$2-billion Clippers offer puts Villa sale into perspective

Noel Vasquez - GC Images

In light of Steve Ballmer's offer to buy the Los Angeles Clippers for $2 billion, Randy Lerner's asking price of £250 million for Aston Villa doesn't seem so high.

When it was rumoured that Ray Davis, owner of the Texas Rangers, was going to purchase Aston Villa I actually heard a few people complaining that he would not bring enough money to the club. I heard this line even more when I did a bit of digging and proposed that it was perhaps Houston Astros owner Jim Crane who was interested in Villa. What I don't think a lot of fans realize, though, is that owning an American sports franchise is essentially like having a license to print money.

For instance, the Washington football team, who have only made the playoffs four times in the past 15 years, are worth £960 million. The Los Angeles Dodgers, who last won a World Series in 1988 are worth £960 million as well. There are football clubs on the list, but they have long histories of sustained success. In contrast, many of the American teams listed have not seen championships in a generation.

In comparison to these teams, the Los Angeles Clippers are worth very little. They don't make Forbes' Top 50 most valuable franchises, which means they are worth less than £470 million. Yesterday, former Microsoft CEO Steve Ballmer made an offer to buy the club. Given that their owners could very likely see their control taken away by the NBA (thanks to racist statements made by Donald Sterling), they are trying to sell quickly and thus don't have a lot of leverage. So how much did Ballmer offer for the franchise?

£1.19 billion.

That is more than 2.5 times more than the club are worth at the highest possible value based on the Forbes list. In reality, the number is probably somewhere around three times higher than the team's value. Steve Ballmer is not an idiot. Buying a sports franchise is largely a status move for a number of people that may be worth overpaying, but certainly not to the tune of paying three times more than one should.

What Ballmer understands is that the protections and agreements in place for professional American teams mean that they are almost guaranteed profit engines. Imagine how much more safe buying Aston Villa would be if you were guaranteed 1) never to be relegated and 2) to get an equal share of the league's profits.

It sort of puts the £250 million asking price of Aston Villa into perspective. To American franchise owners, the club could be a plaything. And the fact that Villa are having trouble finding a buyer says something about the profitability of Premier League football. Arsenal and Manchester United are in that list (United are in the top 5), but they have had such success that their dropping from the Premier League (and the money that means) is almost unfathomable. Even if they did, the massive worldwide sponsorship deals they have would continue to ameliorate losses.

A £250 million price tag is quite high for Aston Villa, especially when you consider that Randy Lerner bought the club for £60 million. But when you compare Villa to the values and selling prices of other sports teams around the world, you realize that we're really not all that big of a spend.

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