Clippers owner Steve Ballmer announces new $1.2 billion Intuit Dome
Former Microsoft CEO Steve Ballmer speaks onstage during the New York Times Dealbook event on November 1, 2018, in New York.
Getty Images | Getty Images | The New York Times
“Perpetual optimism is a force multiplier.”
It’s a famous quote admired by Steve Ballmer, the former Microsoft CEO turned pro sports owner.
Ballmer said that Colin Powell had taught him this in an interview with CNBC. These words perfectly match Ballmer’s mission to take a larger share of the revenue from Los Angeles’ basketball and entertainment markets.
On Friday, Ballmer broke ground on his new $1.2 billion arena, the Intuit Dome. This 18,000-seat facility will help the Clippers attract underserved fans in Los Angeles. Ballmer calls them “grinders”, a term that refers to working-class fans of sports.
Before we get into the details of the Intuit Dome the ex-Ballmer will reflect on the time he spent as a professional owner and sports manager after his retirement. Below are the lessons Ballmer shared about his ownership of the Clippers, and their relationship to his business history.
This all starts with Powell who is the former Secretary for State in President George W. Bush’s government.
Ballmer, 65, entered a conference room at the Clippers downtown LA office, having conducted over four interviews, with more on his schedule. CNBC had a brief discussion that lasted just 15 minutes. It covered topics both from the arena, as well his business past. The optimism surrounding Ballmer’s plans for the Clippers was explained by Powell.
Ballmer explained that you need to believe in yourself to embark on such a big project if it doesn’t begin with land. It is a complicated and difficult task to put the land together. As part of this process, we had to purchase the Forum. Keep your optimism.
Ballmer was referring to the $400 million in cash he paid Madison Square Garden Company, the previous owner of the Forum. It was home to the Lakers from 1967-1999. The building is used mainly for concerts. Ballmer was required to deal with MSG over legal concerns. MSG complained that Ballmer’s new arena would hurt the Forum’s revenue. MSG bought the Forum in 2012 for $23.5million and paid out in 2020 thanks to Ballmer.
Inglewood was also $66.2million for land that Intuit Dome would be located on. However, the Clippers will receive some of this back. Intuit, the software company that makes Turbo Tax, will pay the team more than $500 million for a 23-year naming rights slot.
Ballmer was only happier after the deal.
Ballmer stated, “This stadium is all about optimism about our team.”
It’s all about optimism about the fans. Ballmer clapped his hands and said, “Get in the building, pump-up, make energy.” “Your energy is key to our team’s success.
When he spoke of the “weird small world” that helped him land the record naming rights contract with the Clippers, he laughed. Ballmer flashed back to 1977, when he worked at Procter and Gamble. Scott Cook was the person who helped him to settle in. Cook later founded Intuit.
Asked about one of the lessons he learned at P&G that he stills using today as an NBA owner, Ballmer said: “It’s good to make consistent long-term bets. At Microsoft, we took this to another level.
Steve Ballmer, former CEO of Microsoft in 2012.
Ballmer’s history as CEO of Microsoft had mixed results. While many will argue that Microsoft failed to make tech breakthroughs, such as the modern smartphone or the search engine in its 14-year tenure, Ballmer helped triple Microsoft’s sales over his fourteen year tenure.
Ballmer spoke out about his tenure at Microsoft and the strategic long-term investments that helped position the company to achieve its $2.2 trillion market capital.
Ballmer stated that Microsoft was the second-most valuable company in the globe because of its long-term bets. Microsoft got Windows and Office perfect. With servers, we have our back-end technology in order. We got Xbox right, and I got my replacement [Satya Nadella] right. Succession plays a major part in it. I also left my successor with infrastructure for building a cloud company.
Ballmer returned to Intuit Dome to reaffirm his optimism, and said that the construction of the arena was similar to Apple’s birth.
“When I think about this product – our new building – in a way, I do liken it to the way Apple thought about the phone,” Ballmer said. The goal was not to make the best phone. They weren’t going in saying, “Let’s build a low-cost product so it can sell at a higher price.”
He said, “They arrived with a premium approach.” He said, “They brought new thinking to the table. We’re trying to do the same thing here. Our fans will not suffer because this is a top-quality building.
Interior of the new LA Clippers arena.
Source: LA Clippers
Throughout sports, teams are bracing for a new way to leverage their product, especially after pandemic losses. The Intuit Dome in the NBA will provide premium experiences.
It will have 18,000 seats and 44,000 square feet of LED lighting for the halo-shaped videoboard. The technology also allows fans to buy concessions without having to use cash or cards. Four courtside cabanas will be used by the Clippers, an idea Ballmer borrowed directly from the National Football League.
Ballmer stated that they are pioneering end-zone suites.
Intuit Dome won’t host hockey games so it has “basketball geometry,” which means that the building was designed to be used for basketball viewing. Clippers’ business operations will move to Intuit Dome. The arena will house the team’s practice facilities.
Inglewood’s Intuit Dome is expected to generate approximately $260million in economic activity annually, according to the Clippers. This includes over 7,000 part-time and full-time jobs. Additionally, the Clippers committed $100 million to community benefits.
Ballmer stated, “It is a large market.” The Clippers and Lakers have a lot of fans. We want you to know who we really are. Many people in LA identify with the idea of the underdog and the one who perseveres. There are almost two LA’s. This isn’t just about movie and showtime. “Our fans are grinders.”
Ballmer said, “I am optimistic about our team.” “I believe in our team’s potential success. That optimism can be a force multiplier. The reason that we did this is in many ways consistent with our optimism as a force multiplier approach.
After the match against the Utah Jazz in Round 2 of the 2021 NBA Playoffs, Paul George #13 of the LA Clippers spoke to Steve Ballmer, Owner of the Clippers, after the game at the vivint.SmartHome arena, Salt Lake City.
Adam Pantozzi | National Basketball Association | Getty Images
As the interview neared its conclusion, Ballmer explained the what he learned in his latest leadership role. After announcing his retirement from Microsoft in 2013, he purchased the NBA’s second LA team in 2014 for a then-record $2 billion. After Donald Sterling’s racist comments were made public, the NBA expelled Sterling and the team was put on the market.
Losses and wins are crucial in today’s world. For the Clippers, a new arena is a great help. Ballmer is approaching his eighth season as Clippers owner, and the team is 346-208, including sixth playoff appearances and one conference finals appearance during that time.
Gillian Zucker, team president, manages the business unit. Ballmer replaced Doc Rivers with Tyronn Lute last September when they parted ways with Doc Rivers. Ballmer promoted Lawrence Frank as executive director of basketball operations.
Ballmer is also known for his willingness and ability to spend money on talent. Next season, the Clippers will spend $166 million per season on player contracts, the third highest in the NBA. The luxury tax bill will be $88 millions and it includes the payments of Kawhi Leonard (the star) and Paul George, who have an average annual worth $44 million each season through 2025. These two agreements will end one year after Intuit dome opens.
Asked to reveal the most challenging thing to deal with as a sports owner, Ballmer responded: “Injuries – they happen. Kawhi was injured and it’s unclear how long Kawhi will be out of action this year.
Ballmer pointed out that Ballmer has improved his “judgment, understanding and ability to see the importance of being involved in basketball.” I don’t decide who the 12th member of the roster is. It was not my role, so it was very important for me to be clear. This is not how I add value. Asking questions adds value to my business.”
Ballmer answered if he wanted to have another team. The NFL may be looking for a player in Denver. That’s it. This is my life in sports.
Three years are left before Ballmer opens the Intuit dome, which will be future-proof and allow the Clippers’ to continue adding new features as technology develops. This will allow for more revenue streams to be generated from sports betting, augmented or virtual reality experiences and other forms of gambling.
As Ballmer learned at P&G and applied at Microsoft, he said the plan is to continue making long-term bets as a pro sports owner.
He said, “And you don’t blink.” We’re not going to blink on the Clippers. We will continue to invest in our team and make it as great as possible. In this new building we will invest.”
Ballmer was then interviewed again by the media. He exuded his optimism.