L.A. Clippers owner Steve Ballmer at the Intuit Dome construction site last week
Gary Coronado/Los Angeles Times/Getty-Images
The tenth-richest person on the planet — and one of the loudest when he was Microsoft CEO — is building a luxurious $2 billion arena for the Los Angeles Clippers and plans a calm, non-shrieking celebration if his team wins an NBA championship there.
By Jabari Young, Forbes Staff
Steve Ballmer has a decision to make.
The $80 billion man, owner of the NBA’s Los Angeles Clippers and former CEO of Microsoft, where he’s still the biggest individual shareholder, is building a privately funded $2 billion arena in Inglewood, California. Ballmer will finally be his own landlord, he’ll expand his revenue sources, he’ll get out from under the Lakers — his more popular and more successful co-tenants in downtown L.A.’s Crypto.com Arena — and he’ll be able to better pamper his players who, after eight-plus seasons of his generous stewardship, have yet to get within smelling distance of a championship. The Intuit Dome, expected to be ready next year, is rising across the street from the $5 billion SoFi Stadium, the 70,000-seat home of the city’s two NFL teams, and Hollywood Park Casino. It will be Ballmer’s Xanadu, with features worthy of the tenth-richest person on the planet: 18,000 seats, extra leg room, an acre of halo-shaped scoreboard, a section reserved for Clippers fans, a players’ swimming pool, a corporate office with a breathtaking view of the smog, and 1,200 toilets — triple the number found in less cushy arenas around the league. Let Lakers fans wait in line to pee.
The seemingly pressing decision concerns the blueprints for Intuit Dome. Ballmer, who’ll turn 67 on March 24, was notorious for his intense, high-decibel shrieks of affirmation at Microsoft employee pep rallies. He’s different now. He’s a calmer Ballmer (he gave up caffeine years ago) and he’s quietly in contemplation of the problem (he meditates daily), which he boils down to this: Should he spend additional millions to reconfigure the home-team lockers so they can accommodate 40 pairs of sneakers instead of the 20 called for in current plans?
“I still gotta look at the final numbers,” Ballmer tells Forbes, but dollar amounts have a way of fading into irrelevance when it comes to Ballmer. His decision is pretty much a foregone conclusion. Nothing but the best for the Clippers. Let the Lakers cram things into embarrassingly narrow spaces.
Ballmer has been trying to spend his way to an NBA championship from the start. The problem, of course, is that if money could buy championships, the fingers of both Ballmer’s hands would be weighted down with rings. They aren’t. That hasn’t stopped him. He bought the Clippers from disgraced owner Donald Sterling in 2014 for what was then a record $2 billion. That was after Forbes valued the team at $430 million. He’s still blamed, in some circles, or credited, in others, for hastening the skyrocketing values of pro teams in all sports. All he did, he tells Forbes, was look at the perennially successful Dodgers’ $2 billion sale in 2012 and figure that would also be a fair price for the city’s No. 2 basketball team that’s never won anything.
“I don’t know how much I overpaid,” he says. He does have a point. Forbes now values the Clippers at $3.9 billion. “That’s good appreciation.”
Rick Dahms for forbes
It’s all about appreciation, isn’t it? Sure, Ballmer has to pay a smidgen of luxury tax (around $140 million, according to Spotrac’s estimate), the punishment the league metes out when an organization ignores salary cap restrictions. “But you know, that’s fine,” he says. “You take some losses, and we’ve taken some losses just given our player payroll. But if you take a look, we’re still in it, and I don’t have the cash flow constraint.”
Dynamiting the salary cap hasn’t resulted in the Clippers hanging any championship banners from the Crypto.com Arena ceiling, where the Lakers would have 15, starting in 1949 when they played in Minneapolis. The Clippers started the anchor leg of the 2022-2023 season with the team heading south. A five-game losing streak had NBA scouts warning that lackluster results this late in the year usually result in an early playoff exit. Again.
Despite all the Lakers banners, which are covered during Clippers’ home games, Ballmer says he’s having a blast. “I like the business side,” he says. “It gives my brain something to work on. It’s fun building this arena. This stuff is all fun. And I don’t have a bunch of shareholders to worry about.”
He does, however, have stakeholders — fans and players like All-Stars Kawhi Leonard and Paul George and newly acquired future Hall of Famer Russell Westbrook. He’s also got the nattering nabobs of negativity whose sole measure of NBA success is winning the last game of the postseason. Microsoft’s success was a different thing entirely. For one thing, it was less subject to the frailties of the human body. If Microsoft’s head of marketing tore a patellar tendon, it wouldn’t ruin the season’s MS Office sales.
Since leaving Microsoft in 2014, life is simpler for Ballmer. His usual breakfast is a protein bar and a scoop of peanut butter. He’ll log on to Twitter to browse for news. “For me,” he says, “it’s a news-clipping service. That’s all it is. A clip from Forbes, a clip from the New York Times,” and in the process, “you’ll see what people think is most important.” After meditating, a discipline Ballmer never practiced while at Microsoft, he does an aerobic workout to maintain flexibility, especially in his hips. Then he checks on the Clippers.
Artist’s rendering of Intuit’s Dome’s scoreboard. It will cover an acre.
L.A. Clippers
Athletes’ knees are fragile and unpredictable. Ballmer likes the business side of the Clippers because that’s the part of being an NBA owner that he can exercise some control over. His wealth and his passion make him a player in the league. About the NBA’s collective bargaining agreement, which expires next year, Ballmer jokes that team owners are “under threat of death” from Commissioner Adam Silver for talking publicly about the matter. Asked about the downward trend for cable TV — Sinclair Broadcast Group’s Bally Sports Networks, which broadcasts games of many NBA teams including the Clippers, filed for bankruptcy this week — Ballmer says that coverage is bound to go digital.
“Not because a lot of people don’t buy cable anymore,” Ballmer tells Forbes. “That’s one reason. But we can do a different and better set of experiences.” ClipperVision, the team’s direct-to-consumer product, for instance, allows fans to stream games anywhere without a cable subscription. Still, according to NBA sources, the Clippers haven’t taken a financial loss on ClipperVision only because the club pays for production costs.
Industry sources have put a target price tag of $75 billion on the NBA’s next multiyear media deal, slated to begin after the 2024 season. Doable? Ballmer will only say that a year from now, after a new agreement is reached, “we’re going to be in much better shape financially.”
When Ballmer recalls his 14 years as Microsoft’s CEO, he waxes nostalgic about the Z80 soft card, which allowed Microsoft’s operating system to run on Apple II computers, and the Xbox gaming console, which brought the company into man-caves all over the world. He does, however, cop to two regrets: he was slow to realize the kingmaker status of a search engine and his failure to develop a Microsoft phone.
“The phone could have been us, like Android, as a software-play-hardware-play,” Ballmer tells Forbes. “That was a miss for sure.”
Even so, Microsoft is worth $1.8 trillion today. If Ballmer were to buy the company for the same multiple he paid for the Clippers, his price would be $8.1 trillion.
Maybe the measure of NBA success — winning a championship — is too narrow, too high a bar. Ballmer’s social impact has been huge. He promised $400 million of Intuit Dome’s vendor contracts would go to businesses owned by women of color. He pledged $400 million in 2022 to fuel growth capital for Black-owned businesses. Add that to a $165 million commitment to help schools in low-income communities.
“Steve is not a blank check like people think,” says Glenn “Doc” Rivers, the former Clippers coach who won a championship with the Celtics in 2008 and now stalks the sideline for the Philadelphia 76ers. “But Steve will write a check if you prove you need it.”
“Steve is not a blank check like people think. But Steve will write a check if you prove you need it.”
It’s when Ballmer talks about celebrating an NBA championship that he shows how much he’s mellowed since his ear-splitting, stage-stalking days at Microsoft. He vows his reaction will differ from Mark Cuban’s when Cuban’s Dallas Mavericks won it all in 2011 and the tech billionaire joined the players’ dogpile on the court.
“It’s about the players,” Ballmer says. No dogpile for him. Instead, he says he’d kiss his wife, Connie, hug his three sons and high-five front-office staff. But it will be the players’ moment, he says. “I’ll congratulate them, support them and thank them. But upstage them? Jump in the middle? That doesn’t sound like me.”
Ballmer says it would be especially sweet if the Clippers won the championship at the new Intuit Dome. Let the Lakers watch at home. On ClipperVision.
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Source: https://www.forbes.com/sites/jabariyoung/2023/03/18/for-steve-ballmer-building-an-nba-champion-is-harder-than-running-microsoft-but-more-fun/