One, I didn't say he would celebrate it. But it would still be worth it, as he'd still be making the revenue during those years on top of that.


Bottom line, it's worth it if he can make money on it. Basic principles here. And I think the value of the org will go up over time.

Hockey...

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Seattle Clouds.

If the Bucks can sell for $700M a team in Los Angeles shouldn't have a problem getting $2B.

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Be well

GO BEARS!!!

It wouldn't be worth it though. That is a terrible return on investment, even if you include the $30 million in profit.
So basically your point is that as long as you think you will make money on something you aren't overpaying? So, it's impossible to overpay for a business unless you are intentionally trying to lose money?

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You do not talk to me like that! I work too hard to deal with this stuff! I work too hard! I'm an important member of the CSFMB! I drive a Dodge Stratus!

Do you really think the Clippers are more than 2x as valuable as the Cubs?

This was just a guy with more money than he knows what to do with buying a new toy. There is nothing wrong with just saying that.

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You do not talk to me like that! I work too hard to deal with this stuff! I work too hard! I'm an important member of the CSFMB! I drive a Dodge Stratus!

This is not as far fetched a situation as you present

5% in our current climate is not bad at all

It sounds like he only outbid his closest competition by 20%. Besides it's LA and there is a new TV deal in the future. IIRC the Cubs turned down an offer of $1.2B from Cuban.

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Be well

GO BEARS!!!

If I offered you guys this business opportunity, would you take it?

Give me $200,000 for my company which makes $1,000 a year in profit. Now, keep in mind, I'm telling you that you should expect to be able to sell the company for more than $200,000 eventually. However, you have to trust me on that.

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You do not talk to me like that! I work too hard to deal with this stuff! I work too hard! I'm an important member of the CSFMB! I drive a Dodge Stratus!

That is 3.3%, and based on the last 3 years that isn't that good.

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You do not talk to me like that! I work too hard to deal with this stuff! I work too hard! I'm an important member of the CSFMB! I drive a Dodge Stratus!

Just about every sports owner has taken that gamble and won.

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Be well

GO BEARS!!!

"only" 20%?

It's actually 25% I believe since his offer was $400 million over $1.6 billion.

Those things you mention are already built into the price.

The Dodgers sold for $2 billion. Do you really think the second rate LA basketball franchise is worth slightly less than them?

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You do not talk to me like that! I work too hard to deal with this stuff! I work too hard! I'm an important member of the CSFMB! I drive a Dodge Stratus!

But I don't believe most of them looked at it that way. It was incidental. Like a guy who bought a house for $100,000 in 1995 and sold it for $500,000 in 1999. It wasn't his geniusness. He just wanted a place to live and the market went wild. I think most owners just want to be big shots and own a team and they are just hoping not to get killed. If Ballmer was looking to make money he'd be better advised to invest in some new tech. I'm sure he has plenty of access.

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Ecclesiastes 5:8

Not really. Most owners bought in a different climate.

Of course those that bought 20-30 years ago made a ton of money. The entire world of sports changed.

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You do not talk to me like that! I work too hard to deal with this stuff! I work too hard! I'm an important member of the CSFMB! I drive a Dodge Stratus!

What? What's 3.3% ?

You can keep arguing the value. All Im saying is making 5% is nothing to scoff at.

My math was off. It's actually a 1.66% return per year.

5% gain over 3 years is a pretty horrible investment. You'd be quite upset if your 401k had a 1.66% return on investment over 3 years except for the rare periods where any gain is a good.

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You do not talk to me like that! I work too hard to deal with this stuff! I work too hard! I'm an important member of the CSFMB! I drive a Dodge Stratus!

Why are you breaking it down by year? It's an investment.

With the numbers involved many people would be happy with that. That's not close to a "horrible investment"

Its not like old days where there were many places to safely assume you could make few percentage points by just playing it safe. 5% is not guaranteed to anyone. And obviously you could actually lose money.

If 5% profit is not a good investment in your world, you should be trading full time.

welp, donald sterling sure taught the kids in 1-877-KARS-FOR-KIDS sponsored schools an important lesson: if you're "sitting on a fucking goldmine" (- rad rod blag-o-matic) and happen to ignite a media shitstorm by doing something not technically illegal but very very uncouth, then when all of your rich contemporaries get together to force you out for the PR (cuz lord knows the NBA has a problem with hiring minorities in the first place: duh) be sure to lawyer up to the gills, utilize the ex-wife who's suing your jump-off, and you too can get ~1.4bil over market value for your club simply because you HAVE TO GO.

i bet you there'll be a good segment with bomani jones on dan lebatard's radio show about this endgame here, cuz if you haven't heard it bomani knows whats up when it comes to donald sterling and he had the same reaction as me when this news broke: *shrug*.... it's donald sterling. this is par for the course and not even in the top 50 of racist things he's done in his life.... and oh btw, his racism reaps immense profits for him so he just got caught with his hands in the cookie jar, ironically like the people he's spent a lifetime working for cash.

so i hope we all learned an important lesson about social justice, fellow warriors: kick and scream and shout and pout all you want.... but in the end when a "solution" is presented to the giant "problem" which you HAVE TO GET RID OF (in this case, get donald sterling out of the NBA pronto) those REALLY. SMART. PEOPLE. who MONETIZE. EVERYTHING. are going to think up a way to help the rich asshole get a golden parachute on his way out. you know deep down somewhere a bunch of these guys think along the same lines, just not in a recorded-for-public-consumption way..... i mean hell, at this point with donald ~1.4bil in the black compared to market value is it fair to wonder if this whole thing was just a giant conspiracy to force a sale in such a way that an immense profit would be reached via using "social justice" to force "a really good person" to do "whatever it takes" to get sterling out of the NBA, in this case, make him a $2bil offer he can't refuse?

seriously.... life as a whole is a giant pyramid scheme, and naturally we're all at the bottom. those at/near the top will always end up way better off than the rest of us. if you think donald sterling has some juice here to pull this off, think of those oil sheikhs out in the middle east who get really bored and occasionally do things like, example, grab a random peasant off of the streets.... torture him for awhile then str8up behead him..... while taping it. get dragged into court with the video of the beheading getting introduced as evidence.... and STILL get off because seriously, the justice system (like taxes) is for poor people.... not our benevolent masters who once again i thank very very much for allowing me to live in their world. i reckon if jesus christ were walking the earth he'd be thinking the same thing, because this ain't his daddy's world anymore. if god pissed off kris jenner i bet you she could get him blacklisted for the rest of eternity because money talks and all that *wanking motion* religious bullshit walks.

so yeah, in the end, welp, social justice has been served and go figure the evil rich asshole at the center of it all ended up making a ton of money because he was caught being racist, whereas if he just wanted to sell the clippers willy nilly without the added impetus of "SOMEONE NEEDS TO STEP UP AND DO WHATEVER IT TAKES TO GET RID OF THIS GUY" he wouldn't have made 1.4bil. so i hope that's a lesson to you future committee-of-300ers out there: use the media machine and social justice mechanisms to your advantage because HOT DAMN it's like my guy rod said at the beginning of the post: he was sitting on a fucking goldmine here, especially once sterling established that he HAD TO GO NO MATTER THE COST he got his team of REALLY. SMART. LAWYERS. together to make sure that his going was worth no less than 1 billion dollars over market value.

and now if he's clever he'll go buy manchester united from the glazers or something and send elgin baylor on over to get the red devils back on track in this post-SAF era.... =D

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Rick, you're looking at this wrong. Look at it more as a product than a business opportunity. If I buy a Honus Wagner or whatever baseball card for $100,000 and at any point and time I can sell it for that much, then it was worth that, especially if I really love baseball cards and I now own one of 30 left in the world. Just because I won't be making a ton of profit doesn't mean it wasn't worth it. With stuff like this there is intangible ROI too, which inflates the price and is something Forbes doesn't account for. JORR touched on it with his post about these guys being big shots.

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Fare you well, fare you well
I love you more than words can tell
Listen to the river sing sweet songs
To rock my soul

this is going to end well. perhaps the most admirable trait about b-rick is that when you calmly tell him that he isn't 100% correct he's always going to stop and re-think his position and make careful consideration to what you said. rick is the great usurper in that regard: he's always taking external conflicting opinions to heart and figuring out ways to homogenize everything into the perfect synthesis of compromise, as opposed to doubling down in writing a whole bunch of righteous pap that is the fancy upper-middle-class reasonable man of intelligence and perspective way of saying "NUH UH"

anyone have some popcorn?

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That is why I am breaking it down by year. That is an investment. I could double my money in 50 years by buying a 50 year bond. That doesn't mean it was a good investment even though I had a 100% profit.
It isn't over 3 years. A 5% profit over one year is good depending on the year and economic climate. 1.66% a year is rarely good and certainly isn't today. If everything crashes, then it's ok, but keep in mind that the Clippers get a large impact from the economy faltering too since they are a luxury item.

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You do not talk to me like that! I work too hard to deal with this stuff! I work too hard! I'm an important member of the CSFMB! I drive a Dodge Stratus!

I've got a response in my head, but someone else explained why they overpaid already!
You just explained why they overpaid. Thanks!

As a business, he overpaid. He may get someone to eventually overpay too. Otherwise, it's literally impossible to overpay for any business unless you think you'll lose money.

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You do not talk to me like that! I work too hard to deal with this stuff! I work too hard! I'm an important member of the CSFMB! I drive a Dodge Stratus!

Investments are not beholden to your personal time limits.

Im not saying there arent better trades, but you're acting like a profit of 100 Million dollars in 3 years is a loss

No matter how many years, a 1.6% yearly return on investment is horrible. That type of investment would be lucky to beat inflation.
It kind of is though. The standard for good investment doesn't start at 0.1% gain per year.

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You do not talk to me like that! I work too hard to deal with this stuff! I work too hard! I'm an important member of the CSFMB! I drive a Dodge Stratus!

You're acting like there is no such thing as a loss. 0% is not the ground.


A 100 Million dollar profit is not a loss under any circumstances

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I'm going to bounce from the spot for awhile but I will be back at some point to argue with you about this hoops stuff again. Playoffs have been great this season. See ya up the road.

I'm out.

In this hypothetical though, he does have a chance at a loss. He may end up selling the Clippers for $1 billion one day. It's all factored in. That's why if he expects to make 1.6% percent per year he would be better off putting his money into something else where he can expect better results.
http://en.wikipedia.org/wiki/Opportunity_cost

If you expect your 401k to have a yearly 1.6% return on investment you need to make changes to it immediately.

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You do not talk to me like that! I work too hard to deal with this stuff! I work too hard! I'm an important member of the CSFMB! I drive a Dodge Stratus!

So he might lose 50%, but if he makes 5% that's a bad investment?

As usual you're going black/white

There is middle ground between "Could have made more elsewhere" and "loss"


A 401K is a completely different thing with all kinds of restrictions. Has zero to do with this kind of investment.

Thanks for the wiki link


Like I said, if you know of automatic ways to make more than 5% you should be rich by now.

AEG owns the arena, AEG owns the Kings and some of the Lakers. The Clippers are just a tenant, a tenant who lies around all day and smells bad.

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Just because somebody pays $2 billion for something doesn't mean it's automatically worth that. People overpay for things all the time. Assets have an intrinsic value separate from what 1 person may be willing to pay for it. That value in this case is probably somewhere between $750 mil - $1 billion.

It's worth an extra $1 billion to this guy for whatever his reasons may be - ego, whatever.

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You know me like that.