Can David Geffen Save the Clippers?
by Steve Perrin on Jun 8, 2010 3:26 PM PDT
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PrintLet's make one thing clear right up front. This is one story, and while there is some verification that David Geffen's interest in the Clippers is real, there is no indication that the Clippers (or any portion of them) are for sale. So the odds are that Donald Sterling will remain the owner for the time being, or as Peter Vecsey put it in his article, "He'll take the Clippers to the grave with him" (hasn't he already done that?).
Still, it's a great story, and a terrific idea. As I was reading about it, it occurred to me that there haven't been any Hollywood mogul-type owners of LA teams, despite what would seem to be a logical union. Sure, Disney owned the Mighty Ducks and the Angels for a time, and News Corp experimented with the Dodgers, but in both of those cases, it was the corporation owning the franchise, and they soon realized that teams aren't good corporate properties. Sports ownership only makes sense if there's some amount of ego involved, so it makes more sense for a wildly wealthy individual than for a corporation. In LA, a record executive / movie producer makes perfect sense.
Let's recap what we know. Peter Vecsey wrote in the NY Post that David Geffen is discussing purchasing a 51% interest in the Clippers from Donald Sterling. The timing here is important - according to Vecsey's source, Geffen told Sterling "he can deliver LeBron as long as he's calling the shots."
Both Lisa Dillman of the LA Times and Marc Stein of espn.com have confirmed that Geffen has an interest in buying the Clippers. But the Clippers did their best to throw cold water on the hot rumor by releasing a statement through club president Andy Roeser saying that the team is not for sale.
Mr. Sterling has never expressed a desire to sell any part of his team. Because it is an asset of remarkable value, it's true that there have been countless inquiries over the years. But the Clippers have never been for sale.
Of course, the team doesn't have to be 'for sale' in order to be sold. If Geffen is correct that he can deliver LeBron James (and one doubts that anything is guaranteed there), then Sterling would be wise to listen.
LeBron's right hand man, Maverick Carter, was sitting next to Geffen at game 2 of the Finals on Sunday. So it would indeed appear that there is a relationship there. According to Stein, LeBron was also invited but chose not to attend for fear of distracting the attention away from the game itself (as if that weren't already the case).
We've discussed many times before that Donald Sterling is a "buy and hold" man. He got rich buying real estate and watching it's value increase. He's never shown any interest in selling the Clippers, and in one apocryphal story he supposedly turned down one billion dollars (with a b) for the team a few years back. (Take that with a grain of salt.)
One wonders however if he's at least intrigued by this scenario. I mean, what if he got to keep his seats, got to keep a significant chunk of the team, got to act the NBA big shot as he always has and clearly enjoys... only now he'd get to do all of that for a team featuring LeBron James? The conventional wisdom is that LeBron has too many good options to consider coming to a team owned by the worst owner in professional sports. But to come to LA, to slot into the starting lineup with Baron Davis, Eric Gordon, Blake Griffin and Chris Kaman, and to play for a team owned by a media mogul when one of the primary emphases for leaving Cleveland is to expand his media exposure? Like I said, I don't believe that Geffen can guarantee a LeBron signing - but it's safe to say it make the Clippers significantly more attractive.
If this is going to happen, it needs to happen fast. It's June 8, and teams can begin negotiating with free agents on July 1. As Citizen madglove pointed out, the logistics of getting a sale price negotiated, a new owner approved by the NBA board of governors, etc. in a matter of four or five weeks is pretty daunting. And with the official position of the Clippers today being "the team is not for sale" it seems safe to say that this transaction is not currently on the fast track.
As an aside, Vecsey's article also touches on a meeting between David Stern and Sterling, presumably concerning the Clippers' failure to pay Mike Dunleavy the money they owe him. According to Vecsey (and this should also be taken with a grain of salt), a member of the coach's association "is encouraging a boycott of the franchise." I'm not sure how that would work, or what it would look like, but might it explain why the Clippers have failed to interview a single coaching candidate, while jobs in Philadelphia, New Orleans and Chicago have been filled (in at least one case, with a candidate the Clippers asked permission to interview, but never did). As I said at the time, getting into a dispute with MDsr this summer was a monumentally bad move.
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Only way Geffen can turnaround the franchise single handedly is
by moving and rebranding the franchise.
If LeBron comes to the Clippers things can change, but I am confident that LeBron is less worried about who is owning the team than if he feels that the team can win now.
LeBron already has all the connections in the world, he doesn’t need Geffen to go into other business ventures.
Geffen has a successful track record in his industry. DTS has a successful track record in his industry.
Like DTS, just because Geffen is successful in one industry means that he can translate that success when it comes to owning a NBA franchise.
correction
Like DTS, just because Geffen is successful in one industry doesn’t mean that he can translate that success when it comes to owning a NBA franchise.
Different level of connections
Lebron James would have to pursue certain roles if he wanted to act in movies or television. Geffen can actually create vehicles for James to be in or he can call in favors from friends. The current Hollywood suits owe Lebron nothing, in fact anything they attach to him is probably devalued because no one really wants to see athletes pretending to be real actors. But Geffen could probably turn Lebron into a Rock or Arnold Scharzeneggar type actor… or at least try, it would depend on the general public if they would buy him in that kind of role.
FA in 2010.
think about it
Geffen would be putting his reputation on the line, just so LeBron can suck at acting or rapping.
Makes no sense.
How so
First off its product placement marketing for the Clippers anyways as it creates more exposure and its not that hard to mask bad actors. They do it all the time with supermodels turned actresses. Do people really watch Transformers or GIJOE for the acting? Lebron could be a convincing Hero with the right script or he can do some stupid comedy like Kindergarten Cop or the Pacifier. Arnold has a heavy Austrian accent and he’s played a US Government operative multiple times in big budget movies (Eraser, Commando, Predator, True Lies). Anyways Geffen can and knows how to make it happen. I wonder if its a violation of the CBA if he gives Lebron $20 million to star in a movie.
FA in 2010.
again like I said
what makes you believe that LeBron doesn’t have access to those things right now?
Don’t be so naive. Shaq was able to get into movies without the connection of a Geffen. MJ was able to make Space Jam without the connection of a Geffen type as well.
No guarantee of success...
…but hopefully a better owner than DTS.
Clarification: better for the fans. As a business, I think the Clippers (and thus DTS) are succeeding.
profit margins only count in business
DTS = success business wise
Everyone has a price
The Clippers are a cash cow for DTS. They are one of the most profitable franchises in sports, and he has an amazing deal with Staples Center. So Geffen would need to blow him away.
The question is, does Geffen have to deliver LeBron to DTS convince the Donald to sell, or does he have to have ownership of the team to get LeBron?
If Geffen were to get a commitment from LeBron prior to July 1st, and prior to his owning the team, is that tampering?
This could be a clever way to begin free agent procedings early.
In any event, there are a lot of moving parts involved in all of this, and not much time, so I’m a bit dubious.
Also, this Dunleavy thing is another strike against LAC. I know some people around here thought that MDSr. was the cancer, and that once he was gone, things would get back to being wonderful (?), but it looks like the dysfunction runs a little deeper than that.
It would be helpful to have a coach and a GM at some point so that potential free agents will know what they are getting into.
You do NOT want free agents picking the coaches or players. All that does is recreate the same problems that Cleveland had – LeBron was in charge. And the rest of the players here will resent a free agent coming in and running the show.
Do not worry. (Matthew 6:27)
I'd glady trade our problems for the "problems" CLE has/had.
"Buckle your seat belts, folks. This one's doing down to the wire." -The inimitable Ralph Lawler.
by Gordon for President on Jun 8, 2010 3:46 PM PDT up reply actions
I would be happy with Cleveland's "problems" too
But Cleveland still didn’t win a ring.
Do not worry. (Matthew 6:27)
Just a guess
i don’t see how it could be tampering since prior to Geffen owning the team, he would have no relationship with the team. I would think you have to be employed in some capacity by the club in order for it to be tampering.
by Michael White on Jun 8, 2010 3:46 PM PDT up reply actions
So in essence, Geffen can start working this thing now.
He can get a commitment from LeBron to sign with the Clips if he secures ownership, and then use the commitment in his pitch to DTS.
Do not worry. (Matthew 6:27)
Correction
Some of us thought that MDSr was a poor coach and that the team would never win wtih him at the helm. We didn’t think that the team would “get back to being wonderful.” We thought rather that the only chance the team had of actually becoming a winning franchise would be to fire him as part of an overall strategy to completely change management as a whole.
You know that mikey – let’s not overstate things, shall we.
"[Fans are] not technically a lot of times savvy. They don't understand and they don't weigh issues the way that [I] weigh them."
Mike Dunleavy, Sr.
by Jax on Jun 8, 2010 9:58 PM PDT up reply actions
+1
No one actually believed firing Dunleavy was a silver bullet, but rather a step in the right direction. I was personally hoping that his ego would make him unable to stay on as just GM but than DTS went a step further and publically shamed him. Now he’s being boycotted by the coaches association so maybe Roeser will have to coach the team this year…who knows?
"I want someone who will, you know, let me put it in or who [will] suck on it." – Donald Sterling
Anyone who thinks
MDSr is a good coach doesn’t understand basketball.
"[Fans are] not technically a lot of times savvy. They don't understand and they don't weigh issues the way that [I] weigh them."
Mike Dunleavy, Sr.
Dunleavy was named NBA Coach of the Year in 1999
Oh my… apparently even the people who get paid to vote for these sort of things know nothing about basketball.
FA in 2010.
by ClipperChuck on Jun 10, 2010 2:34 AM PDT up reply actions
I remember that year
Wasn’t that the year the Blazers lost to the Lakers . . . there’s this one game
Oh my
"[Fans are] not technically a lot of times savvy. They don't understand and they don't weigh issues the way that [I] weigh them."
Mike Dunleavy, Sr.
He wasn't a particularly great coach
But, as is plainly clear now, he was NOT the Clippers main problem.
They have made zero progress since canning him.
Do not worry. (Matthew 6:27)
Geffen is Gold
I think that a mogul like Geffen owning this team would be amazing. It is my opinion that he would do what it takes to make a successful franchise. This guy has a great story of nothing to something and thus, I think he could do the same for the Clipper’s. In a city like Hollywood, he realizes that you need the big star to have a blockbuster movie.
If Donald is really that serious about winning—- which he says he is—- he should really sell to Geffen!
If you are a little curious on who this cat is check this out.
http://en.wikipedia.org/wiki/David_Geffen
Steve, what makes you think they haven't interviewed anyone.
Mark Jackson basically said that he would take the Clippers job if it was offered to him.
In the interview with GM Neil O.--- he said that they were going to be very private about it.
He then said, when they start being active and start to interview they are going to be quick. He also said the Clippers, will pick the 1st person that blows them away and that has the philosophy they are looking for.
Overthrow the dictator
For my over twenty some years as Clipper fan, I am hoping Geffen becomes the new owner;
Clips Nation citizens finally free(winning).
I hope the team doesn't move
LA is my home and the home of the Clippers
http://bcnbatalk.wordpress.com/ - Scoops on Hoops!
"Just don’t walk on his beach!"
Ah, yes. A man of the people.
Do not worry. (Matthew 6:27)
My parents live in Malibu
And sometimes use the beach access easement that he fought to have closed.
In this world, you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant. - Elwood P. Dowd
by Steve Perrin on Jun 8, 2010 10:58 PM PDT up reply actions
Eh move to Anaheim
I live in LA so it wouldn’t be good for me personally, but I think the Clips need to get out of LA proper and form their own identity in Anaheim. They almost did it years ago and it would have been great for their identity.
The basketball world will ALWAYS equate LA with Lakers. No matter what the Clips do, the Lakers have already established too much history to change that. The city’s identity is intertwined with the Lakers. It will always be that way.
I’d want the Clips to start fresh in Anaheim, have their own similar but distinct fan base and one day build their own culture. Just like the Angels have done.
Nah it could be changed
The White Sox and Cubs, the Giants and Jets, the Yankees and Mets. There is plenty of room in the big cities for two teams, as long as they are winning occasionally.
Also, Anaheim or Irvine or whatever would have to build a new arena, the Pond is way too small to support a NBA team.
FA in 2010.
How is that change?
The examples you gave aren’t at all examples of the dominant team losing its grip. It’s just the 2nd team surviving. The Yanks and Mets? Seriously? The Mets are nowhere near the brand the Yankees are. Same with the Jets and White Sox.
Not saying LA can’t sustain a second team. It obviously can. But the Clips will forever be the 2nd team. That will never change. And your examples certainly don’t dispute that. The Mets will never supplant the Yankees. Too much history.
As for The Honda Center being too small, Staples seats 18,118 for hockey and Honda seats 17,135. You can fit just under 1k more for basketball. That’s well over what the Clips draw regularly. The Lakers drew an average of 18,997 this past season, nearly full capacity. The Clips would be just fine with an arena that seats around 18k.
Who cares if they are the 2nd team
as long as they are respected. The Mets had a good run in the 80s. They just built their own new stadium. They have one of the highest payrolls in baseball. The White Sox finally won a title in 2005. The Cubs haven’t won one since 1908. So what will the Clippers history be if they move? They couldn’t hang with the big bad Lakers so they left town? That’s not winning, that’s running away from the problem.
The Pond is a outdated stadium that lacks the luxury boxes (only 84 compared to 160 for Staples) of a modern arena. They already did numerous studies on this and teams would lose a ton of revenue playing at the Pond. 2/3rd of Staples is in the lower bowl of the arena thus the average ticket prices are much higher than it would be at the Pond.
FA in 2010.
You're prob right about the Honda Center
But your examples aren’t instructive at all. The Sox won in 05 and the Cubs haven’t in over a decade…yet Chicago is still a Cubs town. Thanks for proving my point. The Mets had a good run 20+ years ago…and what does that have to do with anything? Again, they’re absolutely second class citizens compared to the Yankees.
When “the problem” is something that can’t be changed, it’s not running. It’s recognizing it and solving it by going around the problem. I’m obviously not saying that moving just solves everything. It doesn’t solve anything really as long as DTS is the owner. But it would go a long way towards helping the Clips develop a better identity with its own distinct fan base which actually associates itself with a region.
You’re probably right about Hondo though. So I guess it’s really a moot point as the conversation was more realistic before Staples opened. I’m sure they would consider a significant renovation though if they could lure a pro basketball franchise to go along with the Ducks.
Eh
Is Chicago a Cubs town? I thought it was geographic thing. From my viewpoint the teams are both popular or how else could they both have huge payrolls?
And why do you care what fans of other teams think of the Clippers. I hate to break it to you buddy but you chose the wrong team. We are fans of a professional basketball teams. Few if any of these guys played at your alma mater, few of these guys are local products and few of these guys live lives anything remotely close to 99% of the fans. Our fanship is completely subjective, there is no contract that says we have to be a fan of this team or that team. We could be complete bandwagoners and just support the “it” team of the time.
I think its beyond stupid when fans care what fans of other teams think about their teams. We all made our decision to follow team x, we all have our reasoning behind following team x and at the end of the day whether the Clippers, or Lakers or Knicks or whomever win it really should have zero impact on your actual real life.
FA in 2010.
I should add
unless you a degenerate gambler like me and you have big money on the Celtics winning the series. Go Celtics!
FA in 2010.
Wow...you really went completely off topic
That rant really has nothing to do with anything we’re talking about.
This convo isn’t about MY fanhood. I’m a fan of the Clips regardless.
My commentary has been about developing the Clips’ fanbase and culture.
and my point is you can develop it
even with a historical franchise in the same city. A good chunk of the population in Southern California have moved to LA recently. Its not as if they inherited some gene that makes them a fan of any team. If the team plays well they will win over fans. If they suck for 22 of the 25 seasons then the fan base will be predictably small (and depressed).
FA in 2010.
Dreaming Big?
Are you really aspiring for the Clips to outshine the Lakers? I think any Clipper fan would take the rep of the Jets, Mets, or White Sox.
A big issue w/ Orange County is the fan base, even though it is a growing market. O.C. fans drive to L.A., but L.A. folk will not drive down to O.C. The Angels have been able to do it, but they struggled for years and the Rams had to move eventually. I’m from O.C. born and raised, and think it’s a bad move.
The Orange County Clippers. The Irvine Clippers. The Anaheim Clippers, just hurtin’
Part of the Clippers value is their Staples deal...
Clips have very low overhead and no debt… that’s largely because they don’t pay much to live at Staples and don’t have a huge “arena debt” hanging over them like a lot of teams. This is one of the things that helps them declare a profit every year.
You can’t measure the value of moving to Anaheim without measuring that… and I think it probably makes staying at Staples a no-brainer.
The Giants and Jets have co-existed in the Meadowlands for quite a while now. The L.A. fanbase is plenty big enough to support two teams without a problem. You could probably even add a third team in Anaheim if that’s your wish and do just fine.
But why should the Clips move to the Honda Center? We saw plenty of evidence in 2006 that the Clippers “culture of losing” was forgotten as soon as the team started winning.
Why would DTS or David Geffen want to author an expensive move to Anaheim? It’s not near their homes, it’s not near the west side (home to many celebs and high rollers), and its not near the team’s brand new training center.
The argument that the Clips should move… anywhere… is baffling.
Finally, turning the Clips around and establishing a downtrodden, terribly-run franchise is a great story that will be embraced by the media. I think a smart guy like David Geffen probably looks at turning around an undervalued franchise as an opportunity… not an impossibility. And I don’t think the job is radical. They make a profit, they do okay. Win some games and you make a lot of money. A LOT of money.
i think downtown LA has really improved itself surrounding staples center too
that ritz carlton building is humongous and LA Live can have a great vibe before and after games.
Move it to Anaheim.
I will buy season tickets for sure!
Ralph says...
Ralph Lawler Wow, I step off the plane from Chicago and walk into a Wave of rumors about the possible Sale of the Clippers to David Geffen. I do know that he has made inquiries before but none have gone public like this one and the timing with Free Agency just 3 weeks away adds to the drama. If the man really can deliver Lebron James, I would think an offer would have to be very seriously considered.
sounds way too good to be true
now if only someone could talk some sense into sterling…
The problem is Donald Sterling has been hated for years
and he is still the owner and will remain the owner until he dies. He does this inspite of all of us. It is his destiny to make Clipper fans lives miserable. This rumor only makes things worse. The last thing hes gonna do is sell it to some Hollywood dude especially now that he knows he wants it. Oh well, time to go take a pill.
by skeptic con urqeul on Jun 8, 2010 10:25 PM PDT reply actions
DTS please do this
u will still have the majority ownership and the value of the franchise will rise dramatically with or without lebron, i dont understand your infatuation with owning this team, u dont seem to love basketball or winning, u seem to enjoy being a joke for everyone and constant losing, please man up and sell the team to this geffen guy and lets start a new chapter in clipper history that will be positve. david stern needs to get involved here
If DTS even sold a minority share of the clips it would be huge
it would mean there would now be two voices in terms of decisions, and maybe eventually Geffen could buy a majority share.
LeBron or Bust !!!!
I'm all for it.
Not because I think it will “guarantee” us getting Lebron or anything like that. As with the whole Dunleavy situation, I just think it’s time for a change. It’s long overdue in Sterling’s case.
by Handsome_B._Wonderful on Jun 8, 2010 11:47 PM PDT reply actions
Interesting stuff
Geffen is a major Force with a capital F. The only part left out of this thread, that I’ve seen, is the note that Geffen’s young boyfriend is the one who took an interest in the Clippers. But it was DG himself who was sitting courtside next to Maverick Carter.
One thing that hasn’t been mentioned, that I put alongside this distracting item, is Geffen’s long term interest in making a deal to purchase the LA Times. Which one would you rather see Geffen get his hands on, the Times or the Clippers? Now that’s a poll question!
Geffen’s name was brought up many times with regards to the Times, for a long while. There’s a political discussion to be had there, but regardless of that fact (Geffen making the Times a progressive Left Coast news organization), Geffen seems to be gravitating towards taking problematic, undervalued Los Angeles assets and giving them a boost. The best thing about this story is that it makes sense. Geffen couldn’t care less about basketball, but the NBA has reached the stage of show business saturation, with a Russian billionaire ready to guide the Nets, that running a franchise makes sense from the pure media mogul, non-fan perspective. If Geffen ever thought about basketball, he would have been a Lakers or a Knick fan a long time ago. We’re not talking about Jack Nicholson here. It’s more like Barry Diller making a run at the Clippers.
That’s the nice, flattering part. Major forces are recognizing that the Clippers are a highly significant entertainment/sports asset, a diamond in the rough.
I don’t think this will come together. There are too many moving parts. But as the season winds down and we head to the Big Summer, this nice story from Vecsey of all places and the hubbub around it make the Clips part of the conversation in a serious way, as they should be.
And by the way, hanging out and talking to David Geffen is, excuse the image, a wet drean for DTS. DTS is an old school, reptilian version of Beverly Hills glamour and charm, and he just happens to own more apartment buildings than anyone else. Geffen is the real deal, the guy that DTS would love to have acknowledging him, let alone being his partner. But the deal has to make sense. Geffen is a guy who can have a real conversation with DTS about money and how it’s made, how it works. Geffen does not goof around. A friend of mine used to hear phone conversations he had with people in his business, and he said that he sounds like a Brooklyn street fighter, as tough as it gets, no messing around when it comes to money and deals. But he’s also the best talent manager ever. It would be clear, simple, and lethal, deal-making at the highest level. It could happen. It would be astounding, amazing, absolutely great.
My guess is that they dance around a little bit but nothing happens. Which is good for everybody in modest way. Makes the Clips look good. They’re on their way to being a strong team whether Geffen buys them or not, whether LBJ or a big free agent comes or not. But it would sure be fun to see them skim a bunch of moves forward on the board.
Good insights
I didn’t include the bit about DG’s BF simply because I had not yet seen it when I began writing this. If Geffen is the dealmaker extraordinaire we think he is, it hardly seems in keeping with that rep that he would seriously consider pursuing an 8 figure deal because his boyfriend thought it was a good idea. So that note, if true, makes me think this is even less likely than I already thought.
His interest in basketball is another interesting sidenote. His pals Spielberg and Katzenberg (the S and K from the erstwhile Dreamworks SKG, with you know who being the G) are fixtures at Lakers games – but until Game 2, I don’t think I’d ever seen Geffen in his seats.
In this world, you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant. - Elwood P. Dowd
Not enough zeroes...
Love Zhiv’s post but Steve I think it would be a NINE figure deal. Forbes put the Clips value at 295 million. Half of that is roughly 150M. That is 150,000,000. That’s nine numbers and some comas.
Forget the BF. Doesn’t matter. If you could pry away half the Clips from DTS you’d be making a great business deal. They have no debt, they have a paid-for practice center, they have an excellent deal with Staples. Even without a big piece like Lebron, if they can put together some decent playoff runs the team value swells upward INSIDE A YEAR. A well-managed team will make more profit next year and increase its residual value accordingly.
This isn’t some start-up company that won’t make a profit in five years, this isn’t Dreamworks, a company that’s never turned a profit (and which Geffen finally bailed on), this is the LA Clippers… a big, fat diamond-in-the rough.
I agree
I think that DTS could see selling half the team to Geffen as an investment that would pay off for him. I am not sure that Sterling cares as much about sucking up as Zhiv speculates (at least to the point where he would have to pay big money to do it).
I also think Zhiv doesn’t give DTS anywhere near the credit he deserves for his business acumen.
"[Fans are] not technically a lot of times savvy. They don't understand and they don't weigh issues the way that [I] weigh them."
Mike Dunleavy, Sr.
agree
zhiv is overlooking how brilliant DTS actually is in terms of business sense
I wouldn't say brilliant
for the most part DTS is a one-trick pony. He’s never really built anything to my knowledge. He’s just sharp at finding undervalued assets and holding onto them while the community around his holdings improve and he profits from their hard work (its happened both in his real estate holdings and the NBA). It’s a talent that seems pretty obvious but not many people possess it but guys like Steve Jobs, Bill Gates etc have actually helped build entire industries.
FA in 2010.
by ClipperChuck on Jun 9, 2010 11:30 AM PDT up reply actions
he is brilliant
if you don’t think so you are clouded by your Clipper fanboyism.
Guy had the foresight to become a divorce lawyer before divorces became “normal.”
He had the foresight to invest MILLIONS into failing properties, and turn them around into very profitable assets.
He is a 1 percenter in terms of a business mind. He didn’t come from money, he built his wealth. Put your feelings aside and give the man due respect as a brilliant business man.
No
we can argue for days on what determines a “brilliant businessman”. He has a eye for depreciating assets no doubt, I still haven’t seen him build anything substantive value. He didn’t invent any new technology, he didn’t create some new products, he just took existing buildings, kicked out tenants so he could charge tenants more. Truly brilliant businessmen are able to balance wealth and social contributions. See Warren Buffett, see Bill Gates, see John Rockefeller. What’s his legacy? Slumlord? Discriminating employer? Worst owner in Professional Sports? Patron Saint of hookers? The man had many opportunities to actually do positive for society and instead he continues to milk every one of his ventures for a few more bucks. Sure, go ahead and call that “brilliant”.
FA in 2010.
by ClipperChuck on Jun 9, 2010 12:37 PM PDT up reply actions
creating an industry or creating a new product
has nothing to do with being a businessman. Doing positive things in the society has nothing to do with being a good businessman.
Buffett success had nothing to do with the things you mention. In fact his success has everything to do with the same skill set DTS has.
Rockefeller was able to grow mainly due to the industrialization of America; he had a monopoly on a commodity that was important to the advancement to society.
Gates initial success had nothing to do with business sense. He has since grown into a great businessman. But do you know what he does now? I’ll give you the answer, he buys intellectual property of technologies that he thinks can take off in the future. This is the skillset that DTS has.
I know you think I know nothing, judging by the fact you disagree with me on every single thing it seems, but you are completely wrong on this subject. Look at how other opinions all favor my opinion over yours.
Making money makes you a good businessman
and Stern knows how to make money.
Wrong
Making money alone does not make you a good businessman. Michael Milken made a ridiculous amount of money through junk bonds and insider trading in the 80s so I guess he’s a brilliant businessman too. Bernie Madoff did too with his ponzi scheme. Funny how “scam artist” and “brilliant businessman” are being used interchangeably here as long as the person has made a lot of money from it.
FA in 2010.
There is no wrong and right. It is a matter of opinion.
Yours is more holistic…feel good…touchy feely type stuff…
…mine is a bit different.
I’ll take the Clippers for example. The team is profitable. Minimal leverage, good cash flow, good cost structure.
I would say it was a well ran business.
Money can be seen as a means of measurement. Happy employees and happy customers? Theoretically the whole point of that is so the employee retention rate was high, projection onto customers, etc would lead to happy customers. If employee turnover was high it would be costly and if their happiness affected customer satisfaction that would also effect profits. The team is profitable so their are more revenues (people willing to pay) than expenses.
What are your parameters and how do you judge what makes a good businessman?
The Clippers profitability
comes from gaming the system. The Clips keep a low payroll, they get “cash consideration” from picks, they get the tax rebate from those crazy teams trying to win, they get a revenue share from the National TV deals even though no one is tuning in to watch them. Their season ticket holder base is much smaller than it should be, they can still sell some tickets for a team that has won a average of 23.667 games the past three years because it is in LA but they could easily double gate revenue (and concession sales) if this was a playoff team (Clipper tickets sell for 33% the price of Lakers tickets). If anything the team is a huge underachiever as its a big market team in a world class arena yet its only the 25th most valuable franchise in the league.
So yes, laud Sterling a business genius, after all he was the guy behind marketing Magic and Bird. Or making MJ a household name or bringing helping the NBA become a global sport. Its funny because Sterling is by all means a billionaire but he’s really on Welfare in the NBA. He’s a freeloader, he’s merely along for the ride as other teams are putting in the real effort to improve the league. Of course he turns a profit, he’s running at zero cost and letting the other teams do the real work.
There is a popular sports expression “playing not to lose”. Well that’s how Sterling/Clippers approach the finances and thats why this team rarely wins.
FA in 2010.
Not sure where you got "genius" from
I said good, as in not bad, maybe better than average.
Why not lighten up a bit?
"[Fans are] not technically a lot of times savvy. They don't understand and they don't weigh issues the way that [I] weigh them."
Mike Dunleavy, Sr.
Why?
Its a serious affront to call a sleazebag like Sterling brilliant. Drug dealers are good at making money too. They know how to sneak “product” through customs, sell it at a huge mark up. Maybe we should laud these guys as brilliant businessmen too. Let’s just say Sterling knows how to make money (good for him personally I guess) but lets not make him out to be a brilliant businessman.
FA in 2010.
by ClipperChuck on Jun 10, 2010 2:23 AM PDT up reply actions
So Sterling's a drug dealer in your mind
Stop
"[Fans are] not technically a lot of times savvy. They don't understand and they don't weigh issues the way that [I] weigh them."
Mike Dunleavy, Sr.
Also not sure about this but
I believe that the Clippers aren’t just profitable…they are one of the MOST profitable teams.
Yes that is due to the cost structure, but if you look at in a pure investment standpoint. I would rather invest in the Clippers than the Mavericks.
None of the teams are really great investments
If the team is worth $300 million and the team generates $15 million in net profits that’s only a 5% annual return (the team grossed $90 million in 2008, so 15% returns would be pretty good). I mean obviously its not bad but it isn’t exactly a gold mine either.
I would rather invest in the Clippers over the Mavericks now because they have more financial upside. Cuban has actually made money on the Mavericks still because he took a losing franchise and made it a winner (and built a new arena for the team) that now the Mavericks are one of the higher valued teams in the NBA. He paid $285 million for them in 2000 and they were valued in 2008 at $466 million.
FA in 2010.
Not the way it should be calculated
$15M should go against revenue for net profit margins.
$300M is the EV, so in order to get the IRR you’d have to figure out what he bought it for ($20M) and then add in the cash flows for the last 20 years of ownership.
Since we don’t know what the cash flows are it would be hard, but based on purely what he bought it for and what it’s worth now, that is a 14% annualized rate of return over the last 20 years. Not even counting how much he made per year….not bad.
The team WAS a great investment
the NBA has become far more popular now that they are on cable. In the 80s and early 90s you could only see the National Televised games on Sundays starting around Christmas. What I was pointing out that the profitability of clubs present day is fairly modest.
FA in 2010.
by ClipperChuck on Jun 10, 2010 4:48 PM PDT up reply actions
Again, I disagree with this
How is he gaming the system? The system is actually a CBA and agreements between the league and its owners. They can kick Sterlning out if they want to or they can change the rules.
Do you think that owners who lose millions on their teams are smarter than someone like Sterling? I’m glad they do that, but that doesn’t make them better or smarter than him.
"[Fans are] not technically a lot of times savvy. They don't understand and they don't weigh issues the way that [I] weigh them."
Mike Dunleavy, Sr.
Any system has flaws within it
people can gain any system. Sterling did for years before as well, he used to only have the minimum number of players signed, he would sign players just to meet the minimum salary cap (Steve remembers Vinny Del Negro’s stint with the Clippers). He’s like the guy who figures out just how long it takes to qualify for unemployment, then gets fired on purpose so he can veg out for 52 more weeks.
FA in 2010.
by ClipperChuck on Jun 10, 2010 2:20 AM PDT up reply actions
Other opinions?
So far just us 4 and all of you incorrectly associate making a lot of money as the sole measure of success. Just because you make money hardly makes you a “brilliant businessman”, is Sterling’s business model something that can be emulated? Are his employees well paid and happy? Are his customers (renters) satisfied? What about his business partners? Can you even name any of his buildings besides the practice facility and Sterling Plaza?
FA in 2010.
depends on your opinions on ethics
with can be debated endlessly. Unfortunately, most businessmen take the libertarian approach to ethics
I think your criteria for what constitutes a "brilliant" businessman
are rather limited.
Gates developed a program that runs a computer and then ruthlessly stifled and destroyed all competition to preserve his empire.
Sterling invested in real estate.
Why make value judgments on the relative value of their contributions? They have both done well.
"[Fans are] not technically a lot of times savvy. They don't understand and they don't weigh issues the way that [I] weigh them."
Mike Dunleavy, Sr.
Gates
Gates spent a fortune building the OS system that made computers user-friendly. Software had to be built specifically on top of that platform which is why it became a bit of a monopoly but it was really a user created monopoly as it was the markets decision to give Windows a 95% market share.
DTS kicks out targeted minorities violating numerous housing acts. It was so bad he was court ordered to pay $5 million (the biggest fine ever) for his actions. http://sports.espn.go.com/espn/wire?section=nba&id=2225261
FA in 2010.
by ClipperChuck on Jun 10, 2010 2:32 AM PDT up reply actions
Ok Ayn Rand
"[Fans are] not technically a lot of times savvy. They don't understand and they don't weigh issues the way that [I] weigh them."
Mike Dunleavy, Sr.
Look
He’s a savvy businessman. He’s able to make money in his chosen profession.
"[Fans are] not technically a lot of times savvy. They don't understand and they don't weigh issues the way that [I] weigh them."
Mike Dunleavy, Sr.
Big fan of DTS's business
I didn’t mean to slight the amazing business success of DTS in any way. I’m actually in awe of him, and I have a running joke with my friends about the DTS real estate philosophy of Never Sell. Which, now that I think about it, seems apropos here. Another reason why this deal won’t happen. But I can say that I have my mom living in my first house, out in North Hollywood, and a big part of the reason for that is the DTS philosophy. I just wish I had the guts (and the money and smarts, of course) to go around and work his program, buy apartment buildings, fix them up in a reasonable manner, then use the equity to go buy more. Especially now. Can you imagine the kind of money DTS is making and the kind of deals his company is putting together in a buyer’s real estate market like this?
I didn’t go out of my way to applaud and credit DTS and his business, but I don’t think I slighted him either. By saying that Geffen is a guy who can have a real money conversation with DTS, I think I was complimenting both of them and giving DTS a lot of credit. My point was that DTS is pretty much a troll on the social side of things, while Geffen is the height of media glamour, in a somewhat quiet and reserved way. DTS could definitely us Geffen’s social cachet. And together they could turn the team into a truly exciting sports franchise very quickly, building on the base that exists.
But as I said, I don’t think it’s going to happen. Geffen can use his money to flirt with deals, but he doesn’t have to do this; he doesn’t need it. If Geffen is the rock in the deal, DTS is the hard place, running the Clippers with brilliant success from a financial standpoint, and waiting out success on the court. The interesting thing is that it’s a moment of transition in terms of the coach and cap space, so there’s all the more fuel for the fire. The story is flattering to DTS and the Clips. Good enough for me right now. Not quite ready to get optimistic yet. Just getting through the month. How many days until summer league starts?
by citizen zhiv on Jun 9, 2010 11:29 AM PDT up reply actions
Actually, you did slight DTS
You said that he’s so vain that he would pay Geffen millions just so that he could hang around him. I would disagree with that take because that’s just not DTS.
"[Fans are] not technically a lot of times savvy. They don't understand and they don't weigh issues the way that [I] weigh them."
Mike Dunleavy, Sr.
Yes...
Nine figures… a figure miscount on my part.
In this world, you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant. - Elwood P. Dowd
by Steve Perrin on Jun 9, 2010 12:28 PM PDT up reply actions
what if there were a buy-back option included for DTS?
something based on profitability, revenue growth, or simply if Lebron does or doesn’t sign that DTS could exercise an option to buy back control (i.e. 2%-51%) at some predetermined price? is that sort of thing possible within NBA ownership rules?
I don't see why it wouldn't be allowed
But those things generally go the other way. Earn outs usually pay the seller additional funds if the buyer and co hit certain EBITDA targets.
Why would Geffen agree to letting DTS back in the driver seat? Geffen might agree to an earnout, but not more equity (IMO.)
by Michael White on Jun 9, 2010 10:31 AM PDT up reply actions
Goodwill just means the difference between the purchase price and the net worth. DTS would likely require a fat premium, so figure Geffen’s Clippers would have a hearty goodwill figure on the books.
The earnout is negotiated by the two parties and it could be anything. The seller could say that if you make $1MM next year I’m entitled to another $100K. It’s just another way for the seller to squeeze out more cash in the future.
Sure the buyer could say no, that the premium paid is already enough (the goodwill) but it would be a point to be negotiated.
by Michael White on Jun 9, 2010 10:49 AM PDT up reply actions
Who needs a savior more?
The LA Clippers or the LA Times?
It’s a toss-up.
Do not worry. (Matthew 6:27)
Times by far
Clippers are going to be around for decades…
I give the Times 5 years max (in terms of print, they still will produce online publications)
There will always be demand for fish wrap and cage lining
At least the times has that going for it.
Do not worry. (Matthew 6:27)
Who cares if we are the 2nd team
Was it any better in San Diego. The Clippers have a bigger pool now than then. Changing the name to avoid the “stank”? Who cares! Both of these problems are solved by the same remedy: Build a winning reputation! Cuban did it for Dallas. Dallas was a stink and they had the three “J’s”! Like it was just said on here if you build a better product and reputation, change will come. That’s how the American culture operates.
Field of Dreams was right when it coined the phrase; “If you build it, they will come”. Fans will be fans no matter where they are. Yankee fans here, Houston fans in China, Barcelona and Manchester United American fans. It doesn’t matter where you are, its marketing. Winning is part of great marketing, hence LeBron’s apparent value.
by Takebb909 on Jun 9, 2010 6:43 AM PDT via mobile reply actions
Hmmm isn't it kind of sad...
…to think that on the day of DTS death, it is a possibility that there will be more people happy than sad?
…rough.
another clipper parade
in front of sterling led by darryl……SELL THE CLIPPERS, SELL THEM!
as funny at that would be - it would also be playing with fire...
attacking/embarrassing Sterling so publicly could have some bad repercussions….
denying Clipper Darrell entry into games for one...
Not to mention it would likely embolden the hardass to remove any sentimental feelings he may have for the team or its fans and treat the franchise even more coldly as a ‘business’. As in, go the cheap route with all FA signings, etc…
I truly think our playoff run a few years back changed how he views the Clippers.
Really
Does anyone really believe that Donald Sterling is going to sell the Clippers? well for all who have a pipe dream of believing this is going to happen, save yourself the heartbreak, it’s not going to happen, just like LeBron coming here, it’s not going to happen. we as Clipper fans and STH, need to write e-mails to Mr.Andy Roeser and express what you expect from him and the organization (and he will read and respond to them) we need a e-mailing campaign to let this organization know we are not going to settle for another lack luster season. And as for changing the culture of an organization,that comes with winning. Win and the fans and want to be fans will come,the sports reporters will come,and the talk about the Clippers challenging the Lakers for the number 1 spot in the pacific division, wil be the talk of the town.All thats needed is for the team to win. (Aroeser@clippers.com or call 310 862-6090) we all need to let him know we are not going to accept another terrible season. You can recruit and bring in all the big names you want,but if you don’t win, it don’t matter. A team with a squad of virtual above average players and not much more,can generate a ton of buzz and fans if they win, its all about winning. Let Mr. Roeser know we want a coach that will and can motivate a team to give their all each and every game,that’s the culture change,we just need to win.
No one really thinks DTS will sell....
…we are just hoping and dreaming.
Let us dream a bit will yah?
…I realize disappointment is right around the corner but it’s worth it.
If he sells its a win win situation for him.
He bought this team for about 13million which is chump change and its worth around
295 million. If he sells for about 200million the 51 % and gets to keep his front center
seat and it brings lebron to the clippers he would go from bum owner to the owner
who brought lebron to the clippers. If the clippers win a few championships the team
value would probably increase some where 500 or 600 millions and hes right back
where he started in terms of capital plus he would have an extra 200mil. Now that is
smart and its a win win situation.
Well you have to factor in inflation
30 years ago 13 million was a lot more money. The teams value went up since the NBA is far more popular now, with state of the art arenas, National TV deals and corporate sponsorships. But it definitely makes financial sense to Sterling to sell if he can get a premium for the Clippers but he appears to have some unusual affection for being a team owner, even if he rarely fields a winning team.
FA in 2010.
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