Celtics Sell for $6.1 Billion

[Celtics2021]

Bet Red would have wanted Pags to have the team.
His comments sounded like his heart was broken. Sometimes, there are more important qualities to consider in our owner than their checkbook balance, especially for the Celtics, who remain at least still a little unique, in the NBA to my mind. I'm being nai've I know. Always the dollar.

This guy said a lot of perfect things, but let's hope he is not another John Y ...................

I wonder how close Pags's offer was, and if there was any type of bidding war, or was it just best and final right out the gate?

Part of Pags's statement after losing out was: "we made a fully guaranteed and financed offer at a record price." Washington Commanders sold for $6.05b so if that's the record Pags was referring to then the offer seems like it would have been pretty close to Chisolm's, at least on the surface. Of course he could also be referring to a record for NBA franchises, which has a much lower bar of only $4b (Phoenix Suns).

Definitely a record NBA price as opposed to US sports price.  Also, Chisholm used to work for Bain before leaving to start a competitor, so I wouldn?t be surprised if there is some long-simmering animosity between the two.

[Roy H.]

Bet Red would have wanted Pags to have the team.
His comments sounded like his heart was broken. Sometimes, there are more important qualities to consider in our owner than their checkbook balance, especially for the Celtics, who remain at least still a little unique, in the NBA to my mind. I'm being nai've I know. Always the dollar.

This guy said a lot of perfect things, but let's hope he is not another John Y ...................

I wonder how close Pags's offer was, and if there was any type of bidding war, or was it just best and final right out the gate?

Part of Pags's statement after losing out was: "we made a fully guaranteed and financed offer at a record price." Washington Commanders sold for $6.05b so if that's the record Pags was referring to then the offer seems like it would have been pretty close to Chisolm's, at least on the surface. Of course he could also be referring to a record for NBA franchises, which has a much lower bar of only $4b (Phoenix Suns).

Definitely a record NBA price as opposed to US sports price.  Also, Chisholm used to work for Bain before leaving to start a competitor, so I wouldn?t be surprised if there is some long-simmering animosity between the two.

Yeah, there's a wide, wide gap between a "record price" that beats $4 billion (the most paid for an NBA team) and $6 billion (the most paid for a North American sports team).

And also, a reminder that the second phase of this includes sale of remaining shares at $7.3 billion, an even more crazy valuation.

[Kuberski33]

That sale figure is insane.

The new ownership group must know something that we the public do not. As a private equity firm, they only want financial returns (either short or long term).

The Boston Celtics obviously do not own their own arena, so unlike the Warriors ownership group, the Celtics cannot look to expand revenue streams.

Chisholm is the majority investor in the group buying the team is the way I read this. And while he's made his money in private equity, a private equity firm isn't buying the Celtics. So I don't think financial returns are the main objective, though these franchises all escalate in value it seems and with expansion around the corner that's not likely to change. 

I do think the key question is does he want to build an arena? And then, of course, where is the even bigger question - I strongly doubt it would be within the city of Boston, but who knows?

Per an Athletic article. a private equity firm is involved. 

Sixth Street, a private equity firm, is also buying a portion of the team and will put in more than $1 billion, an industry source said. The firm bought into the Spurs in 2021 and is now one of three firms with investments in multiple NBA franchises.

Yeah, I was wrong. Andrew Brandt talked about it on his podcast. The percentage Sixth Street would have is about in the middle of what NBA rules currently allow.

[Big333223]

It's good to hear it's someone who grew up in Massachusetts and is, reportedly, a big fan of the team. We'll have to wait and see how committed he is to winning.

I think Wyc staying on as Governor for the next 3 years is a good sign, both because it means there will be continuity through the transition, and also because it suggests to me Chisholm isn't looking to come in and throw his weight around. He's willing to work alongside Wyc, at least for a little while.

Like I said, we'll have to see what he does, but for those worried about the private equity side of things, let's not forget Pagliuca made his money the exact same way.

[aefgogreen]

It's good to hear it's someone who grew up in Massachusetts and is, reportedly, a big fan of the team. We'll have to wait and see how committed he is to winning.

I think Wyc staying on as Governor for the next 3 years is a good sign, both because it means there will be continuity through the transition, and also because it suggests to me Chisholm isn't looking to come in and throw his weight around. He's willing to work alongside Wyc, at least for a little while.

Like I said, we'll have to see what he does, but for those worried about the private equity side of things, let's not forget Pagliuca made his money the exact same way.

As you've said, he's saying the right things right now and we have to wait to find out if he's sincere.  I'm skeptical that Wyc is still going to be calling the shots in the short term.  They said that about Cuban in Dallas too.  At the end of the day, if Wyc and Chisolm disagree, Chisolm is going to pull rank.

[slightly biased bias fan]

That sale figure is insane.

The new ownership group must know something that we the public do not. As a private equity firm, they only want financial returns (either short or long term).

The Boston Celtics obviously do not own their own arena, so unlike the Warriors ownership group, the Celtics cannot look to expand revenue streams.

Chisholm is the majority investor in the group buying the team is the way I read this. And while he's made his money in private equity, a private equity firm isn't buying the Celtics. So I don't think financial returns are the main objective, though these franchises all escalate in value it seems and with expansion around the corner that's not likely to change. 

I do think the key question is does he want to build an arena? And then, of course, where is the even bigger question - I strongly doubt it would be within the city of Boston, but who knows?

I think the missing area of financial growth for Chisolm is having a financial stake in events & hospitality.

Not many new ownership groups own their own arena, but the big difference for teams like the Suns, Nets & Mavs is that the cities own the arena and usually give most of the revenue to the team. The Celtics would not earn a share of concert & events revenue, that would go to the Bruins.

[Amonkey]

That sale figure is insane.

The new ownership group must know something that we the public do not. As a private equity firm, they only want financial returns (either short or long term).

The Boston Celtics obviously do not own their own arena, so unlike the Warriors ownership group, the Celtics cannot look to expand revenue streams.

Chisholm is the majority investor in the group buying the team is the way I read this. And while he's made his money in private equity, a private equity firm isn't buying the Celtics. So I don't think financial returns are the main objective, though these franchises all escalate in value it seems and with expansion around the corner that's not likely to change. 

I do think the key question is does he want to build an arena? And then, of course, where is the even bigger question - I strongly doubt it would be within the city of Boston, but who knows?

I think the missing area of financial growth for Chisolm is having a financial stake in events & hospitality.

Not many new ownership groups own their own arena, but the big difference for teams like the Suns, Nets & Mavs is that the cities own the arena and usually give most of the revenue to the team. The Celtics would not earn a share of concert & events revenue, that would go to the Bruins.

I think the question is, where would they build a new arena? I think the current location is so perfect. It's relatively easy to get on and off (close to the highway), selfishly it's also convenient to my house, but close to many bars so a person can watch the game outside, nice area, lots of history in the area, and just overall, a great place. I don't know where else it would be as convenient as it is.

[slightly biased bias fan]

That sale figure is insane.

The new ownership group must know something that we the public do not. As a private equity firm, they only want financial returns (either short or long term).

The Boston Celtics obviously do not own their own arena, so unlike the Warriors ownership group, the Celtics cannot look to expand revenue streams.

Chisholm is the majority investor in the group buying the team is the way I read this. And while he's made his money in private equity, a private equity firm isn't buying the Celtics. So I don't think financial returns are the main objective, though these franchises all escalate in value it seems and with expansion around the corner that's not likely to change. 

I do think the key question is does he want to build an arena? And then, of course, where is the even bigger question - I strongly doubt it would be within the city of Boston, but who knows?

I think the missing area of financial growth for Chisolm is having a financial stake in events & hospitality.

Not many new ownership groups own their own arena, but the big difference for teams like the Suns, Nets & Mavs is that the cities own the arena and usually give most of the revenue to the team. The Celtics would not earn a share of concert & events revenue, that would go to the Bruins.

I think the question is, where would they build a new arena? I think the current location is so perfect. It's relatively easy to get on and off (close to the highway), selfishly it's also convenient to my house, but close to many bars so a person can watch the game outside, nice area, lots of history in the area, and just overall, a great place. I don't know where else it would be as convenient as it is.

For me the best case scenario would be purchasing the TD Garden from the Jacobs family.

From what I have read it will be near impossible to build a new stadium within the Boston area. If the Red Sox & Patriots could not get it done, neither can the Celtics.

[Donoghus]

That sale figure is insane.

The new ownership group must know something that we the public do not. As a private equity firm, they only want financial returns (either short or long term).

The Boston Celtics obviously do not own their own arena, so unlike the Warriors ownership group, the Celtics cannot look to expand revenue streams.

Chisholm is the majority investor in the group buying the team is the way I read this. And while he's made his money in private equity, a private equity firm isn't buying the Celtics. So I don't think financial returns are the main objective, though these franchises all escalate in value it seems and with expansion around the corner that's not likely to change. 

I do think the key question is does he want to build an arena? And then, of course, where is the even bigger question - I strongly doubt it would be within the city of Boston, but who knows?

I think the missing area of financial growth for Chisolm is having a financial stake in events & hospitality.

Not many new ownership groups own their own arena, but the big difference for teams like the Suns, Nets & Mavs is that the cities own the arena and usually give most of the revenue to the team. The Celtics would not earn a share of concert & events revenue, that would go to the Bruins.

I think the question is, where would they build a new arena? I think the current location is so perfect. It's relatively easy to get on and off (close to the highway), selfishly it's also convenient to my house, but close to many bars so a person can watch the game outside, nice area, lots of history in the area, and just overall, a great place. I don't know where else it would be as convenient as it is.

For me the best case scenario would be purchasing the TD Garden from the Jacobs family.

From what I have read it will be near impossible to build a new stadium within the Boston area. If the Red Sox & Patriots could not get it done, neither can the Celtics.

You're not doing it with taxpayer money, that's for sure. 

Also, there's another 10-11 years on the current lease so I don't foresee them getting out of that.

[Donoghus]

Good read here. Some interesting nuggets like the part about Pags not keeping Wyc as CEO

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8 hours ago -
Business
The Boston Celtics sale raises lots of questions

Dan Primack



The Boston Celtics yesterday agreed to be sold to private equity investor Bill Chisholm at a valuation that will reach up to $7.3 billion, easily the highest price ever paid for a pro sports club.

It's also raised lots of questions. So let's do this Q&A style, based on conversations with multiple sources:

Why are others reporting $6.1 billion, which still would be a record?

The press release referred to "an initial valuation of $6.1 billion," but the word "initial" is doing a ton of work.
That's how much Chisholm's group will pay for the control stake this summer, but he won't buy the remaining interests until 2028. The valuation for that second piece could be around $7.3 billion. The weighted price would come out to around $6.7 billion.

Was Chisholm the highest bidder?

Yes. He also agreed to allow seller Wyc Grousbeck to remain as team CEO and NBA governor until the final close in 2028.

That last part is something Grousbeck indicated he wanted when announcing the auction last summer, partially for the sake of continuity, but it was dropped as a requirement somewhere along the way. Chisholm smartly recognized its value.
Remember, Wyc doesn't really want to sell the team. His 91-year-old father Irv does, for estate purposes, and Irv has the much bigger stake.

Does Chisholm have all the money?

No, his bid is not fully financed, and this is where is might get sticky.
Particularly since one of the other bidders, existing owner and Bain Capital exec Steve Pagliuca, did submit a fully financed bid (albeit at a lower price and without Wyc remaining as CEO). An offer from Freedom Mortgage CEO Stan Middleman was priced higher than Pagliuca and lower than Chisholm ? yes, in the middle ? but it's unclear if it was fully financed.
Chisholm still has time, since the NBA won't vote to approve the deal until June. But almost everyone has already seen this opportunity, most at a lower price, so his best chance is to pull some folks from the other three bidding groups.
Pagliuca will certainly try to hold his people firm as a possible Plan B, while foutth-place bidder Dan Friedkin already seems to have moved onto an NHL expansion effort in Houston.

Is this a private equity deal?

Sort of. Chisholm is doing this as an individual. His firm, Symphony Technology Group, has no piece of it.
But the bid is being backed by a giant check from Sixth Street Partners, which has other NBA club interests, and there's almost certainly structure on there. Pagliuca's bid, for what it's worth, didn't include institutional money, although there were conversations.

Is this a good deal?

For Chisholm it is. He was born and raised in Massachusetts, even though he now lives in California, and owning the Sacramento Kings just isn't the same.

For Sixth Street, it may come down to that structure. On its surface, it looks kind of awful, even if NBA team values keep climbing.
The Celtics don't own their arena, which means the team doesn't get money from tickets or concessions. Let alone from renting it out for concerts or leasing space to other retailers. Plus, the team is about to begin paying a ton of luxury tax on its high-priced roster, thus is expected to lose money (even if it wins another title this year), and has diminishing returns from its local TV deal.
Don't be surprised if Chisholm takes a year or two of loss so that he can best enjoy those courtside seats, and then looks to pare costs.

Anything else interesting?

Grousbeck was advised by BDT & MSD Partners, whose co-CEO is Gregg Lemkau. Turns out that Lemkau and Chisholm were college soccer teammates at Dartmouth.
Will the NBA be happy?

Of course. It now has the most valuable franchise in all of pro sports, despite narratives about NFL superiority. That would remain true even if Pagliuca or Middleman somehow managed to win out.
It also decreases the likelihood of league expansion in places like Seattle or Las Vegas. Owners love expansion fees, but now their clubs could maybe get the same cash by selling a small stake in their clubs, in a revalued market, without the media income split becoming further diluted.


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[Roy H.]

The Celtics don't own their arena, which means the team doesn't get money from tickets or concessions

I don't think this part is true.  I don't think any team could exist under those conditions.

[MattyIce]

The Celtics don't own their arena, which means the team doesn't get money from tickets or concessions

I don't think this part is true.  I don't think any team could exist under those conditions.

they get the ticket $

[Roy H.]

The Celtics don't own their arena, which means the team doesn't get money from tickets or concessions

I don't think this part is true.  I don't think any team could exist under those conditions.

they get the ticket $

Yeah.  From what I've read, we don't pay out of pocket, we get all the tickets, and a split of concessions favorable to Jacobs.

The loss of concession revenue and not owning their own TV station hurts the team.

[BringToughnessBack]

Well, the new owner is definitely not cheap! Wow, what a price.

[SHAQATTACK]

Pocket change