Compared to past NBA deals, former Microsoft CEO Steve Ballmer’s $2 billion purchase of the Los Angeles Clippers franchise — which became official today — is not only record-breaking, but also quite excessive. The previous NBA team to be sold was the Milwaukee Bucks, which went for $550 million in April.
But Ballmer defended the price tag for the Clips in an interview with ESPN reporter Ramona Shelburne this morning.
“It’s not a cheap price, but when you’re used to looking at tech companies with huge risk, no earnings and huge multiples, this doesn’t look like the craziest thing I’ve ever acquired,” he said.
And this will no doubt get Jeff Bezos’ attention: Ballmer added that it’s less risky to buy the Clippers for $2 billion than it is to invest a company like Amazon.com that has “absolutely no earnings.”
Here’s the full quote from Ballmer, via Shelburne.
“Lots of people run lots of numbers. I feel like I paid a price I’m excited about. It obviously was a price that was negotiated and I feel very good about it. It’s not a cheap price, but when you’re used to looking at tech companies with huge risk, no earnings and huge multiples, this doesn’t look like the craziest thing I’ve ever acquired. It’s my own personal money, and you’re just as careful with your own money as you are with your shareholders money. And compared to some of the (publicly) traded companies, there are great companies out there like Amazon with absolutely no earnings and a huge market caps and lots of risk. There’s much less risk. There’s real earnings in this business. There’s real upside opportunity. So compared to the things I looked at in tech, this was a reasonable purchase and it’s one I’m really excited about. Plus, I’m really excited about the product. I love it. I’ve been over a hundred basketball games in the last year and that’s just high school games.
Ballmer was known for spending big on acquisitions during his tenure at Microsoft, with the most notable bust being the failed $6 billion purchase of aQuantive, the Seattle-based digital marketing and advertising company. On his way out the door, Ballmer orchestrated Microsoft’s $7.2 billion acquisition of Nokia’s smartphone business, which his successor Satya Nadella is now grappling with.
And don’t forget his unsuccesful attempt to acquire Yahoo for more than $44 billion.
Bottom line, Microsoft investors may have reason to cheer that Ballmer is spending his time at the court these days.
Related: What type of NBA owner will Steve Ballmer be? Four clues from his Microsoft career
