The LA Clippers will become the most expensive franchise in NBA history after a California superior court judge approved the $2bn (£1.2bn) sale to Mircosoft's former chief executive Steve Ballmer.
Until now, the largest sale price for an NBA franchise was just $550m - the cost of the Milwaukee Bucks and Washington Wizards takeovers in 2014 and 2010 respectively.
As recently as January, Forbes valued the Clippers at a similar price of $575m. NBA heavyweights the New York Knicks, the Los Angeles Lakers and the Chicago Bulls, who between them have won 24 championships (the Clippers have won none), have been valued at $1.4bn, $1.35bn and $1bn respectively.
Smashing an NBA sale price record would be more understandable if the franchise in question were one of the aforementioned powerhouses of the sport, yet the Clippers are more renowned for failing to escape the shadow left by their LA neighbours, the all-conquering Lakers. The $2bn fee has left many accusing Ballmer of overpaying for his new franchise.
It was revealed by ESPN last week that the Bank of America valued the franchise at $1bn and that the unprecedented fee paid by Ballmer is just over 12 times the Clippers’ expected 2014 revenues.
The hefty sum will be the second highest ever paid for a sports team, narrowly behind the $2.15bn paid by Guggenheim Baseball Management for the Los Angeles Dodgers in 2012. The Clippers deal will surpass the $1.47bn paid by the Glazer family for Manchester United in 2005. The California-based franchise will also become the only basketball team to feature in the top 10 priciest sporting takeovers.
Just six sports teams in the world have a higher Forbes valuation than the $2bn being stumped up by Ballmer, the 19th richest man in the world. The biggest powerhouses seemingly reside in European football, with Real Madrid, Barcelona and Manchester United topping the list.
The New York Yankees (baseball), the Dallas Cowboys (American Football) and the Los Angeles Dodgers are the only American sports teams with a Forbes valuation higher than $2bn.
Yet while Ballmer’s bid is undoubtedly bold, there are a number of factors that encourage investment in the NBA. In 2011, a collective bargaining agreement between owners and players saw players’ share of revenue drop from 57 to 50 per cent while the NBA is hoping to double its TV rights deals with ESPN and TimeWarner (currently worth around $930m a year).
Furthermore, there is reason to expect increasing global interest in the league. For example, according to the Chinese Basketball Association, there are currently 300 million people that play the sport in China.