How Steve Ballmer went from selling brownie mix to running Microsoft and owning the LA Clippers
With all the subtlety of the Kool-Aid man crashing through a wall, Steve Ballmer entered the NBA in 2014…. after a run as Microsoft's CEO, Ballmer bought the perpetually lousy LA Clippers for the has-he-lost-his-mind price of $2 billion. Since then: the franchise's value has more than doubled. The Clippers haven't had a losing season. Ballmer has seen his net worth soar north of $120 billion. And his full-throated passion for the team? It's diminished not at all… this month, the Clippers christen a new home, the Intuit Dome. The owner is convinced that the arena will help vault the Clippers over the Lakers, that other pro basketball team in LA....and eventually—he vows—to an NBA title.
August is supposed to be a quiet time in the NBA but quiet is a relative term for Steve Ballmer.
Steve Ballmer: Come on, Clipper Nation! Yeah, I want th-- I want 'em to feel the energy–of our fans. We want 'em in their seats. We want people making noise. We want it to (grunts)
Ballmer was giving us an early look at the arena he built for the LA Clippers. Among the billionaires who own U.S. pro sports franchises, Ballmer, now 68, is the wealthiest by far. Nevermind buying the team, he also spent more than $2 billion on this new venue.
Jon Wertheim: And that's gonna help win basketball games? This isn't just about atmosphere, and I had a fun time.
Steve Ballmer: Will it really help? I can't promise. But everything in my instinct says it will help our team-- our-- our basketball team, if our crowd team can really get into it and give 'em energy.
Give 'em energy might as well be Ballmer's catchphrase. His enthusiasm predates his sports ownership, going back to his days at Microsoft. It's both personal expression and a way to let his team know he's with 'em.
Steve Ballmer: 'Cause it tells them, "Hey, he will support us. When it's showtime he'll be there to help support us." And I think that is important. I'm sure players have that like, "God, this guy seems a little bit nuts." That's OK.
Jon Wertheim: You say you sweat as much owning this team as you did running Microsoft. Help me understand that.
Steve Ballmer: Let me say, little different sweat. I ran Microsoft. I grew up with the place. I helped shape the place. I knew where all the-- the bodies were buried, so to-- or most of the bodies were buried. And, you know, every day, it was my-- my butt on the line. So I sweated more at Microsoft, but I don't worry any less (laugh) at the Clippers. And I don't worry about the revenue and the day-to-day.
Jon Wertheim: You don't?
Steve Ballmer: Winning, I do worry about winning.
If owners could be called for traveling… well, Ballmer has come an impossibly long way from his childhood as a shy, anxious kid in suburban Detroit. His father, a Swiss immigrant, worked a mid-level job at Ford. Ballmer went to Harvard… where he managed the football team… and struck up a close, fateful friendship with another gawky math type: Bill Gates. Gates dropped out to start a software company. Ballmer went in a different direction: sales and marketing.
Steve Ballmer: My first day at Procter and Gamble, I was very, very shy, very nervous. And a guy who became my friend and roommate said meeting me that first day was like this: "Hi, my name's Steve Ballmer. My-- my palms are sweating but don't worry, I'm OK."
Jon Wertheim: Did-- did I get this right, you-- you were selling cake mix?
Steve Ballmer: Duncan Hines brownie mix.
Jon Wertheim: Oh.
Steve Ballmer: Blueberry muffin mix, and Moist 'n' Easy Snack Cake mix, to be precise, Jon.
Brownie mix was not his calling, so Ballmer went to Stanford Business School. In 1980, he was midway through his first year, when…
Steve Ballmer: I get a call from Bill that says, "Hey, how you doin'? You know, hey, what-- what are you-- oh yeah, you got another year to go. Too bad."
Jon Wertheim: He's trying to recruit you.
Steve Ballmer: He's trying to recruit me. But software for microcomputers. It was not a thing at the time in any way, shape, or form.
But Gates was convincing, and Ballmer left school to join his pal's chaotic startup. Gates was the lead engineer; Ballmer steered the business. His salary? $40 thousand, he says, plus a 9% stake in the company… understatement… that stake paid off as Microsoft went on to become… well… Microsoft. Together, Gates and Ballmer personified the company: smart, ambitious, maybe a little nerdy… not always user-friendly.
Jon Wertheim: We were told, "These-- these guys had a rapport as college buddies, but they could also fight. They could argue. Sometimes it was like verbal knife fights." You-- you remember some of those?
Steve Ballmer: Oh yeah. Bill and I would definitely have-- some knock-down, drag-out fights, arguments.
Jon Wertheim: You have a winning record?
Steve Ballmer: My technique became more of a just keep on harping, harping, harping on the stuff I thought was important as opposed to try to, like, knock him d-- (laughter) knock him down and drive my point across.
In 2000, Ballmer took over as CEO. Remember the shy kid? Early in his career, Ballmer learned to get over his nerves by cranking up Rod Stewart in his car and giving himself loud pep talks. Here he is doing the same for thousands of software engineers.
Shirt-soaking enthusiasm became his trademark…and an internet meme.
Jon Wertheim: Who was that guy?
Steve Ballmer: That's a guy who really wanted to fire people up. To say, "Hey, we love you. We want you to write software for Windows. We'll (clap) support you. This (clap) is a great opportunity for you." Now, my expression of that, let's just put it this way, (laugh) I look back on it now, it's a little embarrassing. I personally feed off energy. And it's not everybody's cup of tea, by the way. I mean, you know, some people are quieter. But it's me.
If Microsoft's products mirrored its leaders—function over form—sometimes that was to the company's detriment. Ballmer, famously, failed to take seriously the challenge of Apple's iPhone, laughing at the idea in 2007.
Steve Ballmer: Gosh darn it. You know, the phone. Man, the phone. We should've been in the phone. We should've been the leader in the phone."
Jon Wertheim: What happened with the phone--
Steve Ballmer: There were a couple things. We had a lot of our talented engineers tied up elsewhere. Number two, we thought about it as too much like what we had done with Windows. It didn't really-- wasn't gonna work. We had to have different thinking earlier on.
And yet during Ballmer's tenure as CEO, revenue more than tripled. He hung on to most of his stock and today, is consistently ranked among the world's 10 wealthiest billionaires. Not that you'd know it. He has no superyacht, no new wardrobe, no new spouse… He and his wife Connie raised three boys in a four-bedroom outside Seattle, where they still live…Through a family philanthropy they've given away nearly a billion dollars in the last 10 months alone. And spent millions more on a side project: the nonpartisan USAFacts, which helps Americans make informed political decisions. And friends say this is the kind of guy who still complains about the cost of the hotel minibar…
Jon Wertheim: How does wealth like you have of that scale, how does that not fundamentally change you?
Steve Ballmer: Look, I-- I am fundamentally changed. I know I am. I have been catered to as CEO of Microsoft. Forget money. When you're the lead job in a company, particularly in the company's good side, people cater to you. So I get catered to. Can I still have fun in old-style ways? Do I have to be a jerk to people? No, I don't-- I don't need to do those things. And, you know, people say, "Ah, did you always wanna own a basketball team when you were growing up?" Of course not. Who the heck ever thinks you're gonna get enough money to own a basketball team?
The basketball team… Ballmer concedes, it's his billionaire's extravagance. He's loved hoops since childhood, and in 2014, just months after Ballmer announced his retirement from Microsoft, the Clippers' previous owner, Donald Sterling, was caught on tape in a racist tirade. Following public outcry and a player revolt, Sterling was forced to sell the team.
In position for the rebound so to speak, Ballmer bought the lowly Clippers for almost four times the price of the previous NBA team sale.
Jon Wertheim: If this was a distressed asset at the time-- owner makes racist statements, basically forced to sell, y-- you didn't pay distressed asset prices, did you?
Steve Ballmer: 'Cause it really wasn't a distressed asset in the following sense. It's an NBA team. There's 30 of 'em. It's in the best market m-- one of the couple best markets-- y-- that's-- you could say it's distressed, but you can't find 'em anywhere else. (laugh)
Jon Wertheim: Lakers are top banana in this town as far as basketball teams. Are you OK with that?
Steve Ballmer: It's a fact they've won, whatever it is, 17 championships, we've not won one. I get that. But am I OK with it? No, of course not. Do I take it as a challenge? (clap) Yes. Are we gonna get after it? Yes, every day we get after it.
Ballmer has pumped money into upgrading the Clippers' roster, signing stars like James Harden and Kawhi Leonard, who praise their new boss.
But the biggest obstacle to success, Ballmer found: the Clippers' didn't have a home. Since the 90s, the team basically rented out the Lakers' arena in downtown LA. Ballmer decided to build southwest of downtown in less fashionable Inglewood. The owner was involved in every—and we mean every—detail.
Steve Ballmer: Can I show you toilets?
Jon Wertheim: Can you show me toilets: I've never--
Steve Ballmer: We got 1,400 of 'em. (laugh) I-- I really hate it when people wait in line. Waiting in line for toilets, I think is - it stops people from getting back into the game–people get frustrated.
We'll spare you that porcelain tour, but there is a method here. Get fans in their seats—or out of them—to watch the damn game… no lines. No cash registers—everything here is contactless. Not even a sports bar ...even the suites are barebones. The owner comes to watch basketball, not to schmooze. And fans should, too.
Steve Ballmer: Our scoreboard, the Halo Board. Right now, we're just showing ya some of the things about Terance Mann.
Part of the philosophy: build it nice, today's opponents are tomorrow's free agents… but also build the kind of arena that reflects the owner. Tech is deployed throughout… but mostly to encourage Ballmer-level fandom.
Steve Ballmer: We have sensors around the building that can tell-- down to the individual-seat level, how loud you are. Now, we're not listening to your conversation. But let's say we say, "OK. For this game, the person who produces the most decibels the most consistently will get a free h-- free hamburger the next game."
Jon Wertheim: If you cheer loud, you're screaming and you--
Steve Ballmer: If you cheer l-- we'll say, "Hey, (clap) there he is, the (clap) loudest (clap) guy: Jon Wertheim.
The owner is convinced: the more energy, the more points the Clippers put up.
Steve Ballmer: We don't have any supporters up there right now, but--
Jon Wertheim: You gonna shoot?
Steve Ballmer: Why don't you shoot that ball. No time to warm up.
Jon Wertheim: I need-- all right. Here we go--
Steve Ballmer: What I'm doing to you is totally unfair– (yells) (laugh) For 60 Minutes. Alright let me see if I can make one with your (noise) you've got a little game there, man.
Ballmer is quick to concede his highest level of basketball was 9th grade, no cuts.
Jon Wertheim: There you go. (bouncing) Alright. See.
Steve Ballmer: That's not a good (dribbling) free throw shooting percentage.
It's different from running Microsoft, a company with revenues that are 20 times higher than the entire NBA. But Ballmer says he's having more fun in this job, in part because it's much easier to measure performance.
Steve Ballmer: People ask me what's the difference between business and basketball. Well, if you have a bad quarter you can say, "I'll get him next time," or, "You don't know what we got goin' on in the labs but it's gonna be great." Here every 24 seconds you get a scorecard. "Did we score? Did we stop them from scoring?" Every 24 seconds. At the end of the game if you lose it, you can never change it. Every season when it's done, it's done. Now, the nice thing is you also get to reset every year, and that's-- you know, that's pretty cool.
Produced by David M. Levine. Associate Producer, Elizabeth Germino. Edited by Robert Zimet.
