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Acquired

Episode 36: The LA Clippers

Acquired

Ben Gilbert and David Rosenthal

Venturecapital, Ma, Investing, Acquisitions, Startups, Vc, Investment, Business, Technology

4.8 • 2.9K Ratings

🗓️ 24 April 2017

⏱️ 69 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

In honor of start of NBA playoffs, Ben & David venture off the beaten path to explore one of Steve Ballmer’s most famous acquisitions, his 2014 purchase of the Los Angeles Clippers NBA franchise. Was this landmark purchase a steal or a turnover for the former Microsoft CEO? We speculate wildly!

Sponsors:
Vanta: https://bit.ly/acquiredvanta

Statsig: bit.ly/statsigacquired
Modern Treasury: https://bit.ly/acquiredmoderntreasury


Topics covered include:
  • The Clippers’ founding in 1970 as the NBA expansion team the Buffalo Braves
  • Early ownership changes and the move west to San Diego in 1981
  • Acquisition in 1981 by LA lawyer and real estate developer Donald Sterling for $12.5M
  • Sterling's relocation of the Clippers to LA in 1984 against NBA rules
  • Struggles over the next 25 years as the "worst franchise in professional sports” according to ESPN
  • Turnaround beginning in early 2010s led by Blake Griffin, DeAndre Jordan, and Chris Paul
  • The bombshell in April 2014, reported by TMZ, of a taped conversation between Sterling and his mistress where Sterling makes hugely offensive and racist comments, directed in particular toward former Lakers point guard Magic Johnson
  • Fallout from the comments, resulting in a lifetime ban from NBA for Sterling, and a forced sale of the team to former Microsoft CEO, Steve Ballmer for $2B
  • Impact of the landmark sale price on NBA and other sports franchise valuations
  • Clippers performance post-sale, and prospects for the future
  • The opportunity for technology and business model innovation in the NBA, and professional sports in general

Followups:

The Carve Out:

Transcript

Click on a timestamp to play from that location

0:00.0

Okay. I have this great, great curve out. I don't know what it's called, but you should go download it and pay my...

0:06.0

I didn't write down the title. I wanted to make sure I got it right. Welcome back to episode 36 of acquired the podcast about technology acquisitions and

0:26.2

IPOs. I'm Ben Gilbert. I'm David Rosenthal and we are your hosts. Today's

0:32.3

episode David and I are venturing away from technology into the world of sports.

0:37.0

We'll be talking about Steve Balmer's 2014 purchase of the Los Angeles Clippers.

0:42.0

So, for full disclosure here, David and I are not huge NBA fans.

0:48.0

Well, maybe except for my unapologetic bandwagon fanhood of the calves and LeBron James.

0:53.0

And I gotta admit the warriors are pretty fun to watch.

0:55.0

Yeah, well they're changing the game.

0:57.0

So, I'll get in Steph Curry is awesome.

1:00.0

But we do love digging into the analysis of any acquisition and there's no shortage of

1:05.2

writing and opinion on this one. And we're going to be doing some episodes on the

1:09.5

overlap of sports and tech in the near future so we figured we would dive in just

1:13.9

absolutely head-first and kind of force ourselves to do all the research and

1:18.0

thanks to many acquired listeners and many of David and my friends who we called in to get their kind of like

1:25.7

hardcore sports opinions on all this.

1:28.7

Yeah, open invitation listeners to get in touch with us by email or jump in the slack and tell us where we went wrong.

1:36.1

But we think this will be really fun.

1:37.6

We've done a bunch of kind of serious, more hard-hitting episodes in a row and we wanted to do something light and given that the

1:44.4

NBA playoffs start literally today we thought this would be a fun one.

1:48.6

Yeah and I think you know this was a two billion billion purchase by Steve Balmer and anytime there's a $2 billion transaction going on involving Steve Bomber.

1:59.0

Involving Steve Bomber, you know, whether it's sports or airlines like we did with the Virgin Alaska

...

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