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Considering a $131 million payroll and focus on winning it all this season, we’ll never know if the Clippers projected to be a profitable team this season.
However, start a season with the NBA’s controversy with China and suspend it near the end with the coronavirus, and the Clippers are going to take a big hit.
“It’ll be eight digits,” he said. “Now you’ve got to start with what we were either going to make or lose before the season started, but net, it’ll certainly be an eight-digit loss for us…
“We’re being diligent about continuing to pay our employees,” he said. “We’re trying to take care of our smaller vendors. We had a t-shirt vendor we had $100,000 committed to for playoff t-shirts. I think it’s important that we pay that money, put it down now, and see what can happen over time since we are in a better position.”
There should be a few notes of context here. First, Ballmer is worth an estimated $50 billion, he is not going to go hungry because of this.
Next (and this is the biggie), the year-over-year losses or profits for a team do not take into account the rising value of the franchise — which has spiked even after Ballmer bought the Clippers for a then-record $2 billion. Forbes estimates the Clippers are currently worth $2.6 billion, which means the Clippers have gained at least $600 million in value in the five years Ballmer has owned the team. Even if the Clippers lost $10 million every year that’s still a massive profit when he sells.
Still, losing $10 million or more is a lot of money.
What Ballmer is talking about is amplified across the NBA and a lot of teams — ones in smaller markets with owners whose pockets are not as deep — are taking big hits, too. It’s the same for the owners of a lot of businesses right now, the coronavirus has taken a real toll on the potential profits and hit the business model hard. It’s also taking a toll on people who work at arenas, and restaurants and bars near arenas, and many other businesses tied to the NBA as well.
Ballmer and his wife Connie have tried to help by donating $25 million to COVID-19 causes.
Steve + Connie Ballmer, through the Ballmer Group, have pledged more than $25M to help Seattle, SE Michigan, LA w/ COVID-19 crisis. That includes $10M to Univ. of Washington Medicine’s Emergency Response Fund to speed up testing for COVID-19 vaccine, according to Ballmer Group.
— Ohm Youngmisuk (@NotoriousOHM) March 27, 2020
Steve Ballmer: Clippers will now lose at least $10 million this year originally appeared on NBCSports.com