$2billion for the Clippers??????

[Islandman]

Ahhhm, if that is what Steve Balmer will pay TODAY then that is the market value unless you have something stronger than suspicion to show otherwise.

[Me]

So that is your explanation (from your 2 posts) why the bidder offered $2B for a team that was valued at $575M less than six months before???

Valued based on what? Forbes list. LOL. You think there is any science to the Forbes valuation? They are being bought because the potential buyers believe they can unlock value of a franchise that has a local television deal is up after the 2015-16 season. The Lakers deal with Time Warner was estimated to be $3 billion three years ago. That alone should tell you why people are paying up for this franchise.

[Me]

Milwaukee Bucks was purchased for $550 million, so I am not sure how anyone could take Forbes' valuation of the Clippers seriously.

[Bricktop]

that was because sterling was cheaping it out and wasn't spending money...it is probably worth more than $2 billion...the Lakers have a $4 billion TV rights deal

[Bricktop]

Like is said before...the Lakers have a local TV deal worth $4 billion...the valuation of a franchise means nothing...because nobody is willing to sell...there is a reason nobody is willing to sell...cause the valuations are irrelevant...

[Time]

That's not the market value. The last valuation of the NBA teams have the Knicks #1 at $1.4B & the Clippers #13 at $575M. This bid is very interesting & somewhat suspicious. Do you realize that Man. U is valued at $2.7B?

The net annual profit for the Clipper is 50 million and yes the value is about 575 million. He is not going to make a profit unless he sells the team. The purchase was nothing more than a rich man buying the Clippers because he wanted it (as a toy) and was determined to outbid the competition which consisted of groups of people who wanted the Clippers as an investment.

[Me]

The Value is 575 million yet the groups who want to buy it as an investment paying 3 times that. Mi wonder is what world unu living in. The Clippers going to sell for the same value as the MILWAUKEE Bucks. Is no wonder us Jamaicans keep selling our assets for nothing.

[Islandman]

We nuh get it at all, taking a magazine valuation as some kind of gospel. I guarantee you that the next time the Forbes list comes out you will see much higher valuations for all the major franchises.

These kinds of sales are so infrequent that valuations based on previous sales mean very little. There are a lot more billionaires around these days looking for new toys.

I guess them take those top ten lists about peoples net worth as gospel too, not realizing that they are based on limited information.

[Time]

We nuh get it at all, taking a magazine valuation as some kind of gospel. I guarantee you that the next time the Forbes list comes out you will see much higher valuations for all the major franchises.

These kinds of sales are so infrequent that valuations based on previous sales mean very little. There are a lot more billionaires around these days looking for new toys.

I guess them take those top ten lists about peoples net worth as gospel too, not realizing that they are based on limited information.

1) Analysts for the bidders calculated the value of TV rights, advertisers, sponsors, real estate and plus net profit per year and came up with a limit on the purchase price. Steve did not care about a profit and he had the cash to do it himself.

[Islandman]

Steve did not care about a profit and he had the cash to do it himself.

And that is exactly the point. There are many billionaires in the world today who do not see a sports franchise as a profit center. They see it as a valuable asset and status symbol just as they would see an antique car or a property in Martha's Vineyard. They will pay top price for it on the rare occasions they are available.

The market price is the price the market will pay, nothing more or less.

[Time]

And that is exactly the point. There are many billionaires in the world today who do not see a sports franchise as a profit center. They see it as a valuable asset and status symbol just as they would see an antique car or a property in Martha's Vineyard. They will pay top price for it on the rare occasions they are available.

The market price is the price the market will pay, nothing more or less.

Alright, I have to agree with your market price thing.

[Bricktop]

The Clippers new TV deal will pay them $80 million a year...he most definitely is going to use it as an investment...he will beat the numbers he would get from having it in microsoft stock...

[Islandman]

Well it might over the long run. I doubt that is the primary motivating reason to bid so high though. What is clear is that a $600 million bid would be ridiculed.

Men with vast fortunes who have bought professional teams as toys are not uncommon. Whether they considered the franchises sound investments is almost beside the point.

The latest major player in the business is Steve Ballmer, the former Microsoft chief executive, who agreed on Thursday to pay $2 billion for the Los Angeles Clippers — nearly four times as much as the previous record price for an N.B.A. franchise.

On Friday, the league said that in light of the sale, it would withdraw its pending charges against the current owner, Donald Sterling.

Could the team possibly be worth that much, fans immediately wondered — or is Mr. Ballmer, whose net worth is estimated at $19 billion, simply indulgent?

In time, the $2 billion bid that seems shocking today may be viewed as a relative bargain.

http://www.nytimes.com/2014/05/31/sp...-nba.html?_r=0

[Me]

Now if we didn't even take the info below and we use the $50 million annual profit number, you are talking about, he is getting a 2.5% return on his investment. The 10 year Tresury bond that rich people put there cash in is yielfing 2.49%. The Microsoft stock which he has/had a lot of has a divident yield of 2.70%. Seems like a very smart diversification of his investment portfolio. Especially considering the yield is going to double within a year or two of the purchase.

Newspaper
http://www.nytimes.com/2014/05/31/sp...-nba.html?_r=1
The Clippers’ local cable television contract, for $18 million a year, is nearing renewal, and projections suggest that the team could get as much as $60 million a year. Mr. Ballmer would also benefit from the N.B.A.'s next round of national television deals, which begins in the 2016-17 season. The teams are expected to receive substantially more than the $30 million a year each one currently gets.