With his $400 million cash purchase of the Forum, Los Angeles Clippers owner Steve Ballmer appears to have maneuvered his way around a potential roadblock to building his own privately funded billion-dollar arena nearby.
But there are questions about what Ballmer’s March 24 deal to acquire the Forum from New York-based Madison Square Garden Co. will mean for the storied Inglewood venue.
The deal, which is expected to close during the second quarter, is run through Ballmer’s newly formed CAPSS entity and eliminates the threat of an anti-competition lawsuit against him or the city of Inglewood.
The Forum Presented by Chase, as the arena is formally branded, will remain primarily a concert venue, the Clippers said in a press release. The building was added to the National Register of Historic Places in 2014 for its architectural significance.
Ballmer has been working to build an 18,000-seat arena for his team, along with new offices and a community center, at a site about 2 miles south of the Forum along Century Boulevard between Prairie and Yukon avenues.
The Clippers said public hearings to approve the Inglewood Basketball and Entertainment Center project are expected to be held this summer. The team said the new complex will create 7,500 construction jobs, 1,500 permanent jobs and bring $100 million in economic and civic benefits to Inglewood.
The immediate value of the Ballmer-Forum deal is apparent, according to David Carter, principal of Sports Business Group and associate professor of sports business at the USC Marshall School of Business.
“(Ballmer) avoids future costs connected to ongoing legal fees and the likely negativity linked to an ongoing public relations battle,” Carter said. The purchase also “accelerates his development timeline.”
Another benefit to owning both arenas in close proximity, according to the Clippers, is that it allows for coordinated scheduling of events to alleviate traffic congestion.
The Forum was built in 1967 by Jack Kent Cooke to house his Los Angeles Lakers and Los Angeles Kings, then was sold to Jerry Buss in 1979 as part of his purchase of the Lakers and Kings. Buss created the first major sports facility naming rights deal, bringing in Great Western Savings & Loan.
When the Lakers moved downtown to the new Staples Center in 1999, the Forum was sold to the Faithful Central Bible Church, which owned the building from 2000-2009.
The church sold the arena to MSG in 2012 for $23.5 million in a deal with the city of Inglewood. MSG invested $50 million in upgrades and reopened the Forum as a concert venue with six shows by the Eagles in January 2014.
It has since hosted boxing, professional wrestling and UFC events, as well as awards shows. It is slated to be the site for gymnastics during the 2028 Summer Olympics.
But when it comes to how Ballmer’s group will operate his new arena and the Forum, the reality of the business deal could force Ballmer to conclude owning both isn’t feasible, said Carter.
“For the foreseeable future, it may make sense to maintain the Forum,” Carter said, “but over time, he will certainly calculate the economic benefits of transferring entertainment to his new arena. At that point, he may determine that there is a better use for the real estate than having a secondary arena occupy the site.”
Carter said Ballmer could bulldoze the Forum to create a larger parking lot for those attending events at the new SoFi Stadium complex next door. The site could also be sold to a group with heavy restrictions on its use.
The sooner Ballmer can begin construction of his own arena and pull his team off the scheduling maze created with three tenants at Staples Center, the sooner he can increase the value of his franchise, Carter explained.
The Clippers’ lease with Staples Center expires in 2024.
“It’s hard to build and extend your brand when you are a secondary tenant in an arena and have reduced ability to demonstrate your identity,” Carter said. “More importantly, a new arena will afford Ballmer the opportunity to more fully monetize his team, which will substantially increase the franchise’s value.”
The deal is another win for Inglewood, said Sandy Sigal, president and chief executive of Woodland Hills-based NewMark Merrill Cos. Inc. Even before plans were announced for SoFi Stadium, NewMark Merrill purchased the Crenshaw Imperial Plaza, a large shopping center in the city.
“We have such a positive impression, even before the stadium, of Inglewood as a city, and it keeps getting better and better,” Sigal said.
Patrick Barnes, a principal with Avison Young, expects the deal to help the surrounding area, too.
“What stands to gain the most is the downtown area (of Inglewood),” Barnes said. “The infrastructure is there, the buildings are there, there is a fair amount of untapped potential from a daily needs or a food service or an office standpoint.”
He said there could be businesses, like breweries, looking at the area and other services that support the venue.
“(Inglewood) is going to become more of a viable West L.A., or close to West L.A., city that younger generations are going to accept as a marketplace to live and raise families in,” Barnes said.
— Staff Reporter Hannah Madans contributed to this story.
