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.

Report: Kevin McHale also in mix for team president in Orlando

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Cavaliers GM David Griffin — who doesn’t have a contract with the team beyond this year, but who LeBron James has endorsed — is on their radar.

Larry Bird, who is stepping down in Indiana, is a potential target.

You can add Kevin McHale to the list of former NBA executives the Orlando Magic are taking a look at in their search for a new head of basketball operations, reports Sam Amick of the USA Today.

The Orlando Magic have serious interest in Hall of Famer and TNT analyst Kevin McHale for their team president position, according to two people with knowledge of the situation….But McHale, who served as Minnesota Timberwolves vice president of basketball operations from 1995 to 2008 while also serving as the team’s head coach on two occasions, is known to be on the Timberwolves’ short list as well. The Magic would strongly prefer someone who has previously been a general manager for the president position.

But McHale, who served as Minnesota Timberwolves vice president of basketball operations from 1995 to 2008 while also serving as the team’s head coach on two occasions, is known to be on the Timberwolves’ short list as well. The Magic would strongly prefer someone who has previously been a general manager for the president position.

McHale made some franchise-defining moves as the head man in Minnesota — he drafted Kevin Garnett and he brought Flip Saunders into the organization, he brought in Sam Cassell and Latrell Spreewell and that got the Timberwolves to the conference finals in 2004, to use a few examples.

He had his share of mistakes, too. Like drafting Ray Allen then trading him for Stephon Marbury, or drafting Brandon Roy and trading him for Randy Foye.

The Orlando roster has talent on it — Aaron Gordon, Evan Fournier, Nikola Vucevic, maybe Elfrid Payton — and a quality coach in place with Frank Vogel. That said the talent on the roster does not fit and Orlando desperately needed someone willing to shake things up, who wasn’t too invested in “their guys” to realize the roster’s serious shortcomings.

McHale could do that. It looks like we are a month or more from finding out, however, as Griffin isn’t going anywhere until after the Cavaliers season — which likely extends into June. If the Magic are serious about him, this process is going to drag out.

Joel Embiid was hanging out with Philly fans at the NFL Draft

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Joel Embiid is a man of the people.

And last night the people in Philadelphia were all Eagles fans, watching the NFL Draft unfold.

Embiid was out there with them. Literally.

Ben Simmons was there as well with Embiid, according to CSNPhilly.com.

Philadelphia fans can only hope the Eagles draft as well — and have WAY better injury luck — than the Sixers.

Moving to new arena, Detroit Pistons submit bids to host 2020 or 2021 All-Star Game

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DETROIT (AP) — The Detroit Pistons have put in bids to host a future NBA All-Star Game at Little Caesars Arena.

The team says in a release Friday that bids were submitted to the league for 2020 and 2021.

Little Caesars Arena is being built just north of downtown Detroit and is expected to open this year. It also will be home to the NHL’s Detroit Red Wings.

In November, the Pistons announced the team was moving back to Detroit from The Palace of Auburn Hills.

The city of Detroit last hosted the NBA’s All-Star Game in 1959. The 1979 game was played in Pontiac when the Pistons’ home court was the Silverdome.

NBA All-Star events include the All-Star Game, NBA Rising Stars Challenge, a celebrity game, skills competition and fan events.

PBT Extra: Does Larry Bird stepping down change Paul George question in Indiana?

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When the Woj bomb dropped that Larry Bird was stepping down as president of the Indiana Pacers, two questions came to mind. First was, “Is he healthy?” Reportedly he is, this was not a healthy-related decision. Which is great news.

Second, what does that mean for Paul George?

Is Indiana more likely to trade him now? Less?

George speculation has ramped up around the league and — while no doubt new GM Kevin Pritchard will say he would love to keep PG13 when he speaks to the media — there is a sense Bird walking away could be a sign that the Pacers are moving into rebuilding mode. That said, Pritchard is known for driving a hard bargain, he’s not going DeMarcus Cousins trade here.

I talk about all of that and more in this latest PBT Extra.