Does A Bad CEO Buying A Basketball Team From An Alleged Racist Prove The Larger Problem? [BLOG]
By: Eric Thomas
@etflint
Steve Ballmer is probably set to be the new owner of the Los Angeles Clippers, to the tidy tune of $2 billion. He's buying the team from a trust that includes Donald Sterling and his wife, who've made their billions off the backs of poor people in southern California. Ballmer was the CEO of Microsoft for thirteen years, during a time that the company went from a world leader in innovation to a laughing stock.
It sounds awful when you condense it, but this is where we are in the world today. The upper 1% have untold amounts of money, and they're basically trading it between each other. It's hard to fathom how distant the income gap has become, and how far out of reach the ladder has become for most people in this country. While most of us gnash and claw and dream of six figure salaries, the worlds wealthy have crossed into another stratosphere. The story of the sale of the LA Clippers, a team ignored for most of its existence, says a lot about where we are, and where we're headed. It's almost too apt that this transaction is happening at the same time as a ribald debate about adjusting the minimum wage.
Donald Sterling was forced to sell the Clippers after his well-publicized comments to his mistress. Sterling is known as a slumlord in San Diego and Los Angeles, and his business practices have landed him in court a handful of times. As an owner of a sports franchise, he's been an outright failure until now. The Clippers have been the worst team in the NBA for my entire life. They've spent most seasons as the worst team in all of professional sports. They've only recently entered the Lob City era, becoming relevant almost by accident when David Stern handed them CP3. The club boasts a lifetime winning percentage of .367 and yet they're likely to sell for $2 billion. The Dallas Cowboys are thought to be the most valuable sports franchise in America, valued at $2.3 billion and the Clippers are just a shade behind them?!
Some people cite the economic principle of supply and demand, but the demand can't be very high when the price tag is in the billions. This is inflated value. Usually, when teams sell, they are near the nadir because the owners are in flux and probably can't afford to buy good players before they're forced to unload the team. The Clippers, on the auction block at gun point, never had time to suffer under Sterling. The controversy merely served as excellent advertising for a fire sale.
Ballmer is paying for the Clippers with cash. He has an extra two billion dollars lying around. He certainly earned it, he spent many years as the CEO of Microsoft; hand-picked to lead the company after Bill Gates stepped down. It's worth noting that Ballmer was at the head of Microsoft when the company spent ten years in free fall, and almost every decision the they made under him was a disaster.
He laughed at the iPhone when it was released, presided over every weak Windows release, including Vista, introduced the Zune, announced the useless HP slate, and lost untold billions trying to compete with Google. The company stayed profitable during his tenure almost in spite of him. He was handed the reigns in 2000 as Microsoft was emerging from their anti-trust suit, the same year Steve Jobs permanently returned to his chair at the top of Apple. Jobs piloted Apple into one of the world's most valuable companies and overtook Microsoft in almost every category. Ballmer himself is a perfect allegory for corporate incompetence; he's rich beyond anyone's wildest dreams despite a terrible track record.
Meanwhile, in Arizona, Shanesha Taylor finally won the right to visit her children. She's a homeless veteran who was honorably discharged, but like many other veterans, she has been unable to find a job. When a job interview finally materialized, she couldn't find anyone to take care of her children, so she had little choice but to leave them in the car while she went to the interview. She was arrested and charged with felony child abuse. She's facing eight years in prison, and the Attorney General refuses to drop the charges. She couldn't stay on welfare, couldn't find work, and if she found work she couldn't find child care. There was simply no way for Ms. Taylor to get out of her circumstances. This is happening right outside your door, every day. Human beings are trapped in poverty and despair, with absolutely no way out. You used to be able to work your way out of such situations, but right now there are no jobs for them, and no hope for a better tomorrow.
Steve Ballmer bought the Clippers from a racist with $2 billion in disposable income. In January 2013, over 610,042 people were homeless on a single night, over 57,000 of them were veterans; almost 47,000 of them were unaccompanied children.
America isn't like the one where our parents or grandparents grew up. There is no safety net, no ladder. Some economists say that the country is in an era of unprecedented wealth inequality, and no story makes it more obvious than the sale of the Clippers. This country used to be the land of opportunity, but more and more, there is no path out of poverty. Those who climbed the ladder burned it when they reached the top.
It wasn't supposed to be this way. A rising tide was told to float all boats. Proponents of "supply side" economics told us that wealth would "trickle down." It hasn't. It never does. We need to stop thinking it will. There's booming business in two sectors: low priced goods and high priced goods. Maybe this has been like this for longer and we didn't see it.
Should the sale of the Clippers be blocked? Of course not. So what's the point of this comparison? We need to see these events in their current context. Ballmer wants a basketball team and he has every right to use his capital in whatever way he sees fit, but at the same time we must understand that money is a finite resource. When the very few have most of it, that leaves the rest of us scrabbling for the scraps. The country formerly known as the land of opportunity looks a lot more like Westeros in the early part of the 21st century, and if we can't solve this problem unless we recognize the symptoms.