Are the Clippers really worth $2 billion? Five things that drove up the price.

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Any time you mentioned the Forbes Magazine NBA franchise valuations to some involved with the league, they scoffed at the numbers. They were seen as wildly inaccurate. (We in the media kept using them because outside of the occasional team sale there were no other good measures.)

Forbes estimated earlier this year that the Los Angeles Clippers were worth $575 million.

Thursday Shelly Sterling agreed to sell the Clippers to Steve Ballmer for $2 billion. (Whether that sale holds up legally remains to be seen.)

That sum raised a lot of eyebrows — are the Clippers really worth $2 billion? Everyone’s first reaction is that it seems high (and if the Clips are worth $2 billion, what are the Lakers worth?).

The easy capitalist answer is that a team is worth whatever someone is willing to pay for it. So, yes, that sense the Clippers are worth $2 billion.

But there are a series of factors that drove up the Clippers price to incredible heights.

• The team is in Los Angeles. L.A. is the second biggest media market in the United States with more than 13 million people in the metropolitan area. More importantly than that, the City of Angels has a whole lot of very rich people — Forbes estimates there are 30 billionaires in Los Angeles County alone, there are more than 200,000 millionaires — and those are the people that buy expensive seats near courtside. There are 14 Fortune 500 companies based in Los Angeles and countless more large corporations with offices there — the kind of companies that buy expensive luxury suites to impress clients. The bottom line is if you put a good product on the court you can sell the expensive seats that are the revenue fuel for professional sports teams in this era. Plus the Clippers have a string of 141 consecutive sell outs going. Yes, Los Angeles is a Lakers town first (that’s not changing soon) but there is more than enough market for a second team.

• New television deals are coming up. Right now the Clippers have a local television deal with Fox Sports West that pays them $20 million a season — which is less than teams like the Detroit Pistons and Cleveland Cavaliers make — but that deal is up after the 2016 season. Clippers broadcast rights are going to spark a bidding war as entities like Time Warner Cable are expected to try to poach the team while current rights holder Fox Sports desperately needs to keep the Clippers to have enough good content to justify the two regional sports network channels they have in Los Angeles (Fox Sports West and Fox Sports Prime Ticket). Fox lost the Lakers and Dodgers to gigantic Time Warner deals in recent years, they can’t afford to lose the Clippers, and the Clipper ownership will benefit from that. This isn’t going to be as big as the Lakers deal (Los Angeles is still a Lakers town) but it will be big.

Then there is the fact the NBA is in the process of negotiating a new national television deal that will be much bigger than the current deal (rights for sports broadcasting have been going through the roof in recent years because it’s must-watch programing — people don’t DVR games and fast forward through the commercials). Currently teams get $30 million a season in national television revenue, soon that number is going to make a big leap. It is rumored that as part of the new deal Fox Sports will enter the national broadcast picture (with TNT and ABC/ESPN) and broadcast at least a game a week (likely Saturday night). The national broadcast rights fees are divided up equally among the 30 teams, so a raise in revenue is coming.

• The lockout was good to the owners. Make no mistake about it, the NBA owners won big in the last lockout. (Some may say it wasn’t enough, but did you ever hear of a really rich person who said, “I’m making enough, I should distribute more of this money to my employees.” Exactly.) The players went from getting 57 percent of the league’s “basketball related income” (money from national television deals, merchandise sales, a percentage of ticket and concession revenues) down to 50 percent. That works out to an estimated $280,000 million a season. That’s nearly $10 million a season more per team going to the owners. With the more strict salary cap and other devises put in place, that CBA made the NBA a good investment for the rich, not just a toy.

• NBA franchise values are already skyrocketing. Since the new CBA went into effect and people who could afford it figured out the NBA was a good investment, the value of NBA franchises has gone through the roof. In 2010 (pre-lockout) Joe Lacob and Peter Guber set the record for money spent to buy a franchise at $450 million for the Golden State Warriors. Since then Vivek Ranadivé led a group that paid $534 million to buy the Sacramento Kings (and they are paying more to get a new stadium built). Just weeks ago hedge fund guys Marc Lasry and Wes Edens spent $550 million to buy the small market Milwaukee Bucks (and they are going to have to put up a lot of money for a new arena, too). Prices for NBA franchises have been going through the roof, and now here comes one on the market in one of the nation’s largest cities, and a team that has been run poorly for decades and has room for growth.

• The frenzied bidding process. We love to watch auctions because they are dramatic. People selling things like auctions because buyers get caught up in the competitive, exciting bidding process and spend more than they maybe should on the item up on the block. That would be the case here — this was a rushed, frenzied bidding process. There are a lot of one percenters who want to get into the NBA club and getting a bunch of them to bid against each other in a rushed process is a good way to get someone to overbid.

What exactly was on the table for Bulls in Jimmy Butler trade?

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It’s been the cry since the Bulls’ front office traded Jimmy Butler for Zach LaVine (coming off an ACL surgery), Kris Dunn, and the No. 7 pick (Lauri Markkanen):

Why didn’t the Bulls get more?

I’m in the camp they didn’t get enough, starting with the question why did they give Minnesota the No. 16 pick in the deal? Even if the Bulls keep that pick, it doesn’t feel like they got enough for an All-NBA player, a top-flight wing defender who can also get buckets with the ball in his hands. The Bulls could have been patient and waited out a better offer, one of this quality would always have been on the table.

However, the deals for Butler may not have been as rich as fans assume. Here is part of what ESPN’s Zach Lowe wrote breaking down the trade.

It’s not as if Chicago didn’t canvas the league, either. The Bulls talked to Phoenix about a package centered around Eric Bledsoe and the No. 4 pick, but nothing came close, according to league sources. (Those talks may have been linked at one point to Cleveland’s pursuit of Butler, which apparently fizzled Thursday as Dan Gilbert, the Cavs’ owner, tried to hire a new president of basketball operations on the freaking day of the draft.)

They poked around with Denver, but the Nuggets drew a line at Jamal Murray, sources say. Those teams had to weigh the possibility of Butler bolting in 2019, which cooled the market a bit, sources say.

Boston has danced around Butler for almost a year now, and would not include the No. 3 pick in any package for him as the draft approached, sources say. Other reports suggest they refused to offer next year’s Nets pick, or the Lakers-Kings pick they snagged from Philly in the Markelle Fultz deal.

Boston’s Danny Ainge wanted a deal, a bit of a discount, and the Bulls were not going to give it. Those pick requests are reasonable for a Top 15 player, but Ainge knows he can be patient and the Celtics will still win more than 50 games next season and be a contender in a couple of years. Ainge knows he has a real shot at Gordon Hayward as a free agent this summer. He knows it’s not Butler or bust, so he didn’t go all in. He can afford to be patient right now, but eventually he will have to make a move.

The lack of a better market for Butler speaks to a couple of things. Phoenix, Denver, and other teams are correct to worry about overpaying for a player that could leave in a couple of years. Maybe they can win him over with their culture, maybe a team like Denver becomes very dangerous with Butler in the mix with Nikola Jokic, but is that enough. This is also where the looming shadow of Golden State, the Mount Everest looming over all things in the West, comes into play — how much do teams want to pay to try to contend right now?

Still, the Bulls could have done better. At least know a direction is set, the Bulls are rebuilding. Can Gar/Pax pull that off is another question entirely.

Klay Thompson goes up for 360 dunk in exhibition… and he’s not a dunker (VIDEO)

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Klay Thompson has an amazing skill set — one of the best pure shooters in the league, he can put the ball on the floor and create, and he’s a very good perimeter defender.

He’s not a dunker. Oh, he can dunk, but he’s not the guy you’re inviting to the Dunk Contest.

Case in point, this video out of China where Thompson was part of an exhibition and tried to show off his dunking skills.

Thompson’s shoe sponsor is China-based Anta, which explains why he’s there playing some exhibition ball. In case you missed it, Thompson had a Finals shoe released.

Those are about as good as the 360 dunk.

Sixers will talk contract extension for Joel Embiid this summer, want to lock him up

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Could Joel Embiid be Philadelphia’s Stephen Curry?

No, I don’t mean taking 30-foot bombs that demoralize opponents (although, no doubt Embiid is game for trying it). I mean in having a contract extension off his rookie deal for less than the max, a value contract that allows the Sixers the cap room to secure a title contender around him.

After three seasons in the NBA, Joel Embiid is eligible for a contract extension this summer (one that would be negotiated now but not kick in until the 2018-19 season). Teams lock up their stars at this point, and Embiid is that — he was dominant in the 31 games he played. But it’s 31 games in three seasons, how much do the Sixers want to pay here?

Sixers owner Joshua Harris said extending Embiid is a priority for the team this summer, speaking at a press conference, via the Courier Times.

“Look, I’d just say we want Joel to be on the team for a long time,” Harris said. “We want us all to grow old together. That’s the way I would put it.”

A max contract for Embiid would be five years at about $130 million, an average annual salary of $26 million. Because of his injury history, would he be willing to sign five years at $100 million, maybe with an opt-out after four? That extra cap space may not sound like a lot, it’s not a Curry-level savings, but it would help the Sixers’ team building.

If the two sides can’t reach a deal by Oct. 31 (the deadline), Embiid will play out this season then be a restricted free agent next season. If he stays healthy, he will get a max deal from another team that the Sixers would just match (the Sixers and Embiid could also reach a deal).

The Sixers are not about to let Embiid go, they have their young core they believe they can contend with in a few years. Plus he is a fan favorite. The only question left is cost.

Josh Jackson’s first pitch is… just a bit outside

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Josh Jackson is not going Bo Jackson on us and playing baseball in the offseason.

The highly-rated forward out of Kansas who was the No. 4 pick of the Phoenix Suns was invited to throw out the first pitch before Friday night’s Diamondbacks game.

To quote Bob Uecker, he was just a bit outside. He tried the corner and missed.

Lonzo Ball was able to make his first pitch, ergo, he will turn out to be a much better NBA player. Obviously, these skills correlate.