With the soon-to-be-finalized sale of the Clippers to Steve Ballmer for a whooping $2.0 Billion. Yes, that is Billion, with a B. The Clippers just demolished the record for highest price fetched for an NBA team. Recently, the Milwaukee Bucks sold for a then record $550 million, which at the time seemed insane. The Warriors had just been sold for $450 million in 2010, a very reasonable price considering the team will be moving from Oakland to San Francisco. But Milwaukee? One of the most barren NBA markets?
And then Donald Sterling went off the deep end. The sharks started smelling blood, and rumors were being thrown left and right about over $1 billion bids. Oprah Winfrey, Larry Ellison, David Geffen, Magic Johnson, and the Guggenheim Group were all names thrown out with some real clout to back up that billion dollar price tag. Then the bids came in and most were said to be in the $1.2-1.6 billion range. But then came Ballmer’s bid. The proverbial trump card. A man who was personally worth over $20 billion just committed 10% of his net worth to purchase an NBA franchise, that doesn’t own its own arena.
I bring this up to wonder, what would the Lakers sell for? Its been a popular topic across the internet, wondering how much the Celtics, Lakers, Bulls and Knicks could possibly sell for.
Let’s actually take a look at some of the math:
According to Forbes, the Lakers are the 2nd most valuable franchise in the NBA in 2014, trailing the Knicks, at $1.35 billion. The Los Angeles Clippers were valuated at $575 million, and just sold for almost quadruple that price. The Lakers also armed with a television deal with Time Warner Cable worth at minimum $3 billion and up to $5 billion over a 20-year period. The Lakers are also one of the largest national draws and have the largest fan base of any NBA team. The Lakers missed the playoffs for only the 2nd time in my life this year.
At minimum the Lakers would be sold for $2.5 billion. If the Buss family somehow came upon hard times and badly needed money, a quick sale to get most of what they would have gotten from the TV deal is expected. If the Buss family was in no financial distress, but felt it was the right time to sell, this team would be in the $3 billion range. Keep in mind, people with $3 billion to spend on basketball teams don’t just grow on trees. Aside from the Clippers sale, every franchise bought it generally bought through an ownership group who pools funds together. If $2 billion was only approached by one man, finding someone with $3 billion might be tough.
With the way the CBA is currently set up, NBA owner’s hold almost zero risk in owning an NBA franchise. You heard that correctly, ALMOST ZERO RISK. The way revenue sharing is set up, teams like the Grizzlies and Pacers, who have been a playoff teams for the past half decade, received $15 million in revenue sharing. Owning an NBA team like the Lakers? It would be foolish NOT to buy them.