NBA's Clippers defy gravity with team's record sale price
By Ronald Grover and Eric Kelsey
(Reuters) - Former Microsoft CEO Steve Ballmer's record $2 billion deal to buy the Los Angeles Clippers shows that star forward Blake Griffin and his monster slam dunks aren't the only things that defy gravity.
When the National Basketball Association first hit Clippers owner Donald Sterling with a lifetime ban, investment bankers estimated the price of his team at around $1 billion. Instead, three groups, teaming with billionaires and celebrities, bid up the price to a record for a NBA team, double the initial estimate.
The eye-popping sale price has likely boosted the stock of other teams around the NBA, said sports consultant Ed Desser, a former top NBA TV executive, and could have a ripple effect.
"Sports franchises are one-of-a-kind trophy properties," Desser said. "Every owner saw what just happened."
As evidence, Rich Tullo, an analyst at Albert Fried & Company LLC, points to Madison Square Garden Co, which owns the NBA's New York Knicks and the National Hockey League's New York Rangers.
About 738,000 shares of MSG changed hands within the first 55 minutes of trading the morning after the Clipper deal, surpassing the 10-day average of about 618,000 shares. At mid-afternoon the stock was up 3.2 percent at $54.77.
Tullo, who has an "overweight" recommendation on the stock, figures much of that rise reflects a new valuation for the Knicks. (That said, the Rangers may have helped the stock: On the evening the Clippers deal was announced, the New Yorkers clinched a trip to the NHL's Stanley Cup finals.)