August 17, 2016

LeBron James Wants to Own an NBA Team: LeBron James said in a podcast he hopes to buy an NBA team in the future. He said, "My dream is to actually own a team. I don't need to (be) fully hands on. If I'm fortunate enough to own a team, then I'll going to hire the best GM and president that I can. But I feel like I got a good eye for not only talent, because we all see a lot of talent, but the things that make the talent." With career earnings exceeding $1.3 billion so far, it's a viable goal.

posted by rcade to basketball at 12:29 PM - 7 comments

This made me wonder if the smart play for LeBron would be to buy the team before he retires and increase its value by playing for it. Could an owner pay himself $1 a year?

The New Orleans Pelicans appear to be the lowest valued franchise at $650 million.

If he were to end his career with five years as player-owner of the Pelicans, what's that worth in salary savings and increased franchise value?

posted by rcade at 12:32 PM on August 17

With career earnings exceeding $1.3 billion so far, it's a viable goal.

Wow! I knew he had lucrative contracts, but whoa.

what's that worth in salary savings and increased franchise value?

If he was serious, he could reasonably approach a private equity firm to do a leveraged buyout of the franchise at a favorable rate... The value-add of him playing for the Pelicans before retiring as a full time owner would make a good ROI right from the outset.

posted by FLsportsman at 01:47 PM on August 17

LeBron was on a sure track to buy in on a smart dollar basis until that idiot Ballmer overpaid for the Clips and jack-fucked the marketplace.

At a forced distress sale no less. Wonder how much less a level headed, value-oriented investor could have gotten that franchise for.

Between that deal and Magic's overpayment for McCourt's Dodgers, maybe I'll go out and try to be as questionable an individual as I can and cook up the funkiest personal problems possible and then see if I can sell my house for twice what it's worth.

First I have to transport it to L.A. That seems to be where the juiciest dumb deals go down.

posted by beaverboard at 03:16 PM on August 17

$2 billion was a wad of cash but is it an overpayment? The Clippers are currently looking for a new local TV deal and Fox supposedly offered $50 million. For a year. If we assume that's realistic and the US real interest rate is around 2% we can well, what we can do is see I never really applied myself in my econ degree and rather than do any hard math I'll be lazy and value the team as a perpetuity: a TV contract that paid $50 million/ year (adjusting for inflation) would make the team worth more than $2b by itself (50/.02). Obviously the market is changing and TV contracts may collapse but if you figure that local TV deal + a share of the national deal (3.33% of $2.6 billion a year is about $87 million) + ticket revenues, I can't fault Ballmer.

posted by yerfatma at 03:51 PM on August 17

Obviously the market is changing and TV contracts may collapse

The only thing left on TV that people will watch live is sporting events...but I'm not sure that "TV" as we know it will be around in 20 years.

posted by grum@work at 05:13 PM on August 17

Will it be something you can advertise beer on? If so, I think the $50 million is probably a safe estimate.

posted by yerfatma at 11:21 AM on August 18

Good for James. I hope he does.

posted by Joey Michaels at 06:34 PM on August 18

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