If Clippers are for sale, what's the franchise worth?

Golden State Warriors v Los Angeles Clippers - Game Five

Los Angeles Clippers hold up signs referencing the Donald Sterling situation before the game with the Golden State Warriors in Game Five of the Western Conference Quarterfinals during the 2014 NBA Playoffs at Staples Center on April 29, 2014 in Los Angeles, California.

 

As the next step in the public punishment of Los Angeles Clippers owner Donald T. Sterling, the NBA says it’s going to try to force him to sell his team. But this isn’t exactly a fire sale.

The traditional profit-focused reasons for buying a sports franchise are well established says Michael Leeds, a sports economist at Temple University. “I mean, you can go back to the 19th century," he says. "People would buy baseball teams because they owned a tavern nearby and they wanted to sell their beer.”

Nowadays, Leeds notes, owners are more likely to buy shares in media networks, but he says the payoff for ownership can come in different forms.

“When you own a sports franchise, you join a very exclusive club," he says. "As George Steinbrenner once said, 'Before I bought the Yankees, I was just some ship builder in Tampa.'”

Leeds says there’s a rush that comes with seeing your name in the paper, and some buyers are willing to pay a premium for that. Celebrities from David Geffen to Oprah Winfrey are reported to be interested in buying the Clippers. And all that buzz can drive prices up. While Donald Sterling  bought the Clippers for only $12 million dollars more than 30 years ago, one currenet estimate is $575 million

 

 

 

 

About the author

Sally Herships is a regular contributor to Marketplace.

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