Former Microsoft CEO Steve Ballmer Buys the LA Clippers For $2 Billion

DroidJason1 (3589319) writes "Former Microsoft CEO Steve Ballmer has purchased the LA Clippers for a whopping $2 billion, also setting a new record price for an NBA team. This deal is apparently tentative until Donald Sterling gives his blessing. Twenty-nine other NBA owners need to offer their approval as well, but that shouldn't be a problem as long as Ballmer reaffirms his commitment of keeping the Clippers in Los Angeles. Interestingly, Donald Sterling had purchased the team back in June of 1981 for $12.5 million." We talked about this earlier in the week when rumors of the purchase started circulating.

Comments

What a punishment

[ClownPenis]

Poor racist bastard. We showed him!

Re:What a punishment

[fizzer06]

Most hated man in America buys team from the second most hated man.

Re:What a punishment

[rudy_wayne]

Will he rename the teams to the Los Angeles Clippys?

Re:What a punishment

[colinrichardday]

Hey, Blake Griffin! It looks like you're attempting a slam dunk. Would you like some help?

Re:What a punishment

[Frosty Piss]

Steve Ballmer has purchased the LA Clippers for a whopping $2 billion ... This deal is apparently tentative

So, in other words, he has *not* purchased the Clippers (yet).

Re:What a punishment

[Adriax]

I wonder if he bought them for help with his chair throwing? I heard he's having problems with his follow through.

Re:What a punishment

[LifesABeach]

One can only imagine what the chairs at the Staples Center will be thinking.

Re:What a punishment

[blueturffan]

No, it sends the message that it's very profitable to own a professional sports franchise.

Re:What a punishment

[Fjandr]

Which in turn can be boiled down to: It's profitable to be extremely wealthy.

Re:What a punishment

[blueturffan]

If I had a dime for every dime I have...

Re:What a punishment

[swb]

I can only guess that the NBA has talked to their attorneys and found out their ability to strip Sterling of his ownership was more complicated and expensive than they thought, compounded by the fact that I think its tied up with his wife and their divorce proceedings. At a minimum Sterling is very rich, very old and probably willing to make it very expensive for the NBA to force his hand. If it's uncertain you will prevail against an adversary capable and likely willing to throw $250 million at lawyers to defeat you, you give in. Even if they would have ultimately won, Sterling could have cost the league many millions and years to achieve their goal.

The upshot being Sterling could demand whatever he wanted to sell the team. The NBA, wanting to be rid of Sterling, was probably more than willing to greenlight a sale to the right buyer -- someone of standing who also had no problem financing the buyout.

There was talk of A-list black celebrities buying the team, but that kind of financing gets complicated -- I don't think any of them individually have the kind of cash to finance a buyout easily, requiring a complex partnership/investment ownership which I think most sports leagues don't favor. I'd also guess that even if a single buyer in this category could have financed this solo (Oprah's net is sub-$3 billion, but probably highly illiquid) they would then be facing a lot of negative PR for agreeing to any terms of Sterling's.

I'd also guess that the NBA may have also agreed to some kind of long-term bump in TV money to offset Ballmer's price tag. This way Ballmer actually pays less for the team while not making it look like the NBA was being forced to buy Sterling out at his price, which would have been negative PR, making them look like they were capitulating to him.

Oh No!

[oldhack]

Ballmer will be throwing chairs from the courtside now.

Re:Oh No!

[mattack2]

Bobby Knight beat him to it, long ago.

(Wow.. I couldn't remember his name, and googling "chair throwing coach" found it immediately. We live in a wonderful time.)

Instead of a new TV I guess

[fey000]

I like how one of the worst CEO's of all time still makes enough money to go on a $2 billion shopping spree.
At my job, I only get a bonus when I perform above expectations...

Re:Instead of a new TV I guess

[Anonymous Coward]

I like how you ignore the fac that he was the 30th employee of and owned an 8% stake in one of the largest and most successful companies ever. Idiot.

Re:Instead of a new TV I guess

[l0ungeb0y]

He wasn't a CEO as much as he was a co-founder of one of the biggest Tech Goldmines ever.
So yeah, for him spending 2 Billion on a sports team is like you and I going out and buying a new Porsche.

Re:Instead of a new TV I guess

[bloodhawk]

Worst CEO of all time? geez most CEO's would give their right arm to be half as successful as he has been since he became CEO. Profits, revenue and sales all increased under him year on year with very good growth across the board while not allowing costs to blow out. Yes he had plenty of failures but from a business standpoint he has actually been a massive success for them with his successes far outweighing the failures, could he have been more successful with a few smarter choices, SURE, but very few CEO's have outperformed him over the past decade or so.

Re:Instead of a new TV I guess

[Bill, Shooter of Bul]

Just as long as you don't compare his performance to that of Apple, Google, or Facebook and completely ignore the failures in the longhorn, vista, windows Mobile, windows tablet, MS hailstorm, MSN Live, Bing, windows RT, Surface, Windows 8 and the decline of the PC form factor. Then yeah, he did great.

Re:Instead of a new TV I guess

[bloodhawk]

Stock price isn't actually a particularly good measure in the case of MS unless you also factor in P/E ratios, When balmer took over they were trading at a P/E ratio of around 40-45. That isn't a realistic number for any company unless they are expecting meteoric growth numbers which given the valuation at the time was just not possible or sustainable, they would have to have grown to well in excess of being a trillion dollar company today to justify that number or to put in perspective they would need to be worth more than apple and google combined. MS currently trade at P/E ratio of around 15.

Re:Instead of a new TV I guess

[theskipper]

Given the dotcom bubble I thought it would be unfair too. But if you look at just large cap tech, it's nowhere near as bad as what happened to the pure-play dotcoms and networkers:

Over the same time frame:
Oracle: $86B -> $185B
Apple: $18B -> $547B
HP: $45B -> $64B
And of course IPOs that happened a couple years later like Google and Salesforce were multi-baggers.

So comparing the peak mkt cap of the bubble is actually not that unfair. Considering Microsoft had a monopoly in 2000 and couldn't even maintain a constant enterprise value over 14 years, again, I wouldn't call that a "wildly successful" performance by the CEO.

Wow that much money?

[linuxguy]

One has to wonder if Donald Sterling would have received this much money for his team without a scandal? It appears to me that he greatly profited from the scandal.

Re:Wow that much money?

[quantaman]

One has to wonder if Donald Sterling would have received this much money for his team without a scandal? It appears to me that he greatly profited from the scandal.

Without the scandal it wouldn't have been sold until after his death.

Almost certainly the scandal would have depressed the price if it changed it at all, I don't see how it made the Clippers more valuable. The longer Sterling held onto the Clippers the more they became associated with racism and the more the brand was damaged. Sterling had to sell quick and that meant the pool of potential buyers were whomever could scrape the cash on short notice. I don't expect it made a big dent in the final price but it probably depressed it a bit.

Next Steps

[bobstreo]

Outsource players to Indian H1B visa holders.

Force cross licensing with beer and food vendors.

Require ticket upgrades before you are admitted, no matter how much you paid.

Seasons will only be good in odd years.

Any televised games will require DirectX support.

This might be good for the team

[MiniMike]

Their hang time should increase dramatically...

You forgot one

[Ecuador]

Go to the first team meeting and start yelling: "Defenders, defenders, defenders!"