Fmr. Microsoft CEO Ballmer: 'Not Afraid' to Spend Big on NBA Talent

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LA Clippers owner Ballmer: 'Not afraid' to pay luxury tax

Los Angeles Clippers owner Steve Ballmer on the key factors he considered when purchasing the NBA team.

Rising U.S. stocks will lift the value of sports franchises, Los Angeles Clippers owner Steve Ballmer told the FOX Business Network.

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Ballmer, the former Microsoft (MSFT) CEO who purchased the Clippers for an NBA record $2 billion, said his team will likely lose money as it spends on talent to win. But NBA teams will be worth more in the long run, offering a big return on his investment if he ever decides to sell.

“We’re getting price appreciation because these basketball teams will continue to appreciate as the stock market appreciates,” Ballmer said in an interview on the FOX Business Network’s Wall Street Week. “People pay, basically, with appreciation in the stock market. Now, I’m not going to sell my team. I’m not looking for the dividend return. I’m looking for the fun, which means we’re looking for championships.”

Ballmer added that he’s “not afraid” to pay the NBA’s luxury tax in order to bring the Clippers closer to a championship. As a result, the franchise will “probably lose a little money here along the way.” If not for the luxury tax, Ballmer believes the Clippers could achieve a 3% dividend return.

The NBA levies a tax on teams that spend above a certain threshold on player contracts.

The Clippers trail the Utah Jazz, 3-2, in the first round of the NBA Playoffs.

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