The Milwaukee Bucks and L.A. Clippers both sold for an OBSCENE amount of money. This despite both franchises being a complete joke within the NBA. The Bucks and Clippers are synonymous with losing, and being irrelevant most of the time. Yet, the Clips went for $2 billion, and the Bucks half a billion? Even though both teams are pretty awful brands when stacked up versus other local franchises.
Channeling the Talking Heads, “And you may ask yourself…well…how did I get here?”
-Sports franchises are more valuable than ever. A central component of their valuation, i.e. a main revenue stream is selling the game broadcast rights
-More people than ever are staying home from the game and tuning on television. It’s much cheaper to consume the product this way. Given how the economy is, this won’t change any time soon. And live sports broadcasts are DVR proof
-Broadcasts of live sports are the only form of programming that’s DVR proof, because people want to “live in the moment,” and do so in a communal manner.
-The place to be communal, and live in the moment is Twitter. It’s much cheaper, easier, convenient and actually way more fun than the sports bar. And Twitter is where you go for that. Instead of chat rooms, discussion threads, live blogs….No one does any of three things I just named now. Twitter made all of them obsolete.
-Twitter increases the communal experience of watching the game on television. It’s a television program that has to be consumed in real time to be enjoyed. (Have you ever seen anyone live tweet an event off their DVR? Wasn’t that person a total loser and/or freak show?)
-The real time consumption makes the advertising space more valuable, making the broadcast rights more valuable, making the sports franchise more valuable. Making the Clippers and Bucks for an ABSURDLY OVERPRICED amount.
Paul M. Banks owns The Sports Bank.net, an affiliate of Fox Sports. He’s also a frequent guest on national talk radio. Banks, a former contributor to NBC Chicago and the Washington Times, has been featured in numerous outlets including NFL.com, Forbes and the History Channel. President Barack Obama follows him on Twitter (@paulmbanks)