KCSA PUBLIC RELATIONS, INVESTOR RELATIONS BLOG
Posted by Jared Stone on June 5th, 2014
Being inspired by Vincent Piazza’s blog on realizing intrinsic value in basketball, I felt the time was right to speak about the latest development with the LA Clippers. To preface, I am not a huge sports follower, but I have always been intrigued by the business itself. When I heard that Steve Ballmer, former CEO of Microsoft decided to offer $2 billion dollars for the Clippers, I was dumbfounded at first because it would be considered the most valuable basketball team, and the sixth most valuable sports team in the world according to Forbes’ 2013 rankings. But when reflecting on it, I thought it could be positive for both Ballmer and the city of Los Angeles.
Ballmer is a smart guy – graduate of Harvard with degrees in mathematics and economics, worked his way to the top of Microsoft, and managed the company for about 14 years. Being at the top offers the ability of motivating others to a greater end goal. At Microsoft, that is delivering superior products while increasing shareholder value. Under Ballmer, Microsoft wasn’t known to be innovative or disruptive to the industry. In fact, he was slow to recognize how cloud computing could revolutionize how business is done. However, with Ballmer at the wheel, he was able to triple the company’s revenue and expand profits dramatically. Clearly those degrees came in handy.
I look at the Clippers, and I see an opportunity.
Ballmer is a charismatic leader and extremely animated. Have you ever watched a keynote presentation he led? Please watch this. This can be incredible for a locker room! Just watching this gets me pumped (and on the floor laughing). I can’t imagine how this feels in person! Although this is only one example, it is that type of passion you need for a professional sports franchise. It is this type of passion that can motivate others to achieve success. And while the Clippers have had recent success, they need to sustain it. Ballmer may be a good influence, as I see him taking different approach to leadership by supporting his managers versus dictating to them. An opportunity that is different than his style at Microsoft, and a chapter from the book of his Microsoft buddy, Paul Allen, the owner of the Seattle Seahawks.
Ballmer is a huge fan of basketball and has wanted to be involved in ownership for a while. Last year, he was part of an investment group that tried to buy the Sacramento Kings. The deal did not go through because the NBA Owners Association wanted the team to stay in Sacramento, and not move to Seattle like the investors wanted. It would have been successful if the group received a 75% vote in support. After making his offer he said, “I love basketball. And I intend to do everything in my power to ensure that the Clippers continue to win — and win big — in Los Angeles.” This is wonderful for Los Angeles as he has no plans to move the team and wants to build on the success the management and players have brought to the city.
So while this may be positive for Ballmer in the sense that he can finally say he owns an NBA team, and that Los Angeles will not be losing a sports team, in the end, this is a business transaction. I can only hope that the $2 billion spent on this team is worth it.