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Clippers proprietor Steve Ballmer broadcasts new Intuit Dome valued at $ 1.2 billion

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

“Eternal optimism is a force multiplier.”

It’s a famous quote that was admired by Steve Ballmer, former Microsoft CEO who turned pro sports owner.

“Colin Powell taught us that,” Ballmer said in an interview with CNBC. Powell’s words fit perfectly with Ballmer’s new mission: to make bigger sales in the Los Angeles basketball and entertainment market.

On Friday, Ballmer broke ground for his new $ 1.2 billion arena, the Intuit Dome. The 18,000-seat complex will help the Clippers attract underserved sports fans in Los Angeles. Ballmer calls them the town’s “grinders,” 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 post-retirement role as a professional sports owner. Here’s what Ballmer said he learned about owning the Clippers and how it relates to his business history.

It begins with Powell, the former Secretary of State in the administration of President George W. Bush.

Ballmer’s optimism comes through

Ballmer, 65, entered a conference room in the Clippers office in downtown LA after conducting over four interviews and more on his schedule. The discussion with CNBC lasted just over 15 minutes and covered a variety of topics from the arena and his previous business life. Powell’s words helped explain the optimism about Ballmer’s vision for the Clippers, starting with the Intuit Dome.

“You have to be optimistic about taking on a huge project if you don’t start with land,” said Ballmer. “Putting the country together is quite a circus of legal issues and decisions. We had to buy the forum as part of that process. You have to be optimistic.”

Ballmer was referring to the $ 400 million cash he had paid to Madison Square Garden Company, the former owner of the forum. The Lakers played there from 1967-1999 and the building is now mostly used for concerts. Ballmer had to resolve legal issues with MSG complaining that Ballmer’s new arena would hurt the forum’s revenue. MSG bought the forum for $ 23.5 million in 2012 and cashed it out in 2020 thanks to Ballmer.

The owner of Clippers also paid the city of Inglewood $ 66.2 million for the land on which the Intuit Dome will stand. The Clippers will get some of it back, however. Intuit, the software company that makes Turbo Tax, will pay the team more than $ 500 million for a 23-year naming rights slot.

This deal only added to Ballmer’s optimism.

“This stadium is about being optimistic about our team,” said Ballmer.

“It’s about being optimistic about our fans. Get in the building, pump up, energize,” added Ballmer, clapping his hands. “Your energy can lead our team to more success.”

Then he laughed as he talked about the “weird little world” and a key relationship that likely helped the Clippers get an agreement on naming rights for records. Ballmer remembered 1977 when he was working at Procter and Gamble. The person who helped him settle in was Scott Cook, who later co-founded Intuit.

When asked about one of the lessons he learned at P&G that he still uses today as an NBA owner, Ballmer said, “It’s good to make constant long-term bets. We took that to a whole other level at Microsoft.”

Former Microsoft CEO Steve Ballmer in 2012.

Microsoft

Get it right

Ballmer’s history as CEO of Microsoft has had mixed results. But while some will point out that Microsoft missed out on major tech breakthroughs like the modern smartphone and search engine, Ballmer helped triple Microsoft’s revenue during his 14 years as CEO.

Speaking of his time at Microsoft, Ballmer noted the long-term bets the company was placing on its current market cap of $ 2.2 trillion.

“There’s a reason Microsoft is the second most valuable company in the world,” Ballmer said. “We got Windows and Office right. We got our back-end technology right with servers. We got Xbox right and I got my replacement [Satya Nadella] to the right. Succession is a big part of it, and I left the infrastructure to my successor to build a cloud business. “

Ballmer’s optimism shifted back to Intuit Dome, likening building the arena to the birth of Apple’s top product.

“When I think of this product – our new building – I kind of compare it to the way Apple thinks about the phone,” Ballmer said. “They weren’t trying to make the cheapest phone. They weren’t saying, ‘Let’s make a cheap product because it could sell more at a lower price.’

“They came with a premium approach,” he added. “They came up with new ways of doing things. That’s what we’re doing here. This is a premium building and our fans won’t suffer for it.”

In the new LA Clippers arena.

Source: LA Clippers

In Ballmer’s newest asset

Across sport, teams are looking for a new way to use their product, especially after pandemic losses. Premium experiences never hurt, and the Intuit Dome offers a one-of-a-kind experience in the NBA.

The 18,000-seat arena will feature 44,000 square feet of LED lights for its halo-shaped video board, as well as technology that allows fans to purchase concessions and automatically top up without cash or cards. In addition, the Clippers will use four cabanas on the sidelines, a concept Ballmer borrowed from the National Football League.

“We are pioneers in the feeling of end-zone suites,” said Ballmer about the luxury offer.

The Intuit Dome will not host hockey games, so the building has “basketball geometry” which means it was built specifically for watching basketball games. Clippers operations will be relocated to the Intuit Dome and the team will also house their practice facility in the arena.

The Clippers estimate the Intuit Dome will bring Inglewood approximately $ 260 million annually in economic activity, including over 7,000 full-time and part-time jobs. The Clippers are also committed to a $ 100 million community benefit package.

“It’s a big market,” said Ballmer. “There are a lot of fans who can be fans of the Clippers and Lakers. But we want to tell you who we are. I think there are a lot of people in LA who relate to this idea of ​​being the outsider, the person who walks. It’s almost two LAs. It’s not just showtime and the movie business. Our fans are grinders. “

“I’m optimistic about our team,” added Ballmer. “I’m optimistic about our team’s success, and that optimism is a force multiplier. In many ways the reason we did this aligns with that optimism as a force multiplier approach.”

Paul George # 13 of the LA Clippers speaks to owner Steve Ballmer of the LA Clippers after beating the Utah Jazz in Round 2, Game 5 of the 2021 NBA Playoffs on June 16, 2021 at the vivint.SmartHome Arena in Salt Lake City, Utah.

Adam Pantozzi | National Basketball Federation | Getty Images

Important lessons

As the interview neared its end, Ballmer explained what he’d learned in his last leadership role. After announcing his resignation from Microsoft in 2013, he bought the NBA’s second LA team in 2014 for the then record value of $ 2 billion. The team hit the market after the NBA banned former owner Donald Sterling for making racist statements that became public.

In this world, wins and losses are crucial. A new arena will only help the Clippers for a while. Ballmer is nearing his eighth season as the Clippers owner, and the team is 346-208, including sixth playoff appearances and an appearance in the conference finals during that time.

Team President Gillian Zucker heads the business unit. Ballmer made a coaching change on the basketball side when the team split from Doc Rivers last September, replacing him with Tyronn Lue. Ballmer also raised executive Lawrence Frank to run basketball operations.

Ballmer has also shown a willingness to spend on talent. For the next season, the Clippers will spend $ 166 million per season on player contracts, the third highest in the NBA. That brings in a luxury tax of $ 88 million and includes paying an average annual value of $ 44 million per season to stars Kawhi Leonard and Paul George through 2025. These two deals run a year after the Intuit is scheduled to open Dome off.

When asked what is the greatest challenge as a sports owner, Ballmer replied: “Injuries – they happen. We had an injury to Kawhi and with that injury we are not sure how long he will be out this year. “.”

Ballmer then referred to an improved “judgment and understanding of where and how I should be involved on the basketball side. I don’t decide who is the 12th player in the roster. I’m not involved and it was important to me to know” Me am not involved. So I can’t add value. I add value by asking questions. “

When asked if he’d like to own another team because the NFL might have an opening in Denver, Ballmer said, “No – and my wife says, ‘You’ve been spending enough time doing sports.’ That’s it for me in sports. “

Ballmer is three years away from opening the Intuit Dome, which is future-proof and allows the clippers to add more features as technology improves. That should balance more sources of income with sports betting and augmented and virtual reality experiences.

As Ballmer learned at P&G and applied to Microsoft, he said the plan is to continue making long-term bets as a professional sports owner.

“And you don’t blink,” he said. “We are not looking at the Clippers. We will invest consistently and make our team as good as possible. And we will invest in this new building.”

Ballmer then left for another media interview, flaunting his eternal optimism.

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