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Celtics/NBA Boston Celtics sold to William Chisholm for reported $6.1 billion

I don't know what to think just yet.

One hand, I'm glad it wasn't the Fenway crew.

On the other...I don't know if all these voices are gonna work.


Hopefully it works out.
 
The Pagliuca stuff isn't great, but to me it comes down to how much Chisholm owns. The NBA requires a controlling owner to own at least 15% of the franchise, is Chisholm just meeting that minimum or more? PE firms are notorious for using significant debt to finance their acquisitions. How much debt is involved here? The fact that Sixth Street, a PE firm, is putting in at least $1b isn't the best sign (I'm guessing they're going to own 20%, since that's the max a PE firm can own in the NBA).

Having said all that, I'm not quite ready to panic because, to me, there's a difference between someone in private equity owning a team on their own versus a private equity firm owning the team (see the fact that there are quite a few PE involved in the current ownership group), but we're going to need to find out more info on the financials before we can really see what the deal is. I'm sure there will be a lot more coming out in the coming weeks, but if you're hoping the deal will fall through, I wouldn't hold your breath.
 
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I just dont see the PE angle here. Celtics are only a brand so buying the team and stripping it down wont make much money with the high purchase price.

Now if the owned an arena, TV, real estate I would be worried but just the Celtics? I just dont see how it would benefit a firm to undo what has been done the past few years
 
Morris Wanchuk said:
I just dont see the PE angle here. Celtics are only a brand so buying the team and stripping it down wont make much money with the high purchase price.

Now if the owned an arena, TV, real estate I would be worried but just the Celtics? I just dont see how it would benefit a firm to undo what has been done the past few years
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There is talk that the bid is higher than 6.1 billion and some of it is being held for a new arena, which makes sense.
 
Morris Wanchuk said:
I just dont see the PE angle here. Celtics are only a brand so buying the team and stripping it down wont make much money with the high purchase price.

Now if the owned an arena, TV, real estate I would be worried but just the Celtics? I just dont see how it would benefit a firm to undo what has been done the past few years
Click to expand...

Stripping a business for parts may be a common tactic of private equity firms, but it's not like that's their only operating method. Their goal is simply to create the largest return for investors as quickly as possible. PE firms typically only hold a portfolio company for 3-5 years, so they enter it primarily thinking about how to make it look as attractive as possible to a potential buyer. Since they're not focused on long-term sustainable success, they inevitably end up focusing on cutting costs because that's easier to do than to implement a new operating model to drive top-line growth (which is also expensive).

At face value, sports teams are kind of a weird investment for private equity firms because they aren't sold often and mostly looked at as longer-term investments. On the other hand, it does fit the PE operating model because the real return for a sports franchise is in its sale, not annual operations, and private equity firms view their portfolio companies the same way.
 
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Smitty93 said:
The Pagliuca stuff isn't great, but to me it comes down to how much Chisholm owns. The NBA requires a controlling owner to own at least 15% of the franchise, is Chisholm just meeting that minimum or more? PE firms are notorious for using significant debt to finance their acquisitions. How much debt is involved here? The fact that Sixth Street, a PE firm, is putting in at least $1b isn't the best sign (I'm guessing they're going to own 20%, since that's the max a PE firm can own in the NBA).

Having said all that, I'm not quite ready to panic because, to me, there's a difference between someone in private equity owning a team on their own versus a private equity firm owning the team (see the fact that there are quite a few PE involved in the current ownership group), but we're going to need to find out more info on the financials before we can really see what the deal is. I'm sure there will be a lot more coming out in the coming weeks, but if you're hoping the deal will fall through, I wouldn't hold your breath.
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Good info Smitty keep it coming - I know this is an area you know a lot more than me

1. Controlling owner minimum stake In ownership is 15%

We don’t know Chisholm’s %

2. Private Equity as relates to NBA ownership

20% maximum amount a PE firm (Sixth Street here) can own (that’s 1.2 B here )

They are ‘notorious’ for financing with debt

3. Chisholm & his investors would be responsible for personal holdings of 5 B ???

4. The Celtics will have approx 700 M in contracts tied up with the J’s and White ~ and expect to have 200 M in luxury tax (how is this even possible and how the hell did the owners allow a system like this to be put in place the league can eat them up? Like Jaylon Brown or Jayson Tatum would not play for 5 M vs 50 M

5. The Celtics don’t own building, concessions, parking

Going to bleed into Jacobs
 
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