By KEN BELSON and RICHARD SANDOMIRMAY 30, 2014 Men with vast fortunes who have bought professional teams as toys are not uncomm on. Whether they considered the franchises sound investments is almost beside th e point. The latest major player in the business is Steve Ballmer, the former Microsoft c hief executive, who agreed on Thursday to pay $2 billion for the Los Angeles Cli ppers nearly four times as much as the previous record price for an N.B.A. franc hise. On Friday, the league said that in light of the sale, it would withdraw its pend ing charges against the current owner, Donald Sterling. Could the team possibly be worth that much, fans immediately wondered or is Mr. Ballmer, whose net worth is estimated at $19 billion, simply indulgent? In time, the $2 billion bid that seems shocking today may be viewed as a relativ e bargain. Continue reading the main story RELATED COVERAGE On Friday, Donald Sterling sued the league for $1 billion, saying it had violate d antitrust laws and his constitutional rights. Legal experts said it was unlike ly he would win.With Sale Pending, Vote on Sterling Is CanceledMAY 30, 2014 Donald Sterling in 1981, the year he bought the Clippers.Rich and Richer: Sterli ng to Reap 15,900 Percent Return on SaleMAY 30, 2014 Steve Ballmer greeting the ex-N.B.A. star Bill Russell at a college game in Janu ary. Ballmer is estimated to be worth $20 billion.Steve Ballmer Said to Sign $2 Billion Deal to Buy ClippersMAY 30, 2014 It seems that Donald Sterling may want to sell, but he is also vowing to battle the accusations against him to the bloody end, his lawyer said.Clippers Draw Some High-Profile Offers MAY 28, 2014 There was a time when $10 million was considered an outrageous sum to buy the Ya nkees. It was 1973, the Bronx was crumbling, and George Steinbrenners purchase (f or about $50 million in todays dollars) made jaws drop. Jerry Joness $140 million outlay for the Dallas Cowboys in 1989 had the same effect, as did the 2012 sale of the Los Angeles Dodgers for $2.15 billion. Photo T-shirts on seats at Staples Center in Los Angeles before an opening-round playo ff game between the Clippers and the Warriors. Credit Mark J. Terrill/Associated Press Mr. Ballmer, like Mr. Steinbrenner, Mr. Jones and others before him, may be bett ing that sports will continue to be a growth industry, bringing expanding revenu e from broadcast rights, ticket sales and sponsorship deals. Everyone looking at this is looking at the future of the N.B.A. and the upcoming TV deals, said Sal Galatioto, the president of Galatioto Sports Partners. He adde d, It does significantly boost the price of large-market N.B.A. teams, and all N. B.A. teams. The Clippers are the 13th-most valuable franchise in the N.B.A., according to ca lculations by Forbes, which estimated that the team generated $128 million in re venue last year. Nearly 40 percent of that came from fees for television rights the driving force for major sports deals these days. The deal for the Dodgers, for example, was largely predicated on the prospect th at the new owners investors from Guggenheim Partners could set up a local sports network. They did that last year, in an $8 billion, 25-year arrangement with Ti me Warner Cable. The Clippers local cable television contract, for $18 million a year, is nearing renewal, and projections suggest that the team could get as much as $60 million a year. Mr. Ballmer would also benefit from the N.B.A.'s next round of national television deals, which begins in the 2016-17 season. The teams are expected to receive substantially more than the $30 million a year each one currently gets. The Clippers are a scarce asset, another factor that might have enticed Mr. Ball mer. Clubs in big-market cities like New York and Los Angeles, and cornerstone f ranchises like the New England Patriots and the Dallas Cowboys, are in position to generate significantly higher bids because there are so few available. The Clippers are not a cornerstone team, but they are in Los Angeles. And after decades as a doormat, they are on the upswing, with stars like Chris Paul and Bl ake Griffin. Their more glamorous local rivals, the Lakers, are down. Assuming his purchase is approved by the N.B.A., Mr. Ballmer, 58, is likely to e njoy significant personal financial benefits. When an investor purchases a sport s team, he can attribute a large part of the purchase price to the player contra cts he is acquiring. As those contracts expire, their depreciation can offset in come. Continue reading the main storyContinue reading the main story Advertisement
Given how low interest rates are, he could finance part of the purchase of the t eam relatively inexpensively, and he could later bring in minority shareholders to recoup some of his purchase. Continue reading the main story RECENT COMMENTS I Boesky 2 hours ago There's one thing I can't stand, slightly less than "no problem" from a waiter a s the new "you're welcome", and that's a reporter pretending... Byron 2 hours ago Maybe he'll bring them to Seattle ... Ignatius J. Reilly 2 hours ago This is not an investment, in the normal sense, for Ballmer. It is a toy. An exp ensive bottle of wine. A supercar. It gives his life... SEE ALL COMMENTS WRITE A COMMENT Still, there are no guarantees that the Clippers will make a profit for Mr. Ball mer. Rob Tilliss, who runs Inner Circle Sports, which advised one of the other b idders, said that there were reasons to be optimistic about the Clippers financia l outlook but that the $2 billion offer was based on wishful assumptions that wo uld all have to come true for Mr. Ballmer to get his money back. If you believe in the growth of the league, you believe in the TV rights renewals and you want to be the big guy in L.A., it makes sense, Mr. Tilliss said. But I c ant make the economic argument for you. The bid was three and a half times the amount the team was recently valued at by Forbes. It was also 20 percent more than the next closest offer. Some analysts said Mr. Ballmer might have purposely submitted a bid that would far surpass tho se of the other contenders including a group with Oprah Winfrey so he could swif tly end the auction and win the support of Rochelle Sterling, who co-owns the Cl ippers with her husband. Mr. Ballmer took a similar approach when he ran Microsoft, paying what some anal ysts thought were obscene amounts for companies. In 2011, for example, Microsoft paid $8.5 billion for Skype, more than tripling what eBay had paid for the comp any several years earlier. CONTINUE READING THE MAIN STORY 161 COMMENTS The team Mr. Ballmer is hoping to buy has never made it past the second round of the N.B.A. playoffs and does not have its own arena, a significant financial ha ndicap. Mr. Ballmer made one previous attempt at buying a stake in an N.B.A. team. Last year, his groups bid to buy the Sacramento Kings failed; the group had planned to move them to Seattle. Now he stands to play the role of savior and could lobby from within the league to expand to Seattle. This comes on the heels of Ballmer going through a wretched fight for the Kings, and hes leaving Microsoft and wondering about what to do next, said Marc Ganis, wh o advises owners and potential owners. Now hell be a hero for stepping up to take over a franchise that the nation wants taken away from Donald Sterling. He will ride in on his shiny steed. **** Phil Jackson Gives Knicks Carmelo Anthony a Plan C By SCOTT CACCIOLAMAY 30, 2014 Photo Phil Jackson said he gave Carmelo Anthony a notification date to inform the team of his plans this summer. Credit Mark Lennihan/Associated Press Continue reading the main storyShare This Page EMAIL FACEBOOK TWITTER SAVE MORE Continue reading the main story Continue reading the main story ? Top Stories This article and others like it are part of our new subscription. Learn More Continue reading the main story GREENBURGH, N.Y. With the embers still smoldering from his failed pursuit of Ste ve Kerr, Phil Jackson has managed to remain in the hunt for another elusive targ et: Carmelo Anthony. Anthony has maintained for months that he intends to opt out of his contract wit h the Knicks this summer so he can explore his options as a free agent. But Jack son, the teams new president, said he recently presented Anthony with another pat h: Why not stick it out for one more season and see how it goes? In other words, opt in rather than opt out. I just offered that as, This gives you an opportunity to see how this is going to change,'? Jackson said Friday morning in a 40-minute question-and-answer session with several reporters who cover the team on a regular basis. But thats his option , thats what hes earned, and thats part of his contractual agreement. He has that r ight. Continue reading the main story RELATED COVERAGE Phil Jackson, left, as the coach of the Lakers and Pat Riley as the coach of the Heat at a game in 2005.On Pro Basketball: Knicks New President Could Look to Pat Rileys Success With the HeatMAY 28, 2014 It was Jacksons 74th day on the job. It is his first time as a team executive aft er a storied career as a coach, and he is still charting a course through uncert ain waters. He remains without a coach after being spurned by Kerr, who opted to join the Golden State Warriors. In fact, Jackson said, he had received what he described as a commitment from Kerr and then the Warriors came calling. So I had to kind of release him to actually go to this job and say, You have to do whats right for yourself,'? said Jackson, adding that he felt the Warriors job ap pealed to Kerr primarily because of his California ties. I understood entirely th e process he was going through to have that job open up. That was something he t hought would be a good fit for him. So thats good. Were happy for him. It was an act of unusual benevolence given the Knicks sizable investment in Jacks on, who said he had interviewed a number of candidates. He indicated that Derek Fisher, a veteran guard with the Oklahoma City Thunder, was on his list, perhaps even at the top. But Jackson said he had not spoken with Fisher, and would not until Fishers playoff run concludes. Id like to have a prior relationship with a coach, so that we know that weve gone t hrough some kinds of issues together, Jackson said, adding, Weve had conflicts, and weve had disagreements, and we know how to work things out. Jackson also said that he had not contacted Brian Shaw, the coach of the Denver Nuggets. Shaw played for and coached under Jackson with the Los Angeles Lakers, but he is under contract and has pledged to stay with Denver. Besides, Jackson s aid, he would be reluctant to deal with the Nuggets after the Knicks sent them f our players and three draft picks as part of the 2011 trade for Anthony. Denver has everything that we owned for the last few years, Jackson said, deadpan, so theres nothing else I want to give them. Jackson, who has had health issues in recent years, was again asked if he had co mpletely ruled out coaching. He prefaced his response with a long pause. Im going to be interested in coaching, he said. Its whether I can do it or not, and I have to understand my physical capabilities. And at this point, I dont see how u nless the Lord heals me in the next week or two, I wouldnt see myself being physi cally prepared to take on the grind of coaching a basketball team right now. Jackson said he had kept in regular contact with Anthony, who has one year and $ 23.5 million remaining on his current contract but can opt out through a player option. While Jackson said he was not losing any sleep over the real possibility t hat Anthony would enter free agency, he did acknowledge that it was a concern. We recognize his talent and his skill is the kind of skill and talent that gets y ou through playoff games where things get dicey, Jackson said. Hes one of the few p layers who can do that. Jackson said it could help the team negotiate salary-cap limitations if Anthony were to remain in his current contract for another season. We have an opportunity in the next couple of years to get back in the hunt for fr ee agents that are headline players, Jackson said. Can we get two instead of just one? Yeah, thats a possibility. The reality of how to do that involves Carmelos co mpliance. A version of this article appears in print on May 31, 2014, on page D3 of the Ne w York edition with the headline: Jackson Is Still Seeking a Coach for the Knick s and a Way to Retain Anthony.
