Ballmer: 2 Billion for Clippers

[K-9]

The local TV deals in some of those large markets can compete with the NFL deal. The soon to be burgeoning NBA international market helps as well. A team in a similar market to Buffalo will go for a lot less though. The Bucks just sold for $550M. $1.25B is the number in my was for the Bills sale price.

 

^This. The Lakers local TV deal averages $200m annually over 20 years. NFL teams WISH they could do that, but they are barred from cutting separate local deals. And you raise a great point about international markets as the broadcast rights worldwide are about to explode.

 

GO BILLS!!!

 

These guys can always leverage their assorted holdings.

 

The league doesn't prefer buyers who have to leverage their assets to raise capital. They want a single owner that can write the check himself if needed.

 

GO BILLS!!!

Edited May 31, 2014 by K-9

[Kirby Jackson]

 

 

They must "approve" of the new owner, they can come up with whatever reasons they want for not approving. If 24 owners do not approve, ... no sale.

 

The only guarantee in this scenario is that they'll chase every dollar that they can chase. You can bet your last dollar that they're all thinking of where to move the team to make more money, as a league, which will benefit each of them. They've already had struggles with Wilson on the topic.

Golisano, for example has already been approved. I have heard that there is one other group that is interested that has as well (but I am not sure who it is). My guess would be J. Jacobs but that is a guess.

 

When teams are transacted the other owners pretty much always approve the new buyer unless they have financial issues.

 

Ultimately, the 4 person group will pick the owner and if they meet the financial requirements for ownership they will be approved. Unless they pick Trump there is a 0.00000000000000% chance that the owner will not be unanimously approved.

[Mr. WEO]

I've never met the guy or paid much attention to his career other than the times he's flirted with buying NBA teams in the past so I don't doubt your assessment of the man as a CEO or his past deals. But this deal for the Clippers is actually the going market rate these days, which is the most amazing thing about this story and what holds for the Bills' ownership future. It used to be that professional sports teams were play things for rich owners to play with outside of their real enterprises. No one used to buy a sports team hoping to make money, it was a status symbol or a passion project, never one for monetary gains. That's all changed in the past decade or so. Now, because of the ludicrous money in the TV deals, sports franchises -- even sorry ones -- are printing presses for cash.

 

That's what I feel is the takeaway from the past couple sales of major franchises. MLB, the NBA and the NHL are not as valued as the NFL brand in terms of ROI yet the Dodger's sale for a then unheard of amount was almost immediately recouped thanks to the TV money. The Bills are going to go for a big chunk of change, if Mary Wilson and Overdork have any business sense (which they must), the Clipper sale increased the value of the Bills simply on the strength of the NFL brand.

 

 

 

The more pricey the team, the more likely it is they'll stay in Buffalo. It sounds backwards, but it's not.

 

Ralph Wilson's fortune was based on the value of the Bills.

 

Fox is not buying the broadcast right for the Clippers for "billions".

[Ronin]

The NFL dwarfs the NBA.

 

It may dwarf the NBA in some senses, but in terms of ticket revenue the NBA dwarfs the NFL's.

 

Average per-game attendance for an NBA game has remained relatively steady at over 17,000 over the last ten years.

 

The average NFL attendance averages around 65,000 annually. That's 520,000 average per team. Ticket prices are comparable.

 

41 NBA home games at 17K apiece is 697,000.

[Mr. WEO]

Golisano, for example has already been approved. I have heard that there is one other group that is interested that has as well (but I am not sure who it is). My guess would be J. Jacobs but that is a guess.

 

When teams are transacted the other owners pretty much always approve the new buyer unless they have financial issues.

 

Ultimately, the 4 person group will pick the owner and if they meet the financial requirements for ownership they will be approved. Unless they pick Trump there is a 0.00000000000000% chance that the owner will not be unanimously approved.

 

So Golisano with that con man Congel is "already approved", but Trump is a more shaky approval?

 

What's your source?

[Ronin]

Golisano, for example has already been approved. I have heard that there is one other group that is interested that has as well (but I am not sure who it is). My guess would be J. Jacobs but that is a guess.

 

When teams are transacted the other owners pretty much always approve the new buyer unless they have financial issues.

 

Ultimately, the 4 person group will pick the owner and if they meet the financial requirements for ownership they will be approved. Unless they pick Trump there is a 0.00000000000000% chance that the owner will not be unanimously approved.

 

Could very well be true, but this is not your average team sale. We're talking about the team that's had the lowest combined average between team revenues and team profits.

 

I really don't think that it's going to be as simple as you say.

 

Read this, then tell me if you feel the same;

 

http://espn.go.com/blog/buffalo-bills/post/_/id/9827/jerry-jones-signals-mixed-on-bills-future

[Mr. WEO]

It may dwarf the NBA in some senses, but in terms of ticket revenue the NBA dwarfs the NFL's.

 

Average per-game attendance for an NBA game has remained relatively steady at over 17,000 over the last ten years.

 

The average NFL attendance averages around 65,000 annually. That's 520,000 average per team. Ticket prices are comparable.

 

41 NBA home games at 17K apiece is 697,000.

 

The difference is that NFL teams can run essentially on the shared money from TV alone. Not so in the NBA.

[Kirby Jackson]

 

 

So Golisano with that con man Congel is "already approved", but Trump is a more shaky approval?

 

What's your source?

I can't give that but there are dozens of people on here that can vouch for my intel.

 

 

 

Could very well be true, but this is not your average team sale. We're talking about the team that's had the lowest combined average between team revenues and team profits.

 

I really don't think that it's going to be as simple as you say.

 

Read this, then tell me if you feel the same;

 

http://espn.go.com/blog/buffalo-bills/post/_/id/9827/jerry-jones-signals-mixed-on-bills-future

I hear you but feel that I know a lot more about team sales than the people at ESPN. I have worked on two NBA sales at an executive level. There are certainly owners that will prefer Toronto but it isn't up to them. Edited May 31, 2014 by Kirby Jackson

[PS 56]

At $2 Billion its about buying a toy to play with, not getting a return on the investment.

[Deranged Rhino]

 

 

Ralph Wilson's fortune was based on the value of the Bills.

 

Fox is not buying the broadcast right for the Clippers for "billions".

You're dead wrong on the last point. The Clipper deal is up in a year and fox will absolutely shell out in the billions for the rights. That's why 2 billion wasn't a reach despite what some on here contend. The dodgers just got a 7 billion dollar tv deal when no one thought they would get anything close to that. They won't get the same deal the dodgers got, but they will come close to the sale price when that dust settles. Especially if they make the playoffs next year again.

Edited May 31, 2014 by GreggyT

[K-9]

You're dead wrong on the last point. The Clipper deal is up in a year and fox will absolutely shell out in the billions for the rights. That's why 2 billion wasn't a reach despite what some on here contend. The dodgers just got a 7 billion dollar tv deal when no one thought they would get anything close to that. They won't get the same deal the dodgers got, but they will come close to the sale price when that dust settles. Especially if they make the playoffs next year again.

 

I agree with this. As mentioned above, the Lakers are getting $4b over 20 which can go up to $5b. No NFL team comes close to that figure in terms of broadcast revenues. Even if the Clippers get half that, and I think they'll get more, that's a huge contributor to their valuation and that was predicted by Forbes as well.

 

GO BILLS!!!

[Wayne Cubed]

I agree with this. As mentioned above, the Lakers are getting $4b over 20 which can go up to $5b. No NFL team comes close to that figure in terms of broadcast revenues. Even if the Clippers get half that, and I think they'll get more, that's a huge contributor to their valuation and that was predicted by Forbes as well.

 

GO BILLS!!!

 

I just don't see them getting that much in TV revenue. The Lakers, when they aren't horrible, were averaging about 300,000 viewers pure game. Last season, when they sucked, that dipped down to 199,000 per game average. The Dodgers average about 300,000 as well and hit peaks of 600,000 on some games.

 

For all the surge in popularity, the Clippers hit about 100,000 per game last season. About a 1/3 of the viewers.

 

The fact that the Lakers viewership went down 49% in one season and that the Dodgers are off to a crappy viewership start this year (37,000 avg) because they can't settle on a price cost with TWC, I think the TV deals in LA may cool off a bit.

 

http://www.sportsbusinessdaily.com/Daily/Issues/2014/04/04/Media/Dodgers.aspx

 

They won't get half, they might get a 1/3 of that deal if Ballmer can work some magic AND the Clippers can remain relevant.

[Deranged Rhino]

 

 

I just don't see them getting that much in TV revenue. The Lakers, when they aren't horrible, were averaging about 300,000 viewers pure game. Last season, when they sucked, that dipped down to 199,000 per game average. The Dodgers average about 300,000 as well and hit peaks of 600,000 on some games.

 

For all the surge in popularity, the Clippers hit about 100,000 per game last season. About a 1/3 of the viewers.

 

The fact that the Lakers viewership went down 49% in one season and that the Dodgers are off to a crappy viewership start this year (37,000 avg) because they can't settle on a price cost with TWC, I think the TV deals in LA may cool off a bit.

 

http://www.sportsbusinessdaily.com/Daily/Issues/2014/04/04/Media/Dodgers.aspx

 

They won't get half, they might get a 1/3 of that deal if Ballmer can work some magic AND the Clippers can remain relevant.

 

What you might be overlooking is that the deals for the dodgers and lakers aren't just for broadcasting games, they are for building entire networks around the team like the YES network. That's why the price tags for these deals are in the billions, they build year long scheduling and programming, not just the 82 games a year. And the numbers for the Lakers network were steady despite the dip in actual game viewership. Everyone I have talked to who is involved in these sorts of deals keep repeating the money will be stupid money for the new clips deal. It's part of the reason Shelly Sterling was trying to hold on to her ownership stake.

 

If the Clips move to the Honda Center and the OC in general, their market value will only go up. They won't get the Dodger deal, they wont get 2b but it'll be right up against that number when it's done.

Edited May 31, 2014 by GreggyT

[Wayne Cubed]

What you might be overlooking is that the deals for the dodgers and lakers aren't just for broadcasting games, they are for building entire networks around the team like the YES network. That's why the price tags for these deals are in the billions, they build year long scheduling and programming, not just the 82 games a year. And the numbers for the Lakers network were steady despite the dip in actual game viewership. Everyone I have talked to who is involved in these sorts of deals keep repeating the money will be stupid money for the new clips deal. It's part of the reason Shelly Sterling was trying to hold on to her ownership stake.

 

If the Clips move to the Honda Center and the OC in general, their market value will only go up. They won't get the Dodger deal, they wont get 2b but it'll be right up against that number when it's done.

 

I don't see it being stupid money, they'll get over a billion in total, but not billions.

 

They currently get $20 million per game from Fox. Lakers currently get about $200 million with their new deal. Figure the Clippers have a 1/3 of the viewership, which they do, and that put's them probably between $60-$80 a game over 20-25 years for a new deal with Fox. Just over a billion on the low end.

 

EDIT: As far as moving to the Honda Center, they are locked into the Staple Center until 2023/24 season.

Edited May 31, 2014 by Wayne Cubed

[K-9]

I just don't see them getting that much in TV revenue. The Lakers, when they aren't horrible, were averaging about 300,000 viewers pure game. Last season, when they sucked, that dipped down to 199,000 per game average. The Dodgers average about 300,000 as well and hit peaks of 600,000 on some games.

 

For all the surge in popularity, the Clippers hit about 100,000 per game last season. About a 1/3 of the viewers.

 

The fact that the Lakers viewership went down 49% in one season and that the Dodgers are off to a crappy viewership start this year (37,000 avg) because they can't settle on a price cost with TWC, I think the TV deals in LA may cool off a bit.

 

http://www.sportsbus...ia/Dodgers.aspx

 

They won't get half, they might get a 1/3 of that deal if Ballmer can work some magic AND the Clippers can remain relevant.

 

That's what makes these estimates so interesting. In spite of the dip in ratings, Forbes and others forecast a windfall local TV deal for the Clippers. Broadcast fees for sporting events are about much more than sheer ratings. Indeed, they've been a loss leader for the networks that broadcast them, but there is still a line of advertisers clamoring to get spots during those telecasts. This leads to other ad revenues for other televised shows. Additionally, the NBA is about to experience an explosion in broadcast revenues worldwide and I think the Clippers are gonna be in the right spot at the right time. It's certainly easy to understand why Forbes and others thought the potential TV deal would positively impact the valuation of the Clippers.

 

It's a moot point though, I think. Ballmer didn't buy in to make a profit. He overpaid on purpose to secure his bid just to get in the club. Still, over the next 20 years, the local TV deal to be struck will pay back his initial investment, imo.

 

GO BILLS!!!

[Mr. WEO]

You're dead wrong on the last point. The Clipper deal is up in a year and fox will absolutely shell out in the billions for the rights. That's why 2 billion wasn't a reach despite what some on here contend. The dodgers just got a 7 billion dollar tv deal when no one thought they would get anything close to that. They won't get the same deal the dodgers got, but they will come close to the sale price when that dust settles. Especially if they make the playoffs next year again.

 

Everyone on the planet knew the value of the Dodgers before that sale rested almost completely in the TV deal and the property that came with the team. So it was hardly a surprise that the group that bought it paid 2 billion.

 

There is no 7 billion contract awaiting the Clippers to justify the same 2 billion price tag. They are the worst team in the league, historically. Their only 2 decent players will be long gone before any new TV contract is even half over.

 

Fox is a business, not a billionaire playing with the billions he hardly earned. They won't recover billions in ad sales broadcasting Clippers games in a a Lakers town. They know no one else will be bidding multiple billions for the (essentially) crappy Clippers. Let's face it, if not for Sterling, the Clips would have been completely unforgettable this year, despite their "franchise record" 57 wins.

[Rockinon]

There is a certain Google executive who won't want to be outdone by this former Microsoft exec. I wonder if he is serious about buying the Bills.

[yungmack]

All this talk about the money aspects of the Clippers deal misses the point entirely. Ballmer isn't making an investment with a CPA's focus on the bottom line, he's buying a toy. If he's worth $20 billion, then if he did nothing else but collect the dividends, he'd re-coup the Clippers cost in about 3 years without a single penny from TV, tickets or any other Clippers-related income. It's not much different than the vast sums of money Larry Ellison spends on his sailboats and America's Cup pursuits. Having been aced out on at least two other NBA purchases, Ballmer apparently was so intent on not having that happen again that he just raised the bid to astronomical levels. It is being reported that Mrs. Sterling, the trust fund and the NBA didn't even bother contacting the other bidders to see if they raise it.

 

From my perspective, this is not good news for Buffalo. What Ballmer has done, and what the huge coverage he's getting for having done it, is doing is waking up a lot of very wealthy people who can't seem to help getting themselves into dick-measuring contests, particularly among the high-tech crowd. There are so few franchises available in the NFL (currently, only the Bills), and the level of perceived prestige that comes with owning one, particularly among certain segments of the nouveau riche, is in my opinion guaranteed to bring several super-rich guys out of the woods and into Mrs. Wilson's office. The price won't matter; it all will come down to bragging rights and being one-up on their buddies. What's cooler than an NBA franchise? One in the NFL. I now can imagine the price for the Bills shooting right through that $2 billion Clipper price. And every other owner in the league is hoping that happens, because that would immensely boost the value of their franchises.

 

Hang on to your testicles, 'cause I think it's going to get real crazy real fast.

[Deranged Rhino]

I don't see it being stupid money, they'll get over a billion in total, but not billions.

 

They currently get $20 million per game from Fox. Lakers currently get about $200 million with their new deal. Figure the Clippers have a 1/3 of the viewership, which they do, and that put's them probably between $60-$80 a game over 20-25 years for a new deal with Fox. Just over a billion on the low end.

 

EDIT: As far as moving to the Honda Center, they are locked into the Staple Center until 2023/24 season.

 

I don't think they'll crack 2 billion either, but they'll be well over 1 at a minimum, so we're on the same page. The lease with Staples has a very reasonable buy-out clause. They can move to Anaheim tomorrow if they wanted from what I hear -- but I don't really think they would.

 

They should though... they'd have a better chance of growing their market faster that way. Right now they have to put Clipper color balloons over the Laker statues out front. It's embarrassing.

 

I now can imagine the price for the Bills shooting right through that $2 billion Clipper price. And every other owner in the league is hoping that happens, because that would immensely boost the value of their franchises.

 

Hang on to your testicles, 'cause I think it's going to get real crazy real fast.

 

Yup. I don't think they'll go for over 2, (I am thinking over 1.5 though) but I wouldn't be surprised if they do now. Every owner in every league just saw their value go up -- Donald Sterling did them a solid on his way out the door.

 

Everyone on the planet knew the value of the Dodgers before that sale rested almost completely in the TV deal and the property that came with the team.

 

So it was hardly a surprise that the group that bought it paid 2 billion.

 

Not true. The Guggenheim group got blasted locally here in LA for making a "ridiculous" bid because everyone at that time assumed the TV number to be closer to the YES deal which was well under 1 billion (it was 36% stake in ownership and something like 350 million, I forget the actual figure). In fact, they sound like the people here saying Ballmer over paid -- but like the Guggenheim group he didn't. Time will tell of course.

 

Only in hindsight does "everyone on the planet" know that the Dodgers were going to get seven BILLION for their TV deal. It blew every expectation and prediction away and the Guggenheim group and Magic got to do a nice "we're the smartest guys in the room" victory lap for most of last season because of it.

 

There is no 7 billion contract awaiting the Clippers to justify the same 2 billion price tag. They are the worst team in the league, historically. Their only 2 decent players will be long gone before any new TV contract is even half over.

 

Fox is a business, not a billionaire playing with the billions he hardly earned. They won't recover billions in ad sales broadcasting Clippers games in a a Lakers town. They know no one else will be bidding multiple billions for the (essentially) crappy Clippers. Let's face it, if not for Sterling, the Clips would have been completely unforgettable this year, despite their "franchise record" 57 wins.

 

The bitterness runs deep within you. Wow. But I guess we'll see.