This is madness. Two years ago the team was valued at $560 million. The Clippers reportedly turned a profit of about $28 million this year. A $30 million profit for 30 years would only add up to $900 million, less than half of what Balmer is paying for the franchise. This is not a business decision; Balmer has just purchased a very expensive toy.
But if lots of billionaires are interested in buying such an expensive toy, that becomes what the toy is worth.
I’m not familiar with the situation in LA or the potential one in Seattle.
But the key to making big bucks in pro sports is to get the taxpayers to fund most/all of the facility and operating costs.
The NBA team here in Indianapolis not only gets a free deluxe arena but many millions in operating cost subsidies each year.
Also there is a huge tax loophole for pro sports called the “roster depreciation allowance”
http://basketball.about.com/od/nba-cba-glossary/g/roster-depreciation-allowance.htm
Balmer has just purchased a very expensive toy.
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Most likely and with his money he can afford to. When it’s all said and done the
financial and tax implications of this deal when taken as a part of his entire
investment scheme may not be a loss to him.
With 1/10 of his reported net worth. It’s all relative.