How Much Were These Sports Teams Sold For?
The pending sale of the Los Angeles Clippers to Steve Ballmer has dominated headlines this past month not only because of the controversy surrounding previous owner Donald Sterling, but also because of the jaw-dropping price of $2 billion.
What is the significance of paying $2 billion for a franchise?
What is the "normal" price for a team in the NBA? The NFL? Major League Baseball?
How is it that two teams in Los Angeles have been sold for $2 billion in the past three years, while an NFL team once went for only $100?
As it turns out, what goes on in the front office is often just as fascinating as what happens on the field.
Team: Los Angeles Clippers
Price: $2 billion
Year: 2014 (Pending)
Buyer: Steve Ballmer
Estimated Current Value: $575 million
The Clippers and Ex-Microsoft CEO Steve Ballmer stunned the NBA when they reached a recent deal for Ballmer to purchase the franchise from Donald Sterling for a staggering $2 billion. This price would shatter the previous record for the sale of an NBA franchise (a figure and team that might surprise you on the next slide). The Clippers are currently valued at only $575 million, which places them outside of the top 10 among NBA franchises, and nowhere near the top in their own city.
Looks like things won't turn out so badly for Sterling after all.
Team: Milwaukee Bucks
Price: $550 million
Buyer: Wesley Edens and Marc Lasry
Estimated Current Value: $405 million
The magnitude of the proposed sale of the Clippers does not become fully clear until you take a look at the previous most expensive sale in the history of the NBA: Earlier this year, the Milwaukee Bucks were sold to Wesley Edens and Marc Lasry for a whopping $550 million—pocket change compared to the Clippers deal. It's worth noting that while the Bucks sale was the most expensive ever, the team is currently estimated as the least valuable in the NBA.
Team: Indiana Pacers
Price: $11 million
Buyer: Herb Simon
Estimated Current Value: $475 million
No NBA team was sold at a cheaper price than the Indiana Pacers just over 30 years ago. After spending only $11 million on the team in 1983, owner Herb Simon has since turned a monumental profit: While inflation has helped a bit, making $475 million off of an $11 million investment is a pretty good deal—and has made Simon one of the richest men in the NBA.
Team: Los Angeles Dodgers
Price: $2 billion
Buyer: Magic Johnson, Guggenheim Partners
Estimated Current Value: $2 billion
Two years ago, Magic Johnson and his group, the Guggenheim Partners, made a huge splash by purchasing the Los Angeles Dodgers from Frank McCourt for $2 billion. This more than doubled the previous record sale for a baseball team, which was set by Tom Ricketts and family when they purchased the Chicago Cubs for $845 million in 2009.
The purchase didn't just set a baseball record, however—no sports team in the world had ever gone for such a high price. The Dodgers topped world record holder Manchester United and the North American record holders, the Miami Dolphins.
New York Yankees
Team: New York Yankees
Price: $10 million
Buyer: George Steinbrenner
Estimated Current Value: $2.5 billion
If the Dodgers sold for $2 billion, the New York Yankees must have gone for a comparable amount, right? Not exactly. When George Steinbrenner purchased the Yankees back in 1973, he spent only $10 million—less than Herb Simon paid for the Pacers 10 years later (granted, without adjusting for inflation) and less than one percent of the amount Magic Johnson paid for the Dodgers.
Turned out to be a pretty decent investment for Steinbrenner, who managed to turn the Yankees into the most valuable sports team on the continent with a net worth of $2.5 billion.
Team: Oakland A's
Price: $180 million
Buyer: Lewis Wolff
Estimated Current Value: $495 million
Baseball's most valuable franchise went for $10 million in 1973, and one of its least valuable franchises went for $180 million a few decades later. Even adjusting for inflation, the Yankees $10 million purchase was the equivalent of just over $50 million in 2005, a third of what the A's went for—a testament to the change in market for sports franchises over the years.
The A's, however, are valued at almost $2 billion less than the Yankees. The financial shortcomings of the A's were made famous when Moneyball was published in 2003 and then turned into a feature film in 2011. Compared to the Yankees' $225 million spent on annual player expenses, the A's spend only $81 million, a statistic that puts Oakland at a constant disadvantage on the baseball field.
Team: Manchester United
Price: $1.47 billion
Buyer: Malcolm Glazer
Estimated Current Value: $2.8 billion
Before the Dodgers and Clippers sales of the past few years, the most expensive purchase of a sports franchise was Malcolm Glazer's $1.47 billion takeover of Manchester United in 2005. Glazer, also the owner of the NFL's Tampa Bay Buccaneers, initially bought 2.9 percent of the team's shares in 2003.
Over the next two years, he gradually increased his stock in the team before taking over completely by buying 75 percent of shares in 2005. This was much to the chagrin of Man U fans, many of whom, according to Richard Goldstein of the New York Times, "ripped up season tickets and threatened to boycott the team’s merchandise, not appeased by a family statement saying the Glazers were 'avid Manchester United fans.'" Glazer passed away in May, leaving his teams to his family.
Team: Miami Dolphins
Price: $1.1 billion
Buyer: Stephen Ross
Estimated Current Value: $1.1 billion
The Dolphins became the most expensive team ever purchased in North America and the second-most expensive team ever purchased in the world when they were sold to Stephen Ross for $1.1 billion in 2008. This amount has since been dwarfed by the Dodgers and now, it seems, the Clippers.
Since buying the team, Ross has worked hard to make football relevant in Miami and is currently planning to invest $400 million of his own money to renovate the stadium with the hopes of bringing the Super Bowl to Miami in 2018.
Team: Pittsburgh Steelers
Buyer: Dan Rooney
Estimated Current Value: $1.1 billion
In stark contrast to the billion-dollar sale of the Dolphins, the storied Pittsburgh Steelers were sold for only $2,500 way back in 1933. Its owner, Dan Rooney, was born in 1932. Seem odd? Rooney's father, Art Rooney, founded the team in 1933 as a gift for Dan on his first birthday.
While most kids get a new onesie, Dan Rooney got himself a football team, which is still owned in the family today—only now, that $2,500 birthday gift has transformed into a $1.1 billion operation.
Team: Chicago Bears
Buyer: George Halas
Estimated Current Value: $1.3 billion
Ever wanted to buy a football team for less than it costs to take your family out for a nice dinner? In 1920, George Halas, one of the founders of the NFL, paid $100 to purchase the Chicago Bears from A.E. Staley. Almost a century later, ownership hasn't changed, as Halas eventually passed the reins down to his daughter. Today, the team is worth $1.3 billion, making that $100 among the most profitable ever spent.
New Jersey Devils
Team: New Jersey Devils
Price: $320 million
Buyer: Josh Harris
Estimated Current Value: $320 million
The range of value in the NHL between the teams at the top and bottom of the list is absolutely staggering. The New Jersey Devils were the most recent team to be sold, going for $320 million last year, placing them around the middle of the pack. The Toronto Maple Leafs are currently the most valuable NHL club, worth $1 billion—the only billion-dollar team in the league. On the other end of the spectrum, however, the St. Louis Blues are currently valued at only $130 million.
If you're lucky enough to win the lottery in the next few years, this list should give you a decent idea of how you might be able to spend it. But if you're like the rest of us and barely have a few bucks to spare—well, there's always the Bears.
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