Ballmer: 2 Billion for Clippers

[Wayne Cubed]

 

 

The Clippers bid wasn't an overbid, it really wasn't. The Clippers are due to get a new TV deal / network from Fox in '16. People thought the Gugenheim group overbid for the Dodgers too before Fox came in with a 7 billion dollar TV deal. The Clips won't get 7 billion for their TV deal, but they will get a windfall. Ballmer looked at it from a long term perspective and made the bid he needed to in order to keep Ellison and company away.

 

The NFL has shared TV revenue and market value is less significant for the valuation of a franchise especially in light of the newest CBA. The NFL is printing money, far more than the NBA -- even a Los Angeles NBA team -- if the Clips sold for over double their valuation (even if they went with the lower bid from Ellison's group it would have still been over double their valuation), the Bills will double their own valuation which was 870 last I checked.

 

We will see how it impacts the Bills but you're dreaming if you don't think it'll play a role. I think you're going to be very surprised to see the Bills going for over 1.5 billion.

 

Mark it down.

 

I hear what you are saying, but your doing a better job of explaining why the Clippers bid was so high as opposed to how it'll effect the Bills. NBA teams can secure their own local TV deals like you said, NFL teams can't. That makes the Clippers worth a lot of money when that deal happens. Ballmer isn't going to make any money off this deal, he paid way too much and the sale didn't even include a stadium/venue.

 

But that doesn't explain how that would effect the Bills price. The Bills can't bargain with local TV, that price is set. So their isn't some other money making scheme out their for the Bills besides a new stadium which will cost a new owner a hefty chunk of money on top of the sale price.

 

The value of an NFL team has gone up since the Browns sale, so I'm saying between $1.1 and $1.2 billion.

 

We shall see.

[bbb]

Yes, and no. He is 81 and sick. You can't take it with you. His family or whoever he is leaving it to will be rewarded.

 

 

Mike Rodak ‏@mikerodak 19m

Erie County Executive Mark Poloncarz tells @NewsRadio930 that the Clippers’ $2B sale “could boost the price of the Bills now."

 

Mike Rodak ‏@mikerodak 11m

Of course, the Clippers’ record sale speaks to the value of the L.A. market. Ballmer’s purchase a double-edged sword for Bills & fans.

 

 

Doesn't double edged sword mean it's half good. What is good at all about this for Bills fans?

[Deranged Rhino]

We'll see. This is the same guy that spent $7B on aQuantive (and subsequently took a $7B charge on earnings a few years ago as a direct result of this purchase) and wanted to buy Yahoo for $39B back in 2009 (current market cap = $34B). There were a ton of other deals that he made that were duds - I could go through the list but each one was a dud.

 

He's a nice guy - he works out at the pro club in Bellevue with the regular joe-type employees and he ate in the cafe with us... but a good businessman, he is not.

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.

 

 

Doesn't double edged sword mean it's half good. What is good at all about this for Bills fans?

 

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

[bbb]

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

 

How do you figure?

[Wayne Cubed]

 

But this deal for the Clippers is actually the going market rate these days...

 

Except it's not the going rate, I just pointed you to the article about the Milwaukee Bucks who were just sold 3 weeks ago. $550 million. Valued around $400 before the sale. Ballmer even bid on them and it wasn't for $2 billion.

 

The value of the NBA brand and owning a team didn't just suddenly sky rocket in 3 weeks.

[Deranged Rhino]

I hear what you are saying, but your doing a better job of explaining why the Clippers bid was so high as opposed to how it'll effect the Bills. NBA teams can secure their own local TV deals like you said, NFL teams can't. That makes the Clippers worth a lot of money when that deal happens. Ballmer isn't going to make any money off this deal, he paid way too much and the sale didn't even include a stadium/venue.

 

But that doesn't explain how that would effect the Bills price. The Bills can't bargain with local TV, that price is set. So their isn't some other money making scheme out their for the Bills besides a new stadium which will cost a new owner a hefty chunk of money on top of the sale price.

 

The value of an NFL team has gone up since the Browns sale, so I'm saying between $1.1 and $1.2 billion.

 

We shall see.

 

Again, no one thought the Guggenheim group who bought the Dodgers for over 2 billion would ever recoup their cash -- yet they ended up TRIPLING it with their TV deal less than 8 months later. The Clippers are not the Dodgers. They won't get a 7 Billion dollar TV deal. But they will get a deal worth between 1 to 2 billion according to what people who do that kind of business tell me.

 

You're right that TV deals are shared in the NFL -- which is why I believe the Bills will benefit from this sale. The market size doesn't matter in the NFL because of the way the TV deal revenues are shared. The $27 billion dollar TV deal the NFL signed in 2011 is shared and will only increase when it's renewed in 2022 -- which seems like a long ways off but is less than 8 years away. The price tag for the TV deal increased %63 percent, if it jumps even half that in the next go around you're looking at close to 50 BILLION dollars to be cut up between 30 owners.

 

It's about the future worth, and the NFL's brand is inherently more valuable than the NBA. If the NBA just set the mark at 2 billion, the Bills are going to go for 1.5. Again, I'm guessing, but it seems to be a good guess.

 

Except it's not the going rate, I just pointed you to the article about the Milwaukee Bucks who were just sold 3 weeks ago. $550 million. Valued around $400 before the sale. Ballmer even bid on them and it wasn't for $2 billion.

 

The value of the NBA brand and owning a team didn't just suddenly sky rocket in 3 weeks.

 

Every team in the NBA just saw their worth skyrocket because of this deal. The Bucks even went up. This has an impact on the valuation of the entire league, not just one team. My argument, which is not original, is that it affects not only the NBA but the entire sports world in terms of valuation.

[SDS]

How do you figure?

 

If I had that many billions, I wouldn't really care that much about what I paid. If it was 75% of my worth? Sure. 10%? The power of being an owner is worth it. So, if the money doesn't matter - why not keep it in Buffalo?

[Deranged Rhino]

How do you figure?

 

If the buy out clause is accurate, adding 400 million onto a 1.5 to 1.75 billion dollar price tag to move the franchise to LA (or any big market) won't net the new owners enough cash to make it worth it UNLESS the owner is dead set on moving the team from the start. Especially since the TV revenues are shared and aren't based on your market.

 

Meaning, the new owner can't go to LA and sell the TV rights exclusively (which is the only way to make the move to LA profitable if the price tag is that steep) and would still need to build a new stadium in either market. There's no benefit to moving to LA under the current TV deal.

[Wayne Cubed]

 

 

Again, no one thought the Guggenheim group who bought the Dodgers for over 2 billion would ever recoup their cash -- yet they ended up TRIPLING it with their TV deal less than 8 months later. The Clippers are not the Dodgers. They won't get a 7 Billion dollar TV deal. But they will get a deal worth between 1 to 2 billion according to what people who do that kind of business tell me.

 

You're right that TV deals are shared in the NFL -- which is why I believe the Bills will benefit from this sale. The market size doesn't matter in the NFL because of the way the TV deal revenues are shared. The $27 billion dollar TV deal the NFL signed in 2011 is shared and will only increase when it's renewed in 2022 -- which seems like a long ways off but is less than 8 years away. The price tag for the TV deal increased %63 percent, if it jumps even half that in the next go around you're looking at close to 50 BILLION dollars to be cut up between 30 owners.

 

It's about the future worth, and the NFL's brand is inherently more valuable than the NBA. If the NBA just set the mark at 2 billion, the Bills are going to go for 1.5. Again, I'm guessing, but it seems to be a good guess.

 

 

 

Every team in the NBA just saw their worth skyrocket because of this deal. The Bucks even went up. This has an impact on the valuation of the entire league, not just one team. My argument, which is not original, is that it affects not only the NBA but the entire sports world in terms of valuation.

 

So you think somehow in 3 weeks time Ballmer realized that NBA/sports teams values were sky rocketing and he should outbid everyone else by $400 million on the Clippers? And that his purchase will somehow change the value of an NFL team?

[PurpleHayes42]

Baller reportedly has made several bids on other NBA teams that had been up for sale and has lost the bid. I see this 2 billion bid as someone who wants to be the winning bid without the NBA even excepting any other bids. The bills will be extremely different because the bidding process will be open and completed through a step by step process and not sold by the league itself and in a hurry.

[Wayne Cubed]

Baller reportedly has made several bids on other NBA teams that had been up for sale and has lost the bid. I see this 2 billion bid as someone who wants to be the winning bid without the NBA even excepting any other bids. The bills will be extremely different because the bidding process will be open and completed through a step by step process and not sold by the league itself and in a hurry.

 

That's the way I see it too.

[Deranged Rhino]

So you think somehow in 3 weeks time Ballmer realized that NBA/sports teams values were sky rocketing and he should outbid everyone else by $400 million on the Clippers? And that his purchase will somehow change the value of an NFL team?

No. I think everyone, especially the folks at Forbes who valuate all the franchises each year are woefully out of touch with the true value of sports franchises today. I think he saw the value of an expiring NBA TV deal for a Los Angeles based franchise and made his bid with that in mind knowing he will recoup his initial investment, if not surpass it, with the new deal in '16.

 

I think the unintended consequence of such a move raises the value of every franchise, not just the NFL or NBA. But all franchises. That the monster of professional sports, the NFL, should see their values increase because of this is not rocket science, it's capitalism 101.

 

Baller reportedly has made several bids on other NBA teams that had been up for sale and has lost the bid. I see this 2 billion bid as someone who wants to be the winning bid without the NBA even excepting any other bids. The bills will be extremely different because the bidding process will be open and completed through a step by step process and not sold by the league itself and in a hurry.

 

His former bids have little to do with the 2 billion dollar price tag for the Clips. It was going to take a bid like that to get this done and he'll get his money back and then some when they sign the new TV deal.

 

The bidding process for the Bills will be affected by this sale because people know the NFL overall is the more valuable brand. If the NBA can get 2 billion for a second tier franchise -- and that's being generous with my assessment of the Clipper history and value within the league -- the Bills, a second tier franchise in the NFL can at least double their estimated 870 million dollar value.

[BillnutinHouston]

Actually, they are always the same thing.

 

As has been explained many times in other threads, there is no ability to break the lease prior to year 7, when there is a relatively cheap termination option of around $28 million.

Thank you. I'm amazed at how many people need to be reminded of this fact.

 

I still think that Mrs. Wilson's and the niece's appointment to the 4-person trust is significant, and probably indicative of Mr. Wilson's instructions to not necessarily sell to the high bidder. If the high bid was his wishes, he would have kept family away from the decision making so as to protect them from the anger of WNY fans.

[Big Turk]

As Jim Rome would say "That is crazy jack!"

[DallasBillsFan1]

The Clippers are worth $2 Billion and Buffalo Bill only worth $840 Million?

 

Is basketball really that lucrative? More lucrative than a NFL team? I could understand Jacksonville, but Buffalo? I guess it's because its L.A. But it's basketball for gosh sakes ... I mean, who really cares.

[PromoTheRobot]

The Clippers are worth $2 Billion and Buffalo Bill only worth $840 Million?

 

Is basketball really that lucrative? More lucrative than a NFL team? I could understand Jacksonville, but Buffalo? I guess it's because its L.A. But it's basketball for gosh sakes ... I mean, who really cares.

 

You had a guy willing to overpay for that team. Who knows what happens here? I do know the Bills will sell for far more than it's supposed value of $850M.

[Kirby Jackson]

The Clippers are worth $2 Billion and Buffalo Bill only worth $840 Million?

 

Is basketball really that lucrative? More lucrative than a NFL team? I could understand Jacksonville, but Buffalo? I guess it's because its L.A. But it's basketball for gosh sakes ... I mean, who really cares.

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.

[Ronin]

Trump might not be rich enough for the Bills, without some serious help. His NW is "only" ~$4B, and most of it is tied up in real estate.

 

These guys can always leverage their assorted holdings.

 

I will admit, I have been in the "Bills aren't going anywhere camp" for awhile but it is scary to think that someone could just make an offer that no one could refuse and eat the $400 million. Prior to the Clippers' sale I wouldn't have thought it possible but now I'm not so sure. I do happen to think however, that the Wilson family is committed to selling the team to someone with the intent of keeping the Bills in Buffalo regardless.

 

Exactly right.

 

As to the Wilson family, they're going to have to sell to an owner that the other NFL owners, or 24 at least, will allow.

 

As I've said many many times, if they wanted to sell the team to an owner wanting it to stay in WNY, then they'd have had a better shot while Wilson was alive. He carried more clout. None of the other NFL owners are going to respect Mary Wilson at all. Jerry Jones and Kraft are going to have a lot more influence than any of the Wilsons at this point.

Edited May 31, 2014 by TaskersGhost

[Kirby Jackson]

 

 

These guys can always leverage their assorted holdings.

 

 

 

Exactly right.

 

As to the Wilson family, they're going to have to sell to an owner that the other NFL owners, or 24 at least, will allow.

 

As I've said many many times, if they wanted to sell the team to an owner wanting it to stay in WNY, then they'd have had a better shot while Wilson was alive. He carried more clout. None of the other NFL owners are going to respect Mary Wilson at all.

The NFL owners do not get to pick who buys the Bills; they get to confirm them. The 4 person panel will select the new owner. I am told that Golisano (for 1) has already gone through the vetting process and been approved for NFL ownership. Any of the names that have been floated will be approved by the league with the possible exception of Trump (and I think that he would be).

[Ronin]

The NFL owners do not get to pick who buys the Bills; they get to confirm them. The 4 person panel will select the new owner. I am told that Golisano (for 1) has already gone through the vetting process and been approved for NFL ownership. Any of the names that have been floated will be approved by the league with the possible exception of Trump (and I think that he would be).

 

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.

Edited May 31, 2014 by TaskersGhost