As the now infamous Donald Sterling saga reached its conclusion, the Los Angeles Clippers were finally able to turn the page, beginning a new chapter in their history with former Microsoft CEO Steve Ballmer’s purchase of the franchise. The price Ballmer paid is cited as $2 billion, “almost four times as much as the record set a few months earlier, when the Milwaukee Bucks went for $550 million.” The enormous price tag likely dissuaded most potential investors, but in his interview with Josh Lipton, Ballmer maintains the franchise’s potential profitability. “Can the Clippers make money?” Ballmer asked. “Yes. Can they make more money than any other team in the NBA? Yes.” While Mr. Ballmer is undoubtedly passionate about basketball, he is also confident that the investment was a sound business decision, asserting his expectation that “this will appreciate,” figuring “the Clippers investment will match or outperform a Standard & Poor’s 500-stock index fund.”
The question remains, was the $2 billion
acquisition of the Los Angeles Clippers simply a billionaire fanboy squandering his vast wealth, or does it represent a savvy business investment? At present, it would be difficult to disagree with the latter. After experiencing a seamless transition in leadership, the National Basketball Association seems poised to take advantage of the growth of basketball nationwide. “The NBA [recently] renewed its vows with ESPN and TNT for $24 billion over nine years. This TV deal will generate $2.7 billion per year, up from the current $930 million.” The Association will be sure to parallel the model of success used by the National Football League, whose league revenues are approaching $10 billion. As revenues reach record highs, the sports industry as whole is experiencing unprecedented growth. Steve Ballmer just doesn’t want to miss out.
Vance, Ashlee. “Steve Ballmer’s New Life With the Clippers.” Bloomberg Business Week. Bloomberg, 16 Oct. 2014. Web. 09 Nov. 2014. <http://www.businessweek.com/articles/2014-10-16/steve-ballmers-new-life-as-owner-of-nbas-most-expensive-team>.
Golden, Josh, and Jessica Lipton. “Ballmer: I’ll Own Clippers ‘as Long as I’m Alive'” CNBC. N.p., n.d. Web. 09 Nov. 2014. <http://www.cnbc.com/id/102031870>.