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Report: Ballmer’s $2 billion Clippers offer nearly double what Bank of America valued team at

Jul 23, 2014, 8:40 PM EST

Steve Ballmer Steve Ballmer

If you’re Steve Ballmer and you want to make sure you win a bid for the Los Angeles Clippers, what is 10 percent of your net worth?

That’s what Ballmer agreed to do when he bid $2 billion for the Clippers in a deal agreed to by Shelly Sterling and the lawyers for the Sterling family trust. (A sale Donald Sterling is trying to blow up in multiple court cases.)

That $2 billion bid was way, way more than what the “bid book” on the team put together by Bank of America valued the team at, reports Ramona Shelburne and Darren Rovell of ESPN, who got their hands on the bid book.

Ballmer’s $2 billion final bid is 12.1 times the expected 2014 revenues of the team, according to the numbers given to the bidders by Bank of America, which conducted the sale on behalf of the Sterling trust. The document was introduced into court Tuesday and subsequently obtained by ESPN. A person with knowledge of the sale confirmed that bidders were given these documents….

“No team in the history of sports has sold for six times total revenues, so that should give you an idea of how crazy this purchase price is,” said a sports banker who was not involved in the transaction.

Even according to Bank of America, no team has been purchased for more than five times its total revenues. Before the bidding began, Bank of America valued the Clippers between $1 billion and $1.3 billion, double the $550 million sale price of the Milwaukee Bucks, which had set a league record for a sale price just months before.

Clippers interim CEO Dick Parsons (the guy the NBA put in charge) said on the stand in the Sterling v. Sterling probate case on Tuesday that if the Ballmer sale deal goes away, he doesn’t think they will get as much the next time around.

Ballmer didn’t go bargain shopping, but he (like other recent buyers of NBA franchises) are betting on a more owner-friendly CBA, a new more lucrative television deal, and the general growth in popularity of the league, to make up that money over time.

Plus, if you really want something and you can afford it, why not? That’s how I feel about the occasional nice single malt Scotch from the Highlands. If Ballmer feels the same way about the Clippers, why shouldn’t he spend?

  1. eugenesaxe1 - Jul 23, 2014 at 9:02 PM

    There were multiple multi-billionaire groups wanting the team. He didn’t overpay, he bid what he had to. And it’s not like he can’t afford it, and he’s not going to lose money on it.

    • casualcommenter - Jul 23, 2014 at 10:37 PM

      Agreed. He was bidding against an ownership group that included a Silicon Valley billionaire, a media mogul, and Oprah Winfrey combining forces.

      You gotta bid big to beat that trio, to put it bluntly.

      • duhwighthoward - Jul 23, 2014 at 11:13 PM

        Agree with above comments.

        A thing’s monetary value is determined by what someone is actually willing to pay for it.

        A bank that you and I had to bail out precisely because of their inability to evaluate is the last entity whose opinion I would pay attention to.

    • phillycannon - Jul 24, 2014 at 8:38 AM

      This team is only worth what a dummy will pay for it. And please explain how he isnt going to lose money, when he is going to be a billion dollars in the hole…..from the start!. At the end of the end, Ballmer was really bidding against himself.

      • eugenesaxe1 - Jul 24, 2014 at 2:56 PM

        Contrary to what the owners will tell you, few NBA teams lose money. That means he’ll be making money. You cannot count what he paid for the team as “losing money”. And you sit there and call Ballmer a dummy, tell the world how many Micro$oft-like companies you’ve built from the ground up. How many billions are you worth?
        Dummy.

    • phillycannon - Jul 24, 2014 at 3:33 PM

      ok genius….lets decipher your response to me! Your quote….and I read, “You cannot count what he paid for the team as “losing money”.

      Lets ponder your comment for a moment. Hmmmmm, market value for the team is $1.3 at the high point. When someone pays $700 million more than the company is worth, than my friend your investment is now a loser. Its simple math…you dope. If you know about buying your own company, buying a car, buying house….etc, you should realize when you overpay, your at a loss.

      So is this $700 million just going to magically come back in 5 yrs with the Clippers????

      I really want you to answer this question for me since Im the dummy hasnt made a billion dollar company. I might not made a company a billion dollars….but my math is always correct.

      Stop basing your comments eugenesaxe1 off of your emotions

      • eugenesaxe1 - Jul 24, 2014 at 4:09 PM

        OK, I’ll make it real simple for you.
        He bought an item that is guaranteed to increase in value, as long as there’s an NBA and billionaires who want shiny new toys.
        He made a long-term investment (though that’s not why he bought it), which will only grow in value. And where are you pulling 700mil from?
        The Clippers, being in LA, will always be worth more than just about every team in the league, just because LA. Did you see who was interested in bidding? Billionaires teaming up with other billionaires. Bank you could never hope to comprehend.
        I submit that the team was vastly under-valued in the first place because, obviously, quite a few bigbigBIG money people wanted it. Teams in LA/NY will always cost more in teams in MIL or DEN. Add to that, NBA teams aren’t available on ebay, you can’t just order one. They’re rarely available. That scarcity makes it worth more than its listed value.
        There’s your answer pinhead. Game, set and match.

    • phillycannon - Jul 24, 2014 at 5:03 PM

      Anyone who ends their rant, with game, set, match, should be flagged for violation.

      But Ill go back to the simple math. Again…..if the team is valued at the high market value of $1.3, and Ballmer has entered his bid to pay $2 billion, how much more did he overpay???? $700 million. I understand you may not be as slow as you sound, but thats where the $700 million is coming from.

      And you said the Clippers were vastly undervalued lol. Ummm you do realize the Clippers werent relevant until really the Chris Paul/ David Stern mess started to happen. So right now they are vastly OVERVALUED.

  2. mitchem85 - Jul 23, 2014 at 9:12 PM

    Regardless how much something costs up front, if it’s a good investment, it’s a no brainer. Therefore, a non story

    • milkcan44 - Jul 24, 2014 at 12:26 PM

      When seeing this offer, I can guaranty you that thousands of shareholders are glad he’s not running Microsoft anymore.

  3. csbanter - Jul 23, 2014 at 9:21 PM

    He really wanted this team, so he did what he had to do. Its his money case closed.

  4. ghelton03 - Jul 23, 2014 at 9:37 PM

    He overpaid and Sterling is fighting it. Ohhh, to have the problems of the rich.

  5. fordmandalay - Jul 23, 2014 at 9:40 PM

    He and the other owners better make sure they get the Lakers, Celtics, Knicks and Bulls back on top again if they want the League’s value and popularity to go up. Nobody on the planet will care if teams from OKC, Charlotte, Orlando etc. start becoming the face of the NBA.

    • rcali - Jul 23, 2014 at 10:31 PM

      Don’t forget TNT. They know the price you pay for small market teams becoming better than the big market teams. Numbers never lie.

    • duhwighthoward - Jul 23, 2014 at 11:18 PM

      Numbskull, the Spurs just won the finals. It was one of the most highly watched NBA Finals in history.

      Anyways, most basketball fans liked the Charlotte and Orlando teams of the 90’s and OKC has been one of the most exciting and popular teams for years now.

      People just like good basketball. Geez, look at baseball and football. Their popularity hasn’t taken a hit based on the teams that make the World Series and the Super Bowl.

  6. jerdogthompson - Jul 23, 2014 at 10:09 PM

    I gotta hand it to you fordman, that truly is the dumbest post I’ve read in a while. By the way, I read hundreds a day. Talk about draconian views, wake up and smell the exhaust bud.

    #InDocwetrust

    • duhwighthoward - Jul 23, 2014 at 11:22 PM

      I like your comment.

      So if you trust Doc, do you trust he’ll boycott next season? Or do you trust he’ll flip flop?

  7. trollaikman8 - Jul 23, 2014 at 10:36 PM

    Ballmer vs. Bank of America …..

    the Microsoft Zune vs. Mortgage Fraud.

    I’d like to believe that both of these monsters are wrong.

  8. chicago240 - Jul 24, 2014 at 8:40 AM

    Ballmer can spend his money anyway he wants. But don’t confuse monetary value of something with the value one attributes due to ego or other non-monetary considerations. Given the historical multipliers of other franchises, it looks to me that the bid is high from a shear return on investment standpoint. But who the heck cares. This is billionaire money and it’s proof positive that Donald Sterling may have a screw loose that he doesn’t take it. Every owner of a company should have an exit plan and at 80+, this is a pretty fantastic exit.

  9. johnheisman - Jul 24, 2014 at 10:31 AM

    If the deal closes and Balmer pays cash and does not have any minority partners (not likely), and not counting the Clippers, Balmer will be down to his last $18 Billion. Seeing as the highest net worth individuals have lucrative investment opportunities available to them, I think it is likely that Balmer will make or his net worth will increase 1 to 2 billion a year on his other $18 billion in holdings. If he asked for my expert(?) advice I would tell him that he could afford to buy the Clippers and there is no need after relocating to LA to have to rent a room from a homeowner or take on a room mate.

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