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WHEN: Today, Thursday, September 25th
WHERE: CNBC's "Squawk Box"
Following is the unofficial transcript of a CNBC interview with former Microsoft CEO and new LA Clippers owner Steve Ballmer today on CNBC's "Squawk Box." Following are links to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000313761 and http://video.cnbc.com/gallery/?video=3000313742.
All references must be sourced to CNBC.
JOSH LIPTON: Steve, thanks again for doing this. We appreciate it. I guess my first question, Steve was, you know, why at this point in your life, with all you've accomplished, why was now the time to buy a basketball team?
STEVE BALLMER: Well I always knew I wanted to have a chapter of my life post-Microsoft. And I guess at least during the last several years when I've had the resources to think about it, I thought it'd be really fun. And Paul Allen, who co-founded Microsoft, told me it'd be really fun for me to own a sports team. Basketball, I liked football too a lot, but basketball clearly my first love.
And so soon as I retired, officially in February, first thing I did was fly to New York, spend a little time with then-commissioner Silver, because he'd taken over, and start kind of brainstorming how one gets really involved with this, because my previous attempts hadn't worked. And I'm excited to be here.
JOSH LIPTON: Let me ask you, Steve. You pay $2 billion. Some, you know, thought you overpaid. How do you justify that price tag when you think about it?
STEVE BALLMER: Right. If you were like a real, like, sort of, like, financial guy, like a CNBC viewer, you would say, "Okay, there's two things to anything. What kind of earnings can you make per year? Call that the dividend. And what kind of appreciation will you make?" And you put the two things together and you get a return on capital. So can the Clippers make money? Yes. Can they make more money than any other team in the NBA? Yeah, should be in the upper echelon. Maybe the Lakers, the Knicks, because we're in a big market.
We have more opportunity than you do in a Milwaukee or a smaller market. We will make good money, whether we make 1%, 2%, 3% dividend, who knows. I make no forecast, but we will make a positive dividend. And then on top of that sports teams basically trade like the north end of an S&P index fund.
And particularly in Los Angeles, this is scarce property. This will appreciate. I expect to own this as long as I'm alive. So we're talking, let's hope, you know, 25, 30 years, something like that, but I would expect it to have capital appreciation that's at least as good or better as the S&P index fund and as an S&P index fund and at the same time, deliver dividend returns.
JOSH LIPTON: If you're that optimistic, Steve, about the prospects, would you have been willing to pay three billion then?
STEVE BALLMER: I would be silent on that point. No one ever talks about what they would have done. I know I bid the most and I bought the team.
JOSH LIPTON: Let me ask you--
STEVE BALLMER: I was not-- and I wanted to.
JOSH LIPTON: Your new role here it calls for some new skills. Are you reaching out for guidance, for advice about that? And what if so, what's the best advice you've gotten?
STEVE BALLMER: Well, there's a lot of people who can and teach you, inform you, coach you up. You know, Adam Silver. That's been great. Paul Allen is an owner, Mark Cuban. Gotten advice from Dan Gilbert, who owns the Cavaliers, who's another Detroit guy, like I am. Pete Carroll, who's my neighbor, who coaches the Seahawks. He and his general partner, general manager John Schneider, they had me into the Seahawks camp. They kind of coached me on this stuff.
JOSH LIPTON: I remember you actually sought Coach Carroll's advice before too, right? When you were at Microsoft?
STEVE BALLMER: Yeah, I mean we know Pete reasonably well, because he's a neighbor and he's gotten us – both my wife and I separately involved in some not-for-profit stuff, but yeah on this one specifically, he said, "Hey, we'd be glad to explain how we do it." Well, they just won a championship, so I was super-interested.
JOSH LIPTON: When you think – so you got advice, Steve, but how do you imagine your own role? What do you think your contribution is going to be to this franchise?
STEVE BALLMER: Well, we will obviously, Doc Rivers runs basketball operations, which is great. He's a tremendous talent. We will have somebody who runs the business side of this team. I expect to push, to ask questions, to support, to be a fan. And I have to run the team, so to speak, but I expect to be kind of an actively involved, but delegating-- manager or leader, if you will.
JOSH LIPTON: I'd imagine, Steve, some Clippers fans are going to listen to this and they're going to say, "you know, Ballmer's not a California guy." I mean, are you promising fans that this team's going to stay here in this city?
STEVE BALLMER: Yes. The Clippers are the LA Clippers and they will remain the LA Clippers. There is no question about that. I live in Seattle. I will continue to live in Seattle. I'll be down here a lot for a lot of games.
JOSH LIPTON: Switching to the business of the Clippers, you know, several sponsors, they pulled out last year with Donald Sterling. Can you give us the current status on those sponsors? I mean, are you talking to them?
STEVE BALLMER: Well, the specific sponsors I won't comment on and our people are. I would say the mood and support from the fans, from the sponsors, from the LA community has been fantastic. People are anxious to almost even more anxious to what I'd say embrace a new era. People love the notion of the Clippers in this kind of hardcore way battling through not only many years of on-court trouble, but we've got a good team now. And now we've had some off-court trouble and the team has been intense. It's been hardcore. It did its job. It stayed focused. It was an exemplary model for what you would want to have happen. And I think a lot of people think the right things did happen. So we see kind of the business community wanting to embrace the Clippers and, you know, in a sense, we need to figure out how to do a good job of accepting that embrace.
JOSH LIPTON: You mentioned the off-court troubles, Steve, you know, and I talk about Donald Sterling. Did you guys ever communicate? Did you ever reach out to him?
STEVE BALLMER: We had one meeting during the course of the – sort of the process, if you will. Perfectly nice meeting. Obviously the matter still needed to be litigated between Mr. and Mrs. Sterling and I'm just glad to be the owner today.
JOSH LIPTON: Was that – what was it like to reach out to him? I imagine that was sensitive at the time.
STEVE BALLMER: Well, I mean, we were, you know, we had made a deal. We had in place an agreement for me to buy the team and I was kind of hoping we might be able to get things resolved without further litigation. That didn't work, but it was a perfectly civilized meeting.
JOSH LIPTON: Let me ask you, you know, you're not just a basketball fan. You're a football fan. You know, the NFL has been making headlines for all the wrong reasons lately. What are you going to do in this role to try to make sure, Steve, that your athletes, your players act responsibly when they're off the court?
STEVE BALLMER: Well, at the end of the day you know, it's our job to try to put together a great team with great people. People with high integrity, high character. Doc talks about something he calls the five Cs. Character is one of the five. That's very important to him, to me. It was very important to me at Microsoft.
So we'll do our best and then at some point, you also have to knock on wood, because, you know, things happen in life and you've got to respond the right way. And I think one of the things the NBA can be very proud of is the way, you know, the league and particularly Commissioner Silver responded to the troubles here. And I think, you know, we would hope to respond in times of crisis, which does happen in a very positive way and obviously, the NFL's kind of sorting that through right now.
JOSH LIPTON: Do you have thoughts about, you know, listen, Roger Goodell and how you're now a professional sports owner. Do you have thoughts about how he's performed and dealt with the situation?
STEVE BALLMER: You know, I'm not an expert. They're dealing with, I think, a very difficult subject and I wish them well, where them is the owners, them is the league, them is the players, them is the fans of football. Football's a great sport and I wish them well navigating through these kind of tough times.
JOSH LIPTON: Switching gears a bit here, Steve, you know, you were at Microsoft 30 years.
STEVE BALLMER: They're almost 34, but who's counting, Josh? I am!
JOSH LIPTON: When you think about your time there, Steve, are there skills that you learned as a role of Microsoft CEO that you think you can now bring here as the owner of the Clippers?
STEVE BALLMER: Absolutely. Absolutely. I'm teaching a class for the next few weeks at Stanford. It's just sort of a little half-class, but I had to sort of take what I learned at Microsoft and kind of abstract it into a set of lessons, but they seem to work pretty well. Be hardcore, be passionate. Ideas matter. You actually have to have a strategy for what you want to do. And where you're going is as important as sort of the quality of your leadership of the people to get there.
See the playing field. Understand what's going on. Take the time to really learn, you know, keep coming. Keep charging. Keep going. You know, there's an expression out of an old movie. Relationships are like sharks. They move forward or they die. Well, companies, teams, organizations, you're either improving and getting better or you are dying. So yeah, I think there's some things that probably apply to sports too.
JOSH LIPTON: I think, Steve, you just answered my next question, but you know, people, when they think of you as Microsoft CEO, they think about the passion, the emotion, the commitment. Is this what we should expect on courtside as the Clippers owner now too? Those same characteristics?
STEVE BALLMER: I think so. I mean, I'm a very positive leader. You know, I'm not – you could find a quote or two where I'll have talked about various Microsoft competitors. I'm a competitive guy. But mostly, you know, I'm very positive about my guys and what we're doing. I love the Microsoft Surface. I like the Microsoft Windows Phone. I love the LA Clippers and yeah, I'm going to be enthusiastic about those things.
JOSH LIPTON: Let me ask you. I mean, obviously, you still talk with so much pride about Microsoft. When you look back now a bit, you know, and as soon as you stepped down. You had your fans. You had your critics. How do you – I'm just curious how you grade your own time there as CEO. How do you think about it?
STEVE BALLMER: Let me tell you how great my own time. I joined as sort of a number two guy. We had 30 people and two and a half million in revenue. I left. We were 80 billion and 100,000 and we were making close to closing in on 30 billion of pre-tax profits. How would you feel? This is CNBC. By the numbers, I feel pretty good.
JOSH LIPTON: Well, let me ask --
STEVE BALLMER: Do I know – are there a couple things I would do different if I could do them again? Of course. There's always a couple things you'd do different. And yeah, I kick myself on those things, because I'm a guy who pushes to be his best, but when you look at it as sort of a body of work, we went from nothing. We really created the PC. That's an amazing thing. We created personal productivity as people know it today. We revolutionized the data center and the way IT organizations work and we didn't quite get the mobile thing right, yet. That's kind of the record in a nutshell.
JOSH LIPTON: Here's what the critics – I want to give you a chance to respond to critics, Steve, because they'll say revenue tripled to 83 billion, but they'll say Ballmer missed big trends of mobile and social, cloud. Is that a fair criticism?
STEVE BALLMER: Anything anybody says is fair. They're all welcome to say what they want to say. No one company will do everything. I mean, the key isn't to say, "Hey, that company should do everything." Apple's a failure because they missed social. Nobody would say that, because they're having great success. We've had great success.
Do I believe, with 20/20 hindsight, I see how we could have navigated, particularly mobile, differently than we did? Yes, I do. Do I think the company's on that path today? Yes, I do. Am I an enthusiastic shareholder because of that? Yes, I am. On the other hand, did we do a few things right? Absolutely. And do I wish I'd done a few things differently? Absolutely.
JOSH LIPTON: You are, in fact, the biggest individual shareholder there, so let me get your take. Satya Nadella. How do you judge his role there so far, his performance?
STEVE BALLMER: I'm excited and enthused to have Satya in the job. He's made a couple big decisions, which are I think are important. There was work we had to do to rationalize the Nokia acquisition. Satya built on that and took that an extra step. He's done a big acquisition. He, you know, has really come out strong in terms of the cloud and mobile, which I think is fantastic. I know he's built an incredible followership and the leadership team. So I think he's off to a fantastic start.
But truth is, you can't really tell how anybody's doing in the tech business for at least five or ten years. The key decisions that are getting made, you won't even see those in products for a year, two years, three years. And so the jury, as it is on me, you take any one period of time, I probably looked either better or worse than I looked at any other one period of time, and since always about the body of work.
JOSH LIPTON: Let me ask you, season starts officially October 30th. Chris Paul, Blake Griffin, some real superstars. What are your expectations for this team this year?
STEVE BALLMER: I want this team to be the best it can be. I think I want it to be better than the team we had last year. I know everybody's in here working all the time. I'm really excited about that. And if we improve, if we work hard, if we play well as a team and if we are really hardcore, intense, which the personality of the guys, from Doc to Chris to Blake to DeAndre, as well as the rest of the guys, we'll have a lot of success. We need a little bit of luck to you know, to have all the success we want. But we're going to be a very good team.
JOSH LIPTON: Alright, Steve, thank you so much for your time. I really appreciate it.
STEVE BALLMER: Thanks, Josh.
JOSH LIPTON: Thank you.
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