|What is the NBA Brand Worth?
By: Cindy Wendland
Mark Cuban bought the Dallas Mavericks basketball franchise for $285 million in 2000. Wesley Edens and Marc Lasry bought the Milwaukee Bucks last week for around $550 million. Now Steve Ballmer is buying the Los Angeles Clippers for $2 billion. Prices are rising, or expected values, anyway.
Are these NBA basketball franchise brands worth this much? In Milwaukee, the city is happy for the publicity the new owner brings to the city. Milwaukee is also happy for the new business that will come with the new owners as they make improvements and changes to the team. LA will see increased business as well. The owners expect to make a nice return on their investment...or are they so rich they just want the glory and fame from owning a sports team?
The value of the brand changes each season with the team’s win/loss record and the players that share the spotlight. Some owners choose to be quiet cheerleaders. Others choose to micromanage everything and generate additional publicity, which can increase the value of their brand. Publicity is good whether it is good or bad.
The new owners of the Bucks shared in some Internet publicity when their Bucks representative had a massive Twitter tidal wave. Mallory Edens, the daughter of one of the Bucks owners, gained a huge Twitter following (10,000 in one hour) during the draft. She’s young, blond, and cute, and the fans seemed to like that.
Then there’s Steve Ballmer — a man made rich from Microsoft stock who really wanted to own a sports team. He’s crazy about basketball, and he’s willing to pay 10% of his net worth to own a team. His exuberance could help the Clippers and that would increase the brand’s value.
These owners see value in the NBA brand, plus they seem to be passionate about it. Their passionate ownership, coupled with a few (a lot of) wins, may just make the brand worth their investment.
Cindy Wendland has a background in marketing and finance. She is the creative director for an online men's health magazine, BrainBrawnBody.com, and she gets to write their leisure/travel blog. She is also a web designer helping her clients with online community engagement, websitesbywendland.com. Prior to her web years, she worked in pharmacy consulting.
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