Sunday, June 1, 2014

Billionaires of Basketall

What is it with tech billionaires and basketball?

It seems as if, once one of them reaches a certain gargantuan level of net worth, he looks in the mirror and says to himself, "I think it's time to buy a basketball team."

There are a number of these people -- driven, focused men who LOVE basketball.  When a team comes up for sale, they end up competing with each other to buy it.  This bids up the prices, but it doesn't seem to deter many of them.

I do not know why tech guys are drawn to basketball.  Maybe it is because so many of their friends own teams.  Or maybe they see buying and owning basketball teams as another fun way to keep the competition going after they have amassed fortunes the size of some countries' gross domestic products.


Steve Ballmer
Steve Ballmer is the latest.  He plans to pay as much as $2 billion, more than three times the last highest price ever for a basketball team, to buy the Los Angeles Clippers, which has the worst won-lost record in American sports history.

(To be fair, the Clippers now appear to have a good coach and talented players who are actually interested in, you know, playing basketball.)

Ballmer is the recently retired/resigned CEO of Microsoft.  He is said to be worth $20 billion.  He certainly can afford to pay top dollar for the Clippers.

A couple years ago, Ballmer tried to buy the Sacramento Kings.  At that time, his plan was to move the team to Seattle, where he lives.  He lost out to a buying group led by another rich tech guy. 

Larry Ellison
To win the Clippers, Ballmer had to bid more than a group that included Larry Ellison, the founder and CEO of Oracle.  Ellison's net worth is at least twice as great as Ballmer's.

In fact, it was Ellison's fourth attempt to buy into basketball.  He went after the New Orleans Hornets in 2010, then the Memphis Grizzlies and, last year, the Golden State Warriors.

Rich as he is, Ellison could outbid anybody for any team.  And, let's remember, he spent an estimated $100 million for the design and construction of a dazzling and strange yacht that came from behind, 7-1, to win the Americas Cup last year.  So we know he is competitive.

But when it comes to basketball, Ellison is the rare billionaire who has demonstrated that there are some prices he will not pay.

Interestingly, Ellison, like Ballmer, wanted to move a team -- the Grizzlies -- from Memphis to San Jose, nearer to Oracle's headquarters south of San Francisco.  Ellison surely has a private jet, but he must have thought it would be more convenient to own a team within driving distance.
Robert Pera

In Memphis, however, Ellison lost out to a less rich but still quite wealthy tech guy, Robert Pera, who started his career at Apple and then went on to found Ubiquiti Networks.

Pera, 34 years old at the time of his purchase, is 6-foot-3 and was said to enjoy playing horse.  Buying a team was just the natural next step, apparently.
Joe Lacob
Joe Lacob led the group that bought the Warriors, also outbidding Ellison.  Lacob made his money as a partner at Kleiner Perkins, the top venture capital firm in Silicon Valley.

Earlier, in 2002, Lacob was part of the group that bought the Boston Celtics.  The lead in that purchase was another VC guy, Wyc Grousbeck.  When Lacob left the Celtics for Golden State, Grousbeck called him a "smart, competitive, successful basketball junkie."

Vivek Ranadive
Vivek Ranadive, the founder of TIBCO Software Inc., headed the group that bought the Sacramento Kings in 2013.  (This delighted local people who feared a Steve Ballmer purchase and the loss of the team to Seattle.)

Ranadive traces his interest in basketball to his experience coaching his daughter's middle school team, a story recounted many times but worth a repeat.  He studied the game, brought in a former women's college player to help and made the girls focus on a demanding but ultimately successful all-game, full-court press.  The team went to the national championships where, in Ranadive's telling, they lost because the referees repeatedly called fouls for their unconventional play.

The story suggests that Ranadive, like the other rich techies, is an intense and competitive guy.

But I repeat myself.

Mark Cuban
There are other stories about rich tech guys who own basketball teams. Many of them concern Mark Cuban, the billionaire who in 2000 bought a majority interest in the Dallas Mavericks from Ross Perot, Jr., whose father, you may recall, was one of the very first uber-rich tech guys.

It is probably just as well that Cuban has amassed a fortune measured in the billions.  He can be an abrasive fellow, and he is known for shouting loud, argumentative comments during Mavericks games.  The fines he pays each year for these outbursts are no doubt greater than the annual income, if not the net worth, of many lesser proles.

Interestingly, Cuban has tried on several occasions to buy baseball teams.  But the clubby baseball owners' group has blocked him every time.

Basketball seems to be more open to these new rich people.  Heck, a Russian oligarch now owns the Brooklyn Nets.

One last guy.  Actually the first guy.

The first tech billionaire to buy a basketball team was Paul Allen, an early partner in Microsoft who left the company shortly after it went public and now is estimated to be worth $16 billion.  Below is a picture of Paul Allen with the Portland Trailblazers, the team he bought for $70 million in 1988.

Allen must have enjoyed being a team owner.  He next bought the Seattle Seahawks football team in 1997.  Here he is hoisting the team's trophy after the Seahawks won the Super Bowl in January.

Allen also is part owner of the Seattle Sounders, the city's Major League Soccer team.  Here is a picture of Paul Allen and of his soccer team.

When Allen bought the Seahawks, he turned the management over to top people.  When he bought into the Sounders, it was as a minority investor, apparently interested in a project that would be good for his city, Seattle.

But Allen has been reported to be most involved with his basketball team, the Trailblazers.  It seems to be the basketball franchise that interests him most personally.

Why not?  He's a tech guy.  They seem to be wired that way.

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