The East Coast has its "Donald," and now apparently the West Coast has one too. In Los Angeles, the millionaire who makes almost as many headlines as he makes dollars is Donald Sterling, owner of the Los Angeles Clippers. And the similarities don't just end after their first names - from real estate to penny-pinching, Trump and Sterling have quite a bit to talk about.
Trump's romantic life has kept his name in the papers and his divorce lawyers scrambling. Sterling is also no stranger to scandal. Women who worked within the basketball organization and Sterling's real estate company have accused him of sexual harassment. Sterling has even admitted to paying a "working woman" for her services over a period of several years.
Trump is also known for his quirky behavior and bouts of frugality. The man who spent millions on his latest wedding is known to frequent Wal-Mart. Similarly, Los Angeles Clippers fans and sports writers have long criticized Sterling's penchant for pinching pennies. According to one report, Sterling asked the assistant coaches to tape the players' ankles so he wouldn't have to pay trainers.
Outrageous behavior aside, Donald Trump is most famous for his colossal real estate empire. Donald Sterling shares the same claim to fame.
Donald Sterling began his career as a lawyer in 1961. From there, he began buying depressed chunks of real estate in Beverly Hills. Sterling didn't invest a great deal of money in the properties, he just held on as the price of real estate in California skyrocketed. He repeated the strategy in Santa Monica and the Bay Area. Today, his real estate portfolio is worth somewhere in the neighborhood of $500 million dollars. It includes such well-known properties as the Malibu Yacht Club and the Beverly Comstock Hotel.
Real estate was Sterling's gateway into professional sports. He bought a series of apartment homes and used them to finance his purchase of the Los Angeles Clippers. While the team isn't a winner on the hard court, it is definitely posting high marks financially. Sterling bought the team for $12.5 million. It is now worth $205 million. Only 6 of the NBA's 29 teams have an appreciation rate in that range.
So how does Sterling manage to make all that money from a losing team? He simply applied his real estate strategy to the world of organized sports, buying the least attractive property in the best part of town. Los Angeles already had the Lakers, but Sterling knew that a second position team in a huge city would make a more than a solo team in a mid-size city. So he purchased the San Diego Clippers and brought them north to Los Angeles.
While the Lakers go to championships and attract celebrity fans, they also enjoy superstar salaries. Sterling, by contrast, has drawn criticism for giving his best players the axe before giving them a raise. He also keeps overhead low by cutting back on luxury travel and other player amenities. While tickets to a Lakers game often go for hundreds of dollars, tickets to a Clippers game cost a more modest $40.
But here's the catch: more of the profits from Clippers ticket sales go back into the business. Basketball fans may think this is unsportsmanlike behavior, but from a business point of view, it is ingenious.