--- title: Ballmer Buys L.A. Clippers for $2 Billion, Way More Than Team Is Worth description: A sports economist crunches the numbers on how much the basketball team is worth, and says the former Microsoft CEO has no reason to bet the Los Angeles team will ever be worth $2 billion canonical: https://time.com/2800607/steve-ballmer-los-angeles-clippers-worth/ author: Andrew Zimbalist article:opinion: true article:content_tier: free article:published_time: 2014-05-30T18:59:30.000Z article:modified_time: 2026-04-13T08:54:11.374Z article:section: Ideas og:title: The Clippers Are Worth Nowhere Near What Ballmer Is Paying og:description: A sports economist crunches the numbers on how much the basketball team is worth, and says the former Microsoft CEO has no reason to bet the Los Angeles team will ever be worth $2 billion og:url: https://time.com/2800607/steve-ballmer-los-angeles-clippers-worth/ og:site_name: TIME og:image: https://static.time.com/v3/assets/bltea6093859af6183b/blt5b547c115c579a25/698695883bc999094c1a3d6e/489626585.jpg?branch=production&width=3840&quality=75&auto=webp&crop=16:9 og:image:width: 1200 og:image:height: 675 og:image:alt: Celebrities At The Los Angeles Clippers Game og:type: article twitter:card: summary_large_image twitter:title: The Clippers Are Worth Nowhere Near What Ballmer Is Paying twitter:description: A sports economist crunches the numbers on how much the basketball team is worth, and says the former Microsoft CEO has no reason to bet the Los Angeles team will ever be worth $2 billion twitter:image: https://static.time.com/v3/assets/bltea6093859af6183b/blt5b547c115c579a25/698695883bc999094c1a3d6e/489626585.jpg?branch=production&width=3840&quality=75&auto=webp&crop=16:9 ---  # The Clippers Are Worth Nowhere Near What Ballmer Is Paying ## Video: Steve Ballmer's Craziest Moments [Watch (HLS stream): Steve Ballmer's Craziest Moments](https://cdn.jwplayer.com/manifests/Gho83GxD.m3u8) (2:04)  _Published 2014-05-31. The best moments of former Microsoft CEO Steve Ballmer_ by [Andrew Zimbalist](/author/andrew-zimbalist/) ## Andrew Zimbalist May 30, 2014 6:59 PM CUT  Steve Ballmer (L) and NBA Commissioner Adam SIlver attends an NBA playoff game between the Oklahoma City Thunder and the Los Angeles Clippers at Staples Center on May 11, 2014 in Los Angeles, California. Steve Ballmer (L) and NBA Commissioner Adam SIlver attends an NBA playoff game between the Oklahoma City Thunder and the Los Angeles Clippers at Staples Center on May 11, 2014 in Los Angeles, California.Noel Vasquez—GC Images by [Andrew Zimbalist](/author/andrew-zimbalist/) ## Andrew Zimbalist May 30, 2014 6:59 PM CUT A billion here, a billion there, pretty soon you’re talking about real money. But Steve Ballmer doesn’t seem to treat $2 billion as real money. _Forbes_ magazine [estimates](http://www.forbes.com/teams/los-angeles-clippers/ "undefined") that last year the Los Angeles Clippers generated $128 million in revenue and earned $15 million in profits. At a 5% rate of return, the Clippers would be valued at $300 million. But NBA teams are scarce commodities and their value goes up over time. Moreover, owners garner handsome indirect and non-pecuniary returns, so sports teams commonly sell at a multiple of their previous year’s revenues. The typical multiple in the NBA is 4\. That would put the Clippers’ value at $512 million. But the Clippers will be signing a new TV contract in a few years, and the team is playing better and is more popular than ever. One can anticipate that their revenues will experience robust growth going forward. What if revenues grew by $52 million, to $180 million? Using the revenue multiple of 4, that would put the team value at $720 million. The only way to get an economic value of $2 billion would be to have projected revenues rise to $500 million. How could that happen? Well, the Lakers got a long-term TV [deal](http://www.forbes.com/sites/kurtbadenhausen/2012/01/25/the-nbas-most-valuable-teams/ "undefined") with Time Warner for $200 million a year, and the [Dodgers](http://www.capitalnewyork.com/article/media/2014/04/8543654/what-dodgers-tv-deal-says-about-mets-future "undefined") have a new one at $340 million annually for 25 years. If the Clippers could get a Lakers- or Dodgers-type contract, then the team’s revenue might begin to approach $500 million. Perhaps this is what Ballmer and his financial advisers were thinking. They should think again. Time Warner is losing its shirt on the Dodgers deal. It projected it would be able to sell the Dodgers’ RSN (regional sports network) to all greater Los Angeles households for $5 per month. So far, only 30% of area households receive the Dodgers games — those are the households served by Time Warner cable. No other cable or satellite distributor is willing to pay the price that the Dodgers’ RSN demands. In fact, the price has recently been lowered to $4 and there are still no takers. It would be unreasonable in the extreme that Time Warner, or its competitor Fox, would be willing to sign a Dodgers-type deal. Even if the Dodgers deal were working out, baseball has twice the number of games as basketball and historically has garnered much larger television contracts than basketball. And the Dodgers are the Dodgers — the second strongest brand in baseball after the Yankees. Recall, too, that the Dodgers own their own facility. The Clippers are tenants. Topping things off, Ballmer was sent a financial package by the Sterlings just a couple of days ago. In normal deals, that’s just the first step. After that, there are questions, details, more contracts to view, people to interview (including companies like Time Warner) and so on. Sterling insisted on final bids within a couple of days — preventing proper due diligence on the franchise, perhaps knowing that the more time he gave the bidders, the more they would learn and the more issues they would find. So what’s going on? Ballmer is making a vanity purchase — he’s buying a toy. His net worth is reportedly valued at close to $15 billion. He could still survive if his net worth were $13 billion. He’s a basketball nut. He wants to have some fun. He wants to sit next to Jack Nicholson. _Andrew Zimbalist is Robert A. Woods Professor of Economics at Smith College. His latest book is_ The Sabermetric Revolution: Assessing the Growth of Analytics in Baseball_._ ```json [{"@context":"https://schema.org","@type":"OpinionNewsArticle","@id":"https://time.com/2800607/steve-ballmer-los-angeles-clippers-worth/","mainEntityOfPage":{"@type":"WebPage","@id":"https://time.com/2800607/steve-ballmer-los-angeles-clippers-worth/"},"headline":"The Clippers Are Worth Nowhere Near What Ballmer Is Paying","datePublished":"2014-05-30T18:59:30.000Z","dateModified":"2026-04-13T08:54:11.374Z","description":"A sports economist crunches the numbers on how much the basketball team is worth, and says the former Microsoft CEO has no reason to bet the Los Angeles team will ever be worth $2 billion","url":"https://time.com/2800607/steve-ballmer-los-angeles-clippers-worth/","keywords":["Basketball","Business topic","Steve Ballmer","Los Angeles Clippers"],"thumbnailUrl":"https://static.time.com/v3/assets/bltea6093859af6183b/blt5b547c115c579a25/698695883bc999094c1a3d6e/489626585.jpg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","author":[{"@type":"Person","name":"Andrew Zimbalist","jobTitle":null,"url":"https://time.com/author/andrew-zimbalist/"}],"articleSection":"Ideas","image":[{"@type":"ImageObject","url":"https://static.time.com/v3/assets/bltea6093859af6183b/blt5b547c115c579a25/698695883bc999094c1a3d6e/489626585.jpg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","width":1200,"height":675,"headline":"Celebrities At The Los Angeles Clippers Game","caption":"Celebrities At The Los Angeles Clippers Game","creditText":"Noel Vasquez—GC Images","representativeOfPage":true}],"publisher":{"@type":"Organization","name":"Time","url":"https://time.com/","logo":{"@type":"ImageObject","url":"https://time.com/images/logo.png","width":528,"height":156},"foundingDate":"March 3, 1923","sameAs":["https://www.facebook.com/time","https://www.instagram.com/time/?hl=en","https://twitter.com/time","https://www.pinterest.com/timemagazine"]}},{"@context":"https://schema.org","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"item":{"@id":"/section/ideas/","name":"Ideas"}},{"@type":"ListItem","position":2,"item":{"@id":"https://time.com/2800607/steve-ballmer-los-angeles-clippers-worth/","name":"The Clippers Are Worth Nowhere Near What Ballmer Is Paying"}}]},{"@context":"https://schema.org","@type":"VideoObject","name":"Steve Ballmer's Craziest Moments","description":"The best moments of former Microsoft CEO Steve Ballmer","thumbnailUrl":"https://cdn.jwplayer.com/v2/media/Gho83GxD/poster.jpg?width=720","uploadDate":"2014-05-31T19:09:04.000Z","contentUrl":"https://cdn.jwplayer.com/manifests/Gho83GxD.m3u8","embedUrl":"https://time.com/2800607/steve-ballmer-los-angeles-clippers-worth/","duration":"PT2M4S","potentialAction":{"@type":"SeekToAction","target":"https://time.com/2800607/steve-ballmer-los-angeles-clippers-worth/?jw_start={seek_to_second_number}","startOffset-input":"required name=seek_to_second_number"}}] ```