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Why celebrity ownership isn’t always best in the business of sport

Members of the Los Angeles Clippers listen to the national anthem before Game 4 of an opening-round NBA basketball playoff series against the Golden State Warriors on Sunday, April 27, 2014, in Oakland, Calif. The Clippers chose not to speak publicly about owner Donald Sterling. Instead, they made a silent protest. The players wore their red Clippers' shirts inside out to hide the team's logo.

Marcio Jose Sanchez/AP

It didn't take long for the monied celebrities to grab the spotlight once the National Basketball League signalled its intention to strip disgraced Los Angeles Clippers owner Donald Sterling of his team.

Almost as soon as NBA commissioner Adam Silver handed Mr. Sterling a lifetime ban over racist remarks that rocketed across the social media landscape last weekend, a diverse bunch of high-profile entertainment, sports and business figures emerged as would-be suitors for a team that could fetch $750-million (U.S.) or more.

The once-downtrodden franchise, which began life as the Buffalo Braves, was acquired by Mr. Sterling in 1981 for $12.5-million.

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Now, thanks to the acquisition of several top players, a much improved record and a growing fan base in basketball-crazed Los Angeles, it has suddenly become one of the most sought-after sports properties, attracting interest from people with both star power and plenty of excess cash.

The list includes headline-grabbing names: Oprah Winfrey, basketball great Magic Johnson, tech titan Larry Ellison, Hollywood mover and shaker David Geffen, boxers Floyd Mayweather Jr. and Oscar de la Hoya, music stars Sean Combs, Dr. Dre and Snoop Dogg, actor Matt Damon and producer Judd Apatow.

Some appear serious, while others simply can't resist the spotlight. Ms. Winfrey would like to team up with fellow billionaires Mr. Ellison and Mr. Geffen in a combined bid.

"They could be very formidable, as could Magic Johnson and the group that owns the Dodgers," said Howard Bragman, vice-chairman of, a Los Angeles-based management firm.

Mr. Geffen has tried to buy the Clippers before, only to be rebuffed by Mr. Sterling. Mr. Ellison, co-founder of Oracle Corp., could afford to buy most, if not all, of the entire league by himself and still have a decent chunk of his estimated $50-billion (U.S.) fortune left over. The noted yachtsman loves shooting hoops so much he has had basketball courts installed on his boats.

"There are some very interesting people throwing their hats into the ring, but it sure looks like a big ring," said David Carter, executive director of the University of Southern California's Sports Business Institute. "It boils down to interest in that team because of the sheer scarcity of NBA teams [for sale]."

Many of the celebs would undoubtedly love to bask in the public's adulation for rescuing the franchise from an owner long regarded as one of the worst in all of sports. "But when it's all said and done, their own motivations pale in comparison to what the NBA is looking for, which is the right kinds of business skills joined with access to money," Mr. Carter said.

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And while celebrity buzz certainly can't hurt a sports brand, it won't translate into higher sponsorship or ad revenues, more merchandise sales or bigger gates and broadcast revenues, unless it's accompanied by a winning product on the court, the ice or the playing field.

"Celebrity is nice to have. But if I'm investing in the team as a sponsor, an advertiser or a fan, I want someone who knows how to run the business," Mr. Carter said.

The wealthy-celebrity-as-sports-owner has a long history and tends to work best for the team's brand when the star's operational role is severely restricted. Bing Crosby was a long-time minority owner of the Pittsburgh Pirates baseball team. And his Road pictures co-star Bob Hope owned a piece of his hometown Cleveland Indians. Pop star Gloria Estefan and her husband similarly acquired a minority stake in their hometown Miami Dolphins football club in 2009.

When Bruce McCall, who then owned the Los Angeles Kings, acquired the Toronto Argonauts of the Canadian Football League in 1991, he brought along hockey icon Wayne Gretzky and well-known Canadian actor John Candy as partners.

Although they created plenty of marketing buzz, it quickly faded, said Brian Cooper, president and CEO of marketing firm S&E Sponsorship Group, a former executive with the Toronto Raptors and one-time president of the Argos. "You're really trying to borrow the brand equity, the stardust, that they bring to the table."

Mr. Cooper compares most celebrity involvement in sports to their investments in restaurants. "They want to be seen and to bring others to that restaurant or to that game and to the brand. But I don't think they really have that great an impact."

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Exceptions include basketball legend Michael Jordan, the only current black majority owner in the NBA, and Mr. Johnson, who had a track record of success in business before joining the group that purchased the Los Angeles Dodgers.

"If you're Drake [a brand ambassador for the Toronto Raptors] or Jay-Z [who sold his one-fifteenth of 1 per cent of the Brooklyn Nets last year for $500,000] does it get the fans excited?" Mr. Cooper asked. "Without a doubt, when they're sitting courtside or they're on the field, they're providing an extra element of excitement and brand enhancement. But is it sustainable? I don't think so. Winning will always trump any celebrity you ever have."

In the meantime, though, the celebrity buzz surrounding the Clippers is helping the NBA move its very real problem of removing the reluctant and notoriously litigious Mr. Sterling to the sidelines and returning the public's focus to the court and some intriguing playoff battles.

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About the Author
Senior Economics Writer and Global Markets Columnist

Brian Milner is a senior economics writer and global markets columnist. In a long career at The Globe and Mail, he has covered diverse business beats, including international trade, the automotive industry, media, debt markets, banking and the business side of sports. More


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