NBA Ownership: The Money Is in Cashing Out, Right?

July 16th, 2010 by Emile Avanessian Leave a reply »
Early yesterday afternoon, CNBC reported that Joe Lacob, managing partner at venture capital firm Kleiner Perkins (early investors in Google in addition to over 150 companies that have gone public), and Peter Guber, chairman of Mandalay Entertainment, will purchase the Golden State Warriors for an NBA-record $450 million—the previous mark was the $401 million paid by Robert Sarver paid for the Phoenix Suns in 2004—despite reportedly being outbid by Oracle CEO, billionaire Larry Ellison.

Although, it should be pointed out that Ellison’s final bid was submitted after the deadline for bids had passed.

The Warriors franchise was bought by Chris Cohan in January 1995 for $119 million, and valued at “just” $315 million by Forbes in December 2009, but apparently the Warriors' monopoly on the NBA in the Bay area, along with a rabid, non-fairweather fan base, played a role in the franchise’s premium valuation.

Now, one might be compelled to ask why, in a sluggish economic recovery following the worst recession in more than half a century, a pair of presumably intelligent and wealthy businessmen would shell out more mone ...

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