Former Microsoft CEO Steve Ballmer speaks on stage during the New York Times Dealbook event on November 1, 2018 in New York.
Michael Cohen | Getty Images | The New York Times
“Perpetual optimism is a force multiplier.”
It’s a famous quote admired by Steve Ballmer, the former CEO of Microsoft who has become a professional sports owner.
“Colin Powell taught us that,” Ballmer said in an interview with CNBC. Powell’s words relate perfectly to Ballmer’s new mission: to get a bigger share of revenue in the basketball and entertainment market in Los Angeles.
On Friday, Ballmer opened the ground to his new $ 1.2 billion arena, the Intuit Dome. The 18,000-seat complex will be vital in helping the Clippers capture sports fans in Los Angeles. Ballmer labels them as the “mills” of the city, a term used to describe working-class sports fans.
Before discussing details about the Intuit Dome, the former Ballmer reflected on his time in his role after retiring as a professional sports owner. That’s what Ballmer said he learned about Clippers ’ownership and his relationship to his business past.
It begins with Powell, the former Secretary of State under the administration of President George W. Bush.
Ballmer’s optimism is achieved
Ballmer, 65, walked into a conference room in the Clippers office in downtown Los Angeles, after conducting more than four interviews, with more on his schedule. The discussion with CNBC lasted just over 15 minutes, covering various topics in the arena and his previous life in business. Powell’s words helped explain the optimism surrounding Ballmer’s view of the Clippers, starting with the Intuit Dome.
“You have to be optimistic to take on a huge project when you’re not starting on the ground,” Ballmer said. “Uniting the land is a whole circus of legal issues, resolutions. We had to buy the Forum as part of this process. You have to keep your optimism.”
Ballmer was referring to the $ 400 million in cash he paid to the Madison Square Garden Company, the former owner of the Forum. The Lakers played there from 1967 to 1999 and the building primarily hosts concerts today. Ballmer needed to resolve legal issues with MSG, which complained that Ballmer’s new scenario would damage the Forum’s revenue. MSG bought the Forum for $ 23.5 million in 2012 and charged in 2020, thanks to Ballmer.
The Clippers owner also paid the town of Inglewood $ 66.2 million for the land where Intuit Dome will be located. The Clippers will get a little of that, though. Intuit, the software company that makes Turbo Tax, will pay the team more than $ 500 million for a 23-year name rights band.
This agreement only improved Ballmer’s optimism.
“This stadium is about being optimistic with our team,” Ballmer said.
“It’s about being optimistic with our fans. Get in the building, make bombs, make energy,” Ballmer added, clapping his hands. “Your energy can power our team more successfully.”
He then laughed when he discussed the “small, weird world” and a key relationship that probably helped get the Clippers to get a record name rights deal. Ballmer dates back to 1977, when he worked at Procter and Gamble. The person in charge of helping him settle was Scott Cook, who later co-founded Intuit.
Asked about one of the lessons he learned at P&G that he still continues to use as an NBA owner, Ballmer said, “It’s good to make constant long-term bets. We took it to another level at Microsoft.”
Former Microsoft CEO Steve Ballmer in 2012.
Get it right
Ballmer’s history as CEO of Microsoft had mixed results. But while some will point out that Microsoft lost key technological advances like the modern smartphone and search engine, Ballmer helped triple Microsoft’s sales during its 14 years as CEO.
In discussing his time at Microsoft, Ballmer noted the long-term bets made, which positioned the company for its current $ 2.2 trillion market cap.
“There’s a reason Microsoft is the second most valuable company in the world,” Ballmer said. “We have the right Windows and Office. We have the right back-end technology, with servers. We have the right Xbox, and I have my replacement [Satya Nadella] right. Succession has a big part of it and I left my successor the infrastructure to build a business in the cloud. “
Ballmer’s optimism returned to Intuit Dome, comparing the construction of the arena to the birth of Apple’s most important product.
“When I think of this product, our new building, in a way, compares it to the way Apple thought about the phone,” Ballmer said. “They didn’t try to design the cheapest phone. They didn’t say, ‘We’re building a cheaper product because it could sell a higher volume at a lower price.’
“They came in with a premium approach,” he added. “They came in thinking of new ways of doing things. That’s what we’re doing here. It’s a premium building, and our fans won’t suffer for it.”
Within the new LA Clippers stage.
Source: LA Clippers
Within Ballmer’s new asset
Throughout sports, teams are looking for a new way to leverage their product, especially after pandemic losses. Premium experiences never hurt and Intuit Dome will offer a unique experience in the NBA.
The 18,000-seat venue will feature 44,000-square-foot LED lights for its halo-shaped video card, as well as technology that allows fans to purchase concessions and charge automatically without using cash or cards. In addition, the Clippers will take advantage of four cabins next to the playground, a concept Ballmer took from the National Football League.
“We pioneered the feel of the end zone suites,” Ballmer said of the luxury offer.
The Intuit Dome will not host hockey games, so the building has a “basketball geometry,” meaning it was built specifically to watch basketball games. Clippers ’commercial operations will be moved to the Intuit dome and the team will also locate its practice facilities on the sand.
The Clippers estimate that the Intuit Dome will generate approximately $ 260 million in annual economic activity for Inglewood, including more than 7,000 full-time and part-time jobs. The Clippers also pledged a $ 100 million community benefit package.
“It’s a big market,” Ballmer said. “There are a lot of fans who can be fans of the Clippers and the Lakers. But we want to tell you who we are. I think there are a lot of people in Los Angeles who identify with this notion of being the despised, the person who moves forward. “It’s almost two LAs. Not everything is acting or film time. Our fans are grinders.”
“I’m optimistic about our team,” Ballmer added. “I am optimistic about the success of our team and that optimism is a force multiplier. In many ways, the reason we have done this is consistent with this optimism as a force multiplier approach.”
LA Clippers’ Paul George # 13 talks to LA Clippers owner Steve Ballmer after the game against the Utah Jazz during round 2, game 5 of the 2021 NBA Playoffs on June 16, 2021 at vivint.SmartHome Arena in Salt Lake City, Utah.
Adam Pantozzi | National Basketball Association | Getty Images
As the interview drew to a close, Ballmer explained what he learned in his last leadership role. After announcing his retirement from Microsoft in 2013, he bought the NBA’s second NBA team in 2014 for a record $ 2 billion. The team hit the market after the NBA banned former owner Donald Sterling from making racist statements that were made public.
In this world, victories and defeats are key. A new arena will only help the Clippers for a while. Ballmer is nearing his eighth season as a Clippers owner, and the team is 346-208, including his sixth playoff appearance and conference final during that time.
Team President Gillian Zucker heads the business unit. Ballmer made a change of coach in basketball when the team split from Doc Rivers last September, replacing him with Tyronn Lue. Ballmer also elevated executive Lawrence Frank to operate basketball operations.
Ballmer has also shown a willingness to spend on talent. Next season, the Clippers will spend $ 166 million per season on player contracts, the third highest in the NBA. That equates to a $ 88 million luxury tax bill and includes the payment of stars Kawhi Leonard and Paul George for an average annual value of $ 44 million per season through 2025. These two agreements will expire one year after the intuition of opening the Intuit Dome.
When asked to reveal the hardest part as a sports owner, Ballmer responded, “Injuries do occur. We had an injury to Kawhi, and with that injury, we’re not sure how long he’ll be out. this year. . “
Ballmer then pointed to an “improved judgment and understanding of where and how he should be involved in basketball. I’m not deciding who is the 12th player on the roster. I’m not involved and it was important for me to know I’m not involved “It’s not my way to add value. It adds value by asking questions.”
When asked if he wants to own another team, as the NFL could open in Denver, Ballmer said, “No, and my wife tells me,‘ You already spend enough time playing sports. ’That’s for me. in sports “.
Ballmer is three years away from opening the Intuit Dome, which is future-proof, allowing the Clippers to continue to add features as technology improves. This should align more revenue streams with sports betting and virtual and augmented reality experiences.
As Ballmer learned at P&G and applied to Microsoft, he said the plan is to continue betting long-term as a professional sports owner.
“And it doesn’t blink,” he said. “We don’t blink at the Clippers. We will constantly invest and make our team as good as we can. And in this new building, we will invest.”
Ballmer marched to another media interview, showing his perpetual optimism.