Category Archives: Los Angeles Clippers

Clippers’ Inglewood arena plans face MSG suit, could require taking homes by eminent domain

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The Inglewood city council, after voting last month to enter into an “exclusive negotiating agreement” with Los Angeles Clippers owner Steve Ballmer for a new arena, voted again on Friday to do the same thing, after getting a claim filed against it by the owners of Madison Square Garden on Wednesday for — you know what, let’s take this one step at a time:

  • Since February, there’s been talk that Ballmer wanted to build his own arena in Inglewood, possibly adjacent to the Los Angeles Rams’ (and Chargers‘) new stadium, so that he (and maybe Rams owner Stan Kroenke) could create his own entertainment district to compete with AEG’s L.A. Live next to the Clippers’ (and Lakers‘) current home at the Staples Center.
  • Inglewood councilmembers voted in June to approve that three-year negotiating agreement, which has no funding or operating details beyond “We wanna build an arena, let’s figure this out.”
  • Last Wednesday, MSG — which owns the Forum arena, formerly the home of the Lakers and now used mostly for concerts, and which is owned by James Dolan of New York Knicks and terrible singing fame — filed that claim for damages against Inglewood, claiming city officials asked them to give up their lease on parking lots across the street from the new football stadium site in April by telling them it was for a new “business-technology park.” Which, you’d think Dolan and his lawyers could have read the newspapers back in February to see this coming, but okay. MSG’s lawyers said if the city didn’t cancel the deal with Ballmer, they’d file suit.
  • Inglewood doubled down on Friday by voting unanimously to reauthorize the agreement with Ballmer, to meet any concerns that the June vote had taken place without public notice (one of the charges in MSG’s claim).
  • Friday’s vote was attended by 40 Inglewood residents protesting that the city was considering using eminent domain to force them off of their privately owned land to make way for the arena, or otherwise displace them by helping to gentrify their neighborhood.
  • Inglewood Mayor James Butts said no one was being displaced, that the arena would be built entirely on public land.
  • An MSG press spokesperson fired off an email to the Los Angeles Times saying that the land Ballmer is seeking contains hundreds of homes, apartments, and businesses, and “there is no question that residents would need to be displaced within this area.”

So, what the hell? The agreement itself includes this color-coded map by owner type:

The white parcels are the privately-owned bits of land, so, yeah, I’d say there should be some concern about eminent domain being used. In fact, I’d go so far as to say it’d be impossible to build an arena, let alone a surrounding entertainment district, without obtaining some private land.

Here’s what it looks like on Google Maps:

This is shaping up to be a big-ass mess, and that’s before we’ve even gotten into the question of who’s going to pay for it. Ballmer and Butts are going to need all of those three years, I’m guessing.

Ballmer, Inglewood enter “agreement” on new Clippers arena with pretty much no details at all

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Los Angeles Clippers owner Steve Ballmer has been talking for a while about wanting to build an arena of his own — with maybe some kind of L.A. Live–style entertainment district around it — in Inglewood, and now it looks like he’s taken a step closer, with the city voting today on opening talks for a new arena to be built adjacent to the new Rams and Chargers stadium:

The Inglewood City Council is scheduled to vote Thursday on an exclusive negotiating agreement with the Clippers to build a state-of-the-art arena on city-owned land. The 18,000- to 20,000-seat arena would be fully financed by Clippers owner Steve Ballmer, sources said. Ballmer, who is worth an estimated $31.8 billion, bought the Clippers for $2 billion in 2014.

So what does all that mean, exactly? “Exclusive negotiating agreement” means that Ballmer would have three years to work out environmental permits, which works well with his timetable in that he has a lease to play at Staples Center through 2024. As for how the financing would work, it sounds like Ballmer would pay for construction, while Inglewood would provide free land (some of which it may have to acquire, possibly by eminent domain), but there are many other variables — would Ballmer pay rent on the land? would this include land for the entertainment district as well? would he receive any tax breaks? who would pay to operate and maintain the building? — and the agreement itself doesn’t answer any of them, beyond a whole lot of legalese that comes down to “We’ll figure that stuff out later.” This is just the opening buzzer, in other words: Figuring out who’s actually winning, assuming this arena ever gets built at all, is still going to take a while.

Clippers mulling new Inglewood arena, this likely ends with Google owning all of sports, right?

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And speaking of data points for an arena arms race, now Los Angeles Clippers owner Steve Ballmer is reportedly interested in building a new arena adjacent to the Los Angeles Rams‘ new Inglewood stadium, because they want their own L.A. Live or something:

Representatives of Steve Ballmer and Stan Kroenke, two of the richest owners in professional sports, have had multiple discussions about the Clippers joining the Rams and Chargers in the sports and entertainment district Kroenke is building in Inglewood…

“It’s too soon to say it would be L.A. Live lite, but if an arena were to bring 200 nights a year, that’s a tremendous amount of foot traffic that would benefit all the ancillary properties,” said a person familiar with the discussions who asked not to be identified in order to speak frankly about the situation.

To reiterate what I just wrote about a fifth arena in the New York City metro area: Building more arenas in an already well-served arena market doesn’t really make much sense, since you’re just squabbling over how to divide up the existing pie. (An L.A. Live Lite is only likely to get customers by drawing them off from the original L.A. Live district by the Staples Center, or maybe from other entertainment options elsewhere in the L.A. area.) And Ballmer making eyes at Inglewood could still very easily be a leverage tactic toward when his Staples lease is up for renewal in 2024. But then, this is after all how capitalism is supposed to work: Investors are so desperate to grab a slice of the market that they throw around whatever money it takes to enter the game, which ends up driving down windfall profits for everyone and benefiting consumers. It seldom works that way, sure, but it still can, on occasion, when corporations are more interested in fighting over the spoils than in colluding.

If there’s one thing that watching American capitalism has taught me, it’s that the likely outcome here is for one side to buy the other — Philip Anschutz couldn’t literally buy the Clippers since he already owns the Lakers, but some kind of Anschutz-Ballmer-Kroenke sports management consortium isn’t impossible, if you could get everyone’s egos out of the way. Now there’s a thought: The only thing stopping us from entering a complete monopolistic hellscape, now that the federal government has all but declared corporate consolidation a national priority, is the inability of the super-rich to get along. Strange days, indeed.

Ballmer still talking new Clippers arena, glancing meaningfully at Staples Center lease

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Los Angeles Clippers owner Steve Ballmer went and said this this week:

“Last time I checked with any of my friends who are in the real-estate business, you’d better have an option than just going back to your current landlord hat in hand and saying, ‘Please, please, please, sir, please give me the chance to play in your building again.’ So, yeah, we’re going to have real options. We’re out sort of putting together those options today.”

This is being interpreted as an intention to build a new arena just for the Clippers by the time their Staples Center lease expires in 2024, and clearly Ballmer is going to be investigating that. But it’s also clear — both from Ballmer’s statement and from simple economics — that the Clippers owner is looking to create leverage so that he can negotiate a better lease on his current home if that looks like a better option. I.e., same as it was when he first said this back in August.

Ballmer has said he won’t move the team out of L.A., so it looks like his only two options are to spend maybe $1 billion on a new arena just for himself somewhere in SoCal, or to use that threat to extract more money from his Staples lease. This is his right, and more power to him — at least assuming he doesn’t try to play cities off against each other to try to get public subsidies to pay for his new home, which has proven tough in California — but let’s name our threats accurately, shall we?

Ballmer to seek new L.A. site for Clippers in 2024, maybe

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Been taking some time away from this site to work on other projects, but hey, it’s summer, right? Nothing new ever happens now, certainly not anyone dropping news of an entirely new arena plan out of nowhere—

Clippers owner Steve Ballmer has begun to explore potential sites for a new Clippers arena, multiple NBA sources said.

What the whaaaa? The Clippers have long had one of the most stable arena deals in sports, playing in the 17-year-old-but-none-dare-call-it-anything-but-state-of-the-art Staples Center alongside the Lakers and Kings. According to the ESPN report, Ballmer is sick of playing third fiddle to the other two teams, and wants to explore whether he can do better by going it alone:

A new facility owned and operated by the team would afford the Clippers greater power to maximize earning opportunities, from sponsorship to licensing fees. As the owner of Staples Center, AEG retains control over naming rights, the business operations of running the facility for events and other substantial revenue streams like concessions.

Well, yes. You know what else a new facility owned and operated by the team would come with? Around a billion dollars in construction debt, that’s what. And while L.A. is conceivably one of the few places where you could make a good chunk of that back on naming rights and maybe seat license sales — i.e., the Rams playbook — that’s quite a hefty nut to pay off before you start enjoying all your maximized earning opportunities. Plus, L.A. is already bursting at the seams with existing arenas, so it’s not like Ballmer would have an easy time filling dates at top dollar on non-basketball nights.

(I’m not even going to get into the possibility of Ballmer asking for public money to help out, because it’s L.A. — or possibly Inglewood — and he’d have to hold a public referendum, but we probably shouldn’t rule it out entirely, because America.)

Of course, it’s also possible something else is going on here. The Clippers’ lease doesn’t expire until 2024, so whatever Ballmer is up to, it has a long lead time. So this could be a matter of exploring his options, or leaning on the Staples Center to give him a revised lease (or lease extension) so that he doesn’t explore his options, or doing whichever he decides is most lucrative once he gets there — i.e., the Islanders playbook. Only one thing’s for sure: He’s not going to Seattle.

“The Clippers are not going anywhere, ever,” Ballmer said. “I will die owning the L.A. Clippers in Los Angeles.”

Or maybe that just means that Ballmer has an incurable disease and less than eight years to live. Parsing owner statements is endless fun!

Ballmer reportedly wins $2B bid to buy Clippers, entire sports world turns upside-down

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Okay, hands up everybody who saw this coming:

Los Angeles Clippers owner Donald Sterling does not have the authority to stop a $2 billion sale of his team because he has been determined to be mentally unfit to make decisions related to the family trust, a person familiar with the situation told USA TODAY Sports.

The Sterling Family Trust owns the team, with Donald and his wife Shelly each owning a 50% share. The trust spells out provisions and procedures related to the mental capacity of the trustees, and Donald Sterling did not meet the standard in a determination by experts, giving his wife sole decision-making power for the trust, the person said.

Shelly Sterling reached a deal Thursday with former Microsoft CEO Steve Ballmer to sell the Clippers for a record $2 billion.

That’s pretty … I guess “crazy” would be an insensitive way of putting it, huh? Let’s go with “unexpected,” though that seems a bit understated if the denouement of this whole Clippers mess is that everyone involved gets to avoid messy lawsuits and ownership votes to eject Sterling because of a family trust’s private psychologist.

Easier to designate as madness, meanwhile, is that $2 billion sale price. (As yet unconfirmed, but reported by multiple sources.) As I discussed yesterday over at Sports on Earth, it was expected that the Clippers were going to sell for a record price, given escalating sports team values, their presence in the mammoth L.A. market, and the fact that for once they aren’t league doormats anymore. But consider that the previous record, set just last month, was $550 million for the Milwaukee Bucks; and that earlier this year Forbes estimated the Clippers to be worth just $575 million, with the NBA’s most valuable team, the New York Knicks, clocking in at just $1.4 billion; and that the only sports franchise ever to sell for $2 billion was the L.A. Dodgers in 2012, a team that plays in a more popular sport and earns more than double the Clippers’ annual revenues, a figure that will likely hold true even after the Clips renegotiate their TV deal in 2016; and you’ll be forgiven for wondering whether Ballmer shouldn’t have his head examined as well.

The leading theory for what the hell just happened is what you might call billionaire glut: Thanks to the U.S. economy’s increasing propensity for concentrating all its wealth in a tiny number of people, there are a heck of a lot more rich guys like Ballmer in the market for sports teams these days, and not an appreciably larger number of sports teams for sale. That imbalance of supply and demand drives prices through the roof, with would-be hoops magnates bidding each other into oblivion in order to find something to buy with their money. (It’s not too unlike the real estate market in places like Vancouver, where Asia’s one-percenters have created a housing bubble by buying up condos left and right simply as a place to park their money — though you could argue that owning an NBA team, even the Clippers, is more fun than an apartment in Vancouver.) It has to stop somewhere, and it could yet be that $2 billion for the Clippers will be seen as an outlier — even Nate Silver, in his regression-analysis-driven projections of the effects of billionaire glut, could only come up with a Clippers value of $580-950 million — but it does help indicate why sale prices seem so suddenly out of whack with actual team revenues: These are rich men’s toys, yes, but they’re exclusive toys, and there are a lot more rich men wanting to be the ones to find them under their Christmas tree.

The fact that it’s Ballmer who is Clippers owner-in-waiting, meanwhile, means that he’ll no longer be part of Chris Hansen’s proposed ownership group in Seattle, where he was the moneybags behind Hansen’s hey-kids-let’s-put-up-an-NBA-team enthusiasm. Hansen’s supporters are trying to put a happy face on this, but with no team, no deep-pocketed partner, and an arena deal that expires in 2017, things aren’t looking too rosy right now. Though maybe once the NBA sees what nutso prices those billionaires are willing to pay for teams, they’ll rethink expansion.

The week that Newt Gingrich called for non-profit sports team ownership

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And then there’s this:

Yes, that’s the Newt Gingrich, not Fake Newt Gingrich or The Real Newt Gingrich or any of those. Apparently the Donald Sterling scandal was enough to get the guy who thinks that the solution to corporate tax dodging is to lower corporate taxes to a rate they won’t cheat on to decide that for-profit ownership is wrong for the Los Angeles Clippers, because hoops belongs to the people, man. (Though given Gingrich’s past history with not-for-profits, maybe he just means a shell corporation that would pay a local rich guy to run the team.)

Anyway, it all gave ThinkProgress’s Travis Waldron a good opportunity to go on about the benefits of public and not-for-profit ownership of sports teams, which can only be a good thing:

Even if you don’t care how many games the Clippers or any other privately-owned team wins, even if you hate sports, there are benefits to fan ownership. A fan-owned team has direct ties to its community, and so it’s next to impossible that the team could pick up and move to a new city if its current home decides not to give it massive public subsidies for a new stadium. That both avoids the ugly problems that occur whenever cities fork over hundreds of millions of dollars in subsidies and keeps teams from playing hop-scotch to new cities. A private owner would have moved the Packers out of Green Bay decades ago. Instead, they remain in a tiny town in Middle-of-Nowhere, Wisconsin.

Of course, the Packers did manage to get Green Bay (actually Brown County) to fork over $295 million in subsidies in 2000 by threatening to play hopscotch to a new city (or to have the NFL force them to move, or something — the threat was never quite clear), so it’s not a perfect point. But still, public ownership does have its benefits.