Drafts of the Los Angeles Clippers' sale bid book show exactly how much Steve Ballmer is willing to overpay for the team. The bid book was entered as an exhibit by Shelly Sterling's lawyers in a trial in California probate court to determine whether she should have the right to sell the team without her husband, Donald. Ballmer's $2 billion final bid is 12.1 times the expected 2014 revenues of the team, according to the numbers given to the bidders by Bank of America, which conducted the sale on behalf of the Sterling trust. The document was introduced into court Tuesday and subsequently obtained by ESPN. A person with knowledge of the sale confirmed that bidders were given these documents. The book, called "Project Claret" so as not to give away on the cover sheet that these numbers are indeed the financials of the Clippers, reveals that the team is projected to finish the year with $62.3 million in revenues from ticket sales, $25.8 million from its local cable contract and $24.1 million in additional team revenue. The Clippers are also projected to receive $52.7 million on the season in shared national league revenue, according to the document. After taking away player payroll costs, total operating revenue for the 2013-14 season is projected to be $100 million. Valuation multiples are usually based on total revenues, so the $164.9 million before player costs are extracted equals more than 12 times less than the $2 billion sale price. "No team in the history of sports has sold for six times total revenues, so that should give you an idea of how crazy this purchase price is," said a sports banker who was not involved in the transaction. Even according to Bank of America, no team has been purchased for more than five times its total revenues. Before the bidding began, Bank of America valued the Clippers between $1 billion and $1.3 billion, double the $550 million sale price of the Milwaukee Bucks, which had set a league record for a sale price just months before. The document cites a five-year mean of teams that have been purchased during that time at a sales price of 3.4 times total revenue.
Bid book shows Ballmer overpaying
ESPN Los Angeles | Jul 23