Newsflash: Steve Ballmer is paying too much for the Los Angeles Clippers.
ESPN obtained financial documents that reveal expected 2014 revenue for the Clippers, a team that Ballmer is set to purchase for $2 billion.
The “bid book,” which was used by current owner Shelly Sterling as an exhibit in court, reveals that the Clippers should make $164.9 million in revenue for 2014 before accounting for player payroll costs — that’s about 12 times less than what Ballmer is willing to pay.
According to ESPN, no owner has ever paid five times more than a team’s total revenues. For context, the last NBA team to be sold was the Milwaukee Bucks, which went for $550 million in April.
So, yes, Ballmer is throwing down an excessive amount of money to own the Clippers.
Bank of America experts, which compiled the documents, pegged the Clippers to be valued at between $1 billion and $1.3 billion. That’s about where two other investor groups — which bid $1.2 billion and $1.6 billion for the team — were at.
Meanwhile today, Donald Sterling filed a lawsuit against the NBA, its commissioner Adam Sterling, and his wife Shelly for violation of corporate law and fraud. Sterling is claiming that he has sole ownership rights to the Clippers and is trying to block the $2 billion sale to Ballmer.