Ira Boudway on Steve Ballmer’s attempt to by the Los Angeles Clippers for $2 billion:
Ballmer, as the numbers show, is offering more than any previous NBA buyer—and more than any buyer would pay for an asset with this caliber of financial performance. Over the last five years, according to Bank of America, NBA teams have sold for an average of 3.4 times their annual revenue. Ballmer’s bid comes in at 12.1 times an estimated annual revenue of $164.9 million for the year ended in June. In other words: Donald Sterling’s hypothetical $5 billion buyer doesn’t exist, and there’s probably nobody other than Ballmer willing to go as high as $2 billion.
Poor Steve Ballmer. Not literally, of course. But he just can’t seem to catch a break when it comes to his pursuit of an NBA team.
The second highest bid was for $1.5 billion. To secure what you desperately want in an extremely rare commodity (only 30 exist) paying a 25% premium to secure your spot is nothing for a guy worth $20 billion. It’s beyond rare, a booming team coming off a toxic owner in the world’s second largest media market with brand new TV deals on the horizon? You’ve got the money, why not?
Billionaires just see things differently, it’s an investment, it’s a toy, it’s an opportunity. Whichever. He could buy the Staples center, LA Live and the Kings and all of a sudden Ballmer is the sports god of Los Angeles.
But then sure, the guy at Business Week has all the answers.
But then there is that laughing at the iPhone video. It is tricky.