Aug. 19 (Bloomberg) -- Steve Ballmer said he considers the National Basketball Association to be “an appreciating asset” and has no qualms about buying the Los Angeles Clippers for $2 billion, almost four times the previous record for a NBA team.
“I wouldn’t have paid it if I didn’t like the deal,” Ballmer, a former Microsoft Corp. chief executive officer, said in a Bloomberg Television interview. “This is exciting to me. The brand is tremendous and the opportunity is fantastic. There’s little chance that the NBA goes anything but up.”
Ballmer, 58, completed his purchase of the franchise last week, ending 3 1/2 months of drama that began when audio was posted on the Internet of former Clippers owner Donald Sterling telling a female friend he didn’t want her bringing black people to his team’s games. Sterling, who had purchased the Clippers for $12.5 million in 1981, was fined $2.5 million and banned for life by the NBA.
After a series of legal rulings, Sterling’s wife Shelly sold the team to Ballmer. The price tag eclipsed the $550 million paid for the Milwaukee Bucks this year by Avenue Capital Group LLC co-founder Marc Lasry and Fortress Investment Group LLC co-founder Wes Edens.
“L.A. is a unique market, a phenomenal opportunity,” said Ballmer, who retired from Microsoft in February and announced his departure from the board today. “When you look at tech companies with no earnings, huge valuations and a lot of downside, the Clippers look like a really well-valued team to me. There’s debt companies with market caps of $150 million that don’t make any money. The Clippers do make money.”
Ballmer becomes the richest NBA owner with a net worth of $20.8 billion, according to the Bloomberg Billionaires Index. Portland Trail Blazers owner and Microsoft co-founder Paul Allen is second with a net worth of $16.4 billion.
Ballmer, who previously tried to buy the Sacramento Kings and move them to Seattle, said he’s a basketball fan, not an expert. He’ll ask a lot of questions -- “That’s my nature,” he said -- yet will leave that side of the business to Clippers coach and president of basketball operations Doc Rivers.
“My No. 1 job on the basketball side is to give Doc all the support he needs to get the team to the next level of performance,” Ballmer said. “It got close last year, can do even better next year and my job is to figure out what I can do to support Doc even more. Doc has been clear to me that having stability in the ownership base does make it easier for him to do a lot of things, including recruiting.”
The Clippers, who had a winning record once in their first 21 seasons in Los Angeles, have made three straight playoff appearances and last year had a franchise-best 57-25 record. The Clippers have continued to gain popularity in Los Angeles, where they’ve had a better record the past two seasons than the 16-time NBA champion Lakers.
The Clippers open the 2014-15 regular season on Oct. 30 at home against the Oklahoma City Thunder, the team that ousted them from the postseason in last year’s Western Conference semifinals. After a rally for the team yesterday at the Staples Center, Ballmer said the primary topic he joked about with players and coaches was where he’d sit during games this year.
“I always thought I’d like to sit under the basket,” said Ballmer, noting that it’s Allen’s preference when watching the Trail Blazers play in Portland. “The players and coaches thought that was a weird idea. They think in the middle of the court makes more sense, but we’ll figure it out.”
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