. Unlikely the NBA would permit the clippers to move here. They don’t want to lose a major market footprint. Ultimately Seattle’s best shot for a team was either moving a small market team like Memphis or perhaps a small/mid-market team with an old stadium and little appetite to build a new one, like Sacramento. But in either case Seattle needed a backer with many billions and a strong desire for a team. Ballmer was the ideal candidate. No one else leaps to mind now. I think the nba still wants a team in Seattle because it is a bigger tv market to have a gap in, but without Ballmer unclear who writes the checks to move the team here.

  • arrow2010

    Typical of Ballmer. Always overpaying. Remember aQuantive for $6 billion or Skype for $8.5 billion? This guy always overpays.

  • SunnyDeigo

    Seattle sucks. Who wants to live in a cold gloomy climate when you can have summer weather year round.

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