The big news of the day in the general sports world has to be this late afternoon news that Microsoft CEO Steve Ballmer has submitted a bid to buy the Los Angeles Clippers for either $1.8 billion or $2 billion. Whatever the final price tag, that's a record for an NBA franchise, and either comes close to or in fact does equal the $2 billion price tag on the Los Angeles Dodgers. Life is good in the big city!
As I understand it, the Sterlings still have to sign off on the deal, and given how this situation has developed, I have to think that won't go down as smooth as some would like. Nonetheless, a deal will get done some time soon, and it will be for some crazy money.
Sports owners across America have to be salivating at what this could mean for them. A lot of owners aren't going anywhere anytime soon. Money is always a part of the reason to retain a team, but I'd imagine there are other reasons as well. For newer owners, owning a sports franchise is one of the most exclusive clubs in the world. For older ownership groups, it's as much a part of their identity as anything.
NFL teams in particular though have to be excited at what the Clippers and Dodgers sales likely mean for their valuation. Teams do not change hands very often, with death now being one of the more prominent reasons for changes in ownership. The Tampa Bay Buccaneers lost their owner Malcolm Glazer this past week. His sons were handling things on a day-to-day basis, so we don't yet know what will happen in that situation. The Lions changed hands with the passing of William Clay Ford, Sr., with his widow taking over. And Ralph Wilson passed away earlier this year, leaving the Buffalo Bills future up in the air to some extent.
Our San Francisco 49ers are not going anywhere anytime soon. The York family owns a huge majority of the team, with small stake purchased by Gideon Yu, Mark Wan, and John Sobrato. Those three exist as co-owners, but this is the York's team without question. Nonetheless, even though the team is not going to be sold, it is still interesting to ponder the value of the franchise.
The 49ers will move into a brand new stadium that should prove to be a cash cow in the coming years. They have a sizable amount of debt to pay off on the new stadium, but there is no reason to think they'll have any trouble with that. The NFL's television contract is a golden goose that makes it pretty hard to not make money. The team will have to pay off its debt before it will really be rolling in the crazy money, but I'm pretty sure they don't need to be searching for loose change under the couch cushions.
At this point, virtually all NFL franchises have to be worth at least close to $1 billion, with some obviously much higher. In 2011, the Jacksonville Jaguars sold for a reported $760 million. In 2012, the Cleveland Browns sold for approximately $1 billion. I don't know if $1 billion is officially the floor for an NFL franchise, but I can't imagine most teams will look for less than that. Most teams will have no problem exceeding that, and potentially by a wide margin. We won't see many sales, but it's going to be crazy money when it happens.