When Steve Ballmer agreed to purchase the Los Angeles Clippers for a reported $US2 billion, many felt he was overpaying for the franchise simply because the team was a toy he wanted and he was willing to pay whatever it took to make that happen.
When comparing the sale price to the team’s revenues and EBITDA (earnings before interest, taxes, depreciation, and amortization), it does appear that Ballmer’s bid was completely out of whack with what others have paid for NBA teams in recent years.
Ballmer addressed this issue on “The Dan Patrick Show” when he was asked by Mike Florio if his purchase of the Clippers is an investment or “a personal thing.” His answer seems to suggest that he is content if the team is not a great financial investment.
“I have a passion for basketball. That’s why I made this investment. I want to run not just an excellent team but an excellent experience and an excellent business. If we run an excellent business we’ll be more excellent as a team, everything will kind of fit together well. I believe this will be a perfectly decent investment. If you were trying to strike it rich you might buy something else. I think most people think I paid certainly a premium price. But I don’t think it is going to be a bad investment. Certainly its got more earnings and its a lot cheaper than a lot of tech stocks you find these days.”
Ballmer went on to explain his love for sports goes way back but that basketball is his favourite.
“I was a football manager and a basketball statistician in college” Ballmer told Florio. “But first love for some reason I would say right now is basketball. Football is close behind. But this was the opportunity that really fired me up and got me going and I am delighted with it.”
Based on Ballmer’s performance at the Clippers’ rally, “fired up” might be an understatement.
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