Woj Bomb: Celtics Ownership looking to Sell

[Celtics2021]

I wonder who leaked the story in the first place.

Pags because he doesn?t want to sell/is upset that it is happening, and wants the sale price to be lower so he has a chance of being part of the new purchase group.

[Vermont Green]

I think the story could be true (that the team is in the red at times).  Keep in mind that cash flow and profits are two different things.  They are not really losing money because the value of the franchise is increasing, but they could well be operating, at times, at a negative cash flow.

There has not been a capital call from ownership, or any additional investment of any kind, in the 22 years since Boston Basketball Partners bought the team and we don't anticipate there being one.

This is the key statement.  If there have been any periods of negative cash flow, they were managed well enough so that none of the investors had to put in more capital (cash).  I suspect they have a line of credit that they dip into from time to time to smooth things out so that the cash doesn't need to come out of the partner's pockets.

Profits (retained earnings) get taxed but there are many ways to manage this.  I bet pretty much every year, the partners all get a dividend check so that the team or the business unit shows a break even or a loss.  Or they figure out ways to reinvest the profits into the business.

So unless they have run up a bunch of debt, they can't be losing money overall if the partners are not putting more money into the business.  If they were in fact losing money overall from an operational standpoint, either the partners would have to be making up the difference with new cash or they would have to be running up new debt.  They have stated that the former has not happened, it is possible that the latter is true though.

[Donoghus]

I wonder who leaked the story in the first place.

Pags because he doesn?t want to sell/is upset that it is happening, and wants the sale price to be lower so he has a chance of being part of the new purchase group.

Interesting theory.  I've also seen a theory that one of Wyc's siblings leaked the story since Celtics operations would be eating into their inheritance.

[Roy H.]

Wasn?t aware they were barely breaking even, even in a championship year. Not entirely surprised though. Often times, you don?t make money until you sell the team.

The Celtics have made money every year of Wyc's tenure:

https://www.statista.com/statistics/286033/operating-income-of-the-boston-celtics-national-basketball-association/

[Donoghus]

Wasn?t aware they were barely breaking even, even in a championship year. Not entirely surprised though. Often times, you don?t make money until you sell the team.

The Celtics have made money every year of Wyc's tenure:

https://www.statista.com/statistics/286033/operating-income-of-the-boston-celtics-national-basketball-association/

They're probably doing some funky crap with the tax accounting. Most likely through depreciation/amortization.   A reminder that tax accounting and financial accounting are two different things.

[86MaxwellSmart]

Even if they broke even every year, they still would be making 10-15 times their investment overall...screw Wyc's pop.
Good job Wyc.

[bdm860]

Wasn?t aware they were barely breaking even, even in a championship year. Not entirely surprised though. Often times, you don?t make money until you sell the team.

The Celtics have made money every year of Wyc's tenure:

https://www.statista.com/statistics/286033/operating-income-of-the-boston-celtics-national-basketball-association/

They're probably doing some funky crap with the tax accounting. Most likely through depreciation/amortization.   A reminder that tax accounting and financial accounting are two different things.

Or could just be lack of transparency.

The Statista source is Forbes annual valuations, which are just best guesses.

We can compare to the then-Hornets-now-Pelicans, who had their financial data released way back in 2010. Forbes had their 2008 operating income at 3.2m, while their actual operating income was -6.4m and net income was -16.6m. For 2009, Forbes has their operating income at -0.1m, while their actual operating income was 5.8m, and net income was 1.8m.

https://www.statista.com/statistics/286127/operating-income-new-orleans-pelicans-national-basketball-association/

On the flip side, the Warriors owner complained the Forbes figures underestimated their revenue:

Lacob takes issue with Forbes? more granular details, such as revenue estimates.

?Forbes is more of a general indicator. Its revenue estimates are understated for Golden State,? Lacob said. ?We have much more revenue than the Knicks and Lakers.?

Forbes estimated that the Warriors generated $440 million in revenue for the 2018-19 season versus $472 million for the Knicks and $434 million for the Lakers.

All that to say, I wouldn't take the Statista/Forbes figures as fact.

[Roy H.]

A longtime Boston Celtics owner with a minority stake in the team is angling to gain control of the storied franchise ? at a discount from the expected $6 billion asking price, The Post has learned.

Steve Pagliuca, who owns about 20% of the reigning NBA champs, has pressed minority shareholders who own roughly another 30% to fall in with him in bidding for the Celtics, sources close to the situation said.

If he can get firm commitments from the other investors, it would give him leverage over any deep-pocketed buyers who may jump in as the bidding process tips off, the sources said.

I'm conflicted.  While I'd like the continuity of Pags, I sort of prefer the idea of somebody with "deep pockets".  I don't want to see this team get broken up prematurely.

[Roy H.]

A longtime Boston Celtics owner with a minority stake in the team is angling to gain control of the storied franchise ? at a discount from the expected $6 billion asking price, The Post has learned.

Steve Pagliuca, who owns about 20% of the reigning NBA champs, has pressed minority shareholders who own roughly another 30% to fall in with him in bidding for the Celtics, sources close to the situation said.

If he can get firm commitments from the other investors, it would give him leverage over any deep-pocketed buyers who may jump in as the bidding process tips off, the sources said.

I'm conflicted.  While I'd like the continuity of Pags, I sort of prefer the idea of somebody with "deep pockets".  I don't want to see this team get broken up prematurely.

[CelticsWhat35]

A longtime Boston Celtics owner with a minority stake in the team is angling to gain control of the storied franchise ? at a discount from the expected $6 billion asking price, The Post has learned.

Steve Pagliuca, who owns about 20% of the reigning NBA champs, has pressed minority shareholders who own roughly another 30% to fall in with him in bidding for the Celtics, sources close to the situation said.

If he can get firm commitments from the other investors, it would give him leverage over any deep-pocketed buyers who may jump in as the bidding process tips off, the sources said.

I'm conflicted.  While I'd like the continuity of Pags, I sort of prefer the idea of somebody with "deep pockets".  I don't want to see this team get broken up prematurely.

Agreed; if someone needs to pool investors together, they can?t afford this team and the annual salaries

[Celtics2021]

A longtime Boston Celtics owner with a minority stake in the team is angling to gain control of the storied franchise ? at a discount from the expected $6 billion asking price, The Post has learned.

Steve Pagliuca, who owns about 20% of the reigning NBA champs, has pressed minority shareholders who own roughly another 30% to fall in with him in bidding for the Celtics, sources close to the situation said.

If he can get firm commitments from the other investors, it would give him leverage over any deep-pocketed buyers who may jump in as the bidding process tips off, the sources said.

I'm conflicted.  While I'd like the continuity of Pags, I sort of prefer the idea of somebody with "deep pockets".  I don't want to see this team get broken up prematurely.

Agreed; if someone needs to pool investors together, they can?t afford this team and the annual salaries

Almost assuredly it will be a purchasing group of investors, not a single owner.  That?s just how it goes these days.

Also, that Pags is trying to figure out a way to get the Celtics more cheaply does not mean that he is necessarily cheap, if that makes sense.  It is a multi-billion dollar deal.  He wants the Celtics, but also at the lowest possible price, which tends to be how most people buy expensive things.  So if he can get 50% of the current shares to want to stick around, they can prevent a sale to a third-party (unless they are offered even more than the current asking price, which would probably peel some of them off).

[timpiker]

I don't really much care who buys the team.  I just want an unlimited supply of money and many, many more championships. 

[Roy H.]

A longtime Boston Celtics owner with a minority stake in the team is angling to gain control of the storied franchise ? at a discount from the expected $6 billion asking price, The Post has learned.

Steve Pagliuca, who owns about 20% of the reigning NBA champs, has pressed minority shareholders who own roughly another 30% to fall in with him in bidding for the Celtics, sources close to the situation said.

If he can get firm commitments from the other investors, it would give him leverage over any deep-pocketed buyers who may jump in as the bidding process tips off, the sources said.

I'm conflicted.  While I'd like the continuity of Pags, I sort of prefer the idea of somebody with "deep pockets".  I don't want to see this team get broken up prematurely.

Agreed; if someone needs to pool investors together, they can?t afford this team and the annual salaries

Almost assuredly it will be a purchasing group of investors, not a single owner.  That?s just how it goes these days.

Also, that Pags is trying to figure out a way to get the Celtics more cheaply does not mean that he is necessarily cheap, if that makes sense.  It is a multi-billion dollar deal.  He wants the Celtics, but also at the lowest possible price, which tends to be how most people buy expensive things.  So if he can get 50% of the current shares to want to stick around, they can prevent a sale to a third-party (unless they are offered even more than the current asking price, which would probably peel some of them off).

I don't fault Pags for wanting to pay the lowest amount possible.  I just worry that he's cash poor (in relative terms), and thus would be less likely to operate the team at a loss for a season or two.

[Neurotic Guy]

A longtime Boston Celtics owner with a minority stake in the team is angling to gain control of the storied franchise ? at a discount from the expected $6 billion asking price, The Post has learned.

Steve Pagliuca, who owns about 20% of the reigning NBA champs, has pressed minority shareholders who own roughly another 30% to fall in with him in bidding for the Celtics, sources close to the situation said.

If he can get firm commitments from the other investors, it would give him leverage over any deep-pocketed buyers who may jump in as the bidding process tips off, the sources said.

I'm conflicted.  While I'd like the continuity of Pags, I sort of prefer the idea of somebody with "deep pockets".  I don't want to see this team get broken up prematurely.

Agreed; if someone needs to pool investors together, they can?t afford this team and the annual salaries

Almost assuredly it will be a purchasing group of investors, not a single owner.  That?s just how it goes these days.

Also, that Pags is trying to figure out a way to get the Celtics more cheaply does not mean that he is necessarily cheap, if that makes sense.  It is a multi-billion dollar deal.  He wants the Celtics, but also at the lowest possible price, which tends to be how most people buy expensive things.  So if he can get 50% of the current shares to want to stick around, they can prevent a sale to a third-party (unless they are offered even more than the current asking price, which would probably peel some of them off).

I don't fault Pags for wanting to pay the lowest amount possible.  I just worry that he's cash poor (in relative terms), and thus would be less likely to operate the team at a loss for a season or two.

Excuse the naive question but can the Grousebecks sell to Pags at a discount or are they obligated (legally) to sell to the highest bidder?

[Roy H.]

A longtime Boston Celtics owner with a minority stake in the team is angling to gain control of the storied franchise ? at a discount from the expected $6 billion asking price, The Post has learned.

Steve Pagliuca, who owns about 20% of the reigning NBA champs, has pressed minority shareholders who own roughly another 30% to fall in with him in bidding for the Celtics, sources close to the situation said.

If he can get firm commitments from the other investors, it would give him leverage over any deep-pocketed buyers who may jump in as the bidding process tips off, the sources said.

I'm conflicted.  While I'd like the continuity of Pags, I sort of prefer the idea of somebody with "deep pockets".  I don't want to see this team get broken up prematurely.

Agreed; if someone needs to pool investors together, they can?t afford this team and the annual salaries

Almost assuredly it will be a purchasing group of investors, not a single owner.  That?s just how it goes these days.

Also, that Pags is trying to figure out a way to get the Celtics more cheaply does not mean that he is necessarily cheap, if that makes sense.  It is a multi-billion dollar deal.  He wants the Celtics, but also at the lowest possible price, which tends to be how most people buy expensive things.  So if he can get 50% of the current shares to want to stick around, they can prevent a sale to a third-party (unless they are offered even more than the current asking price, which would probably peel some of them off).

I don't fault Pags for wanting to pay the lowest amount possible.  I just worry that he's cash poor (in relative terms), and thus would be less likely to operate the team at a loss for a season or two.

Excuse the naive question but can the Grousebecks sell to Pags at a discount or are they obligated (legally) to sell to the highest bidder?

I believe they can sell their shares to whoever they'd like, subject to NBA approval.