Celtics Sell for $6.1 Billion

[ozgod]

It's weird that there aren't a lot of estimates of Chisolm's net worth out there.  For an owner of a "crown jewel" franchise, that seems strange to me.

Of course, that stuff isn't always clear.  For a very long time, people assumed Wyc was the primary owner of the team, rather than his father.  Also, the internet would have us believe that Wyc's net worth hadn't changed in a decade, making him one of America's worst businessmen despite being in charge of a $6 billion asset.

Shank had this column in the Globe asking "why not Pags"?

I reached out to 90-year-old Irv Grousbeck Thursday. For a quarter of a century, the elder Grousbeck has been silent, Salinger-esque atop the Celtics masthead. Irv holds all the cards but never comments on his hand. On Thursday, he responded to my email inquiry stating, ?Bill [Chisholm] checks all of the boxes to represent the Celtics going forward. I defer to Wyc for any further comments.?

?Why not Pags?? I followed. ?Seems to check all the boxes and would make fans super comfortable.?

?Our goal was always to take the best bid from a suitable buyer, and that?s what we did,? responded Irv Grousbeck.

So, there you go. The Chisholm group made the best offer, according to Irv Grousbeck.

He also mentioned that despite the fact that most people thought he was the owner, he actually only owned 2% of the team, but it was decided early on he was going to be the front guy because that's what he wanted.

So, was it just about the highest number?

Perhaps not. I believe control and personalities were involved in this decision.

Since the team?s been for sale, Wyc Grousbeck has made it clear he wished to stay on as CEO and governor of the Celtics after selling. According to Thusday?s statement, he?s been granted this by Chisholm.

Sorry, but this just seems odd. Why would you pay $6.1 billion for the Celtics, then let the former owner run the team for three seasons? If you buy my Rolls-Royce, are you going to let me drive it for the next three years?

Finally, we have the awkward mix of personalities. Wyc Grousbeck and Pagliuca hardly knew one another before joining to purchase the team in 2002. Self-made Pagliuca came into the deal with his own money but was ever-marginalized by Grousbeck, who brought a much smaller amount to the table but had controlling interest due to his dad?s immense wealth. Pagliuca never commented about the disproportion of investment, and Wyc Grousbeck happily became identified as the team?s owner for more than two decades. It was only after the sale was announced last summer that it was learned Wyc Grousbeck owned less than 2 percent of the team.

?Wyc was clear from the beginning that the other owners would be in the back of the bus,? said a well-sourced insider. ?He would be the face of the team. Pags was boxed out and never given the mic.?

This was obvious when Wyc Grousbeck and Pagliuca interacted with the public and the media. Wyc loves the bright lights and it was hard for Pags to get his hand near the Larry O?Brien Trophy in those championship celebrations.

Reached via text late Thursday afternoon, Wyc responded to my ?why not Pags?? question:

?Steve has always been a good friend and partner. We have done great stuff together. The professional advisers my family brought in to run the very serious process recommended to the family that one bid stood apart from the rest when all the final bids were in. I have texted warmly back and forth with Steve today and he wrote he will support us doing the deal that was chosen. He?s been a fantastic friend and partner, actually. We will always be friends.?

https://www.bostonglobe.com/2025/03/21/sports/boston-celtics-sale-steve-pagliuca/[/quote[

Of course, Shaughnessy loved to stir the pot, and these sources could just be people with axes to grind passing on some juicy gossip, but

[ozgod]

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.

Unless he knows something about the Celtics' lease that we don't, I would find this very hard to believe. I don't think that the owners of the Celtics, or of any team that is renting an arena from someone else, would agree to go into a lease without some sort of revenue sharing deal for gate takings at the very least. Usually since they are the ones generating those ticket sales from the asset, they generally get to keep the lion's share of revenue from the gate. The owners of the asset (Delaware North) may have negotiated a cut of the gate takings, and the majority of concession sales, since those food service contracts would have been negotiated with them. Delaware would probably get to keep the parking revenue, and naming rights sponsorships, though the Celtics may be able to sell on-court sponsorships on their own. Delaware can obviously also rent out the stadium for other events and they would get to keep that money.

So there's definitely more revenue streams that can be unlocked by owning your own stadium, but it's not like they're not getting anything for their lease.

It's just like me renting my auto shop spaces - I pay rent, and I get to keep the proceeds of revenue generated from the use of the asset.

[Vermont Green]

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.

Unless he knows something about the Celtics' lease that we don't, I would find this very hard to believe. I don't think that the owners of the Celtics, or of any team that is renting an arena from someone else, would agree to go into a lease without some sort of revenue sharing deal for gate takings at the very least. Usually since they are the ones generating those ticket sales from the asset, they generally get to keep the lion's share of revenue from the gate. The owners of the asset (Delaware North) may have negotiated a cut of the gate takings, and the majority of concession sales, since those food service contracts would have been negotiated with them. Delaware would probably get to keep the parking revenue, and naming rights sponsorships, though the Celtics may be able to sell on-court sponsorships on their own. Delaware can obviously also rent out the stadium for other events and they would get to keep that money.

So there's definitely more revenue streams that can be unlocked by owning your own stadium, but it's not like they're not getting anything for their lease.

It's just like me renting my auto shop spaces - I pay rent, and I get to keep the proceeds of revenue generated from the use of the asset.

I can't find the details but this would be what I would expect.  They have to pay rent.  Like renting an apartment vs. owning a home.  It is better to own, more valuable to own.

[tazzmaniac]

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.

Unless he knows something about the Celtics' lease that we don't, I would find this very hard to believe. I don't think that the owners of the Celtics, or of any team that is renting an arena from someone else, would agree to go into a lease without some sort of revenue sharing deal for gate takings at the very least. Usually since they are the ones generating those ticket sales from the asset, they generally get to keep the lion's share of revenue from the gate. The owners of the asset (Delaware North) may have negotiated a cut of the gate takings, and the majority of concession sales, since those food service contracts would have been negotiated with them. Delaware would probably get to keep the parking revenue, and naming rights sponsorships, though the Celtics may be able to sell on-court sponsorships on their own. Delaware can obviously also rent out the stadium for other events and they would get to keep that money.

So there's definitely more revenue streams that can be unlocked by owning your own stadium, but it's not like they're not getting anything for their lease.

It's just like me renting my auto shop spaces - I pay rent, and I get to keep the proceeds of revenue generated from the use of the asset.

According to this article, the team's gross revenue was $493M last season broken down as: ticketing 149M, NBA distribution 124M, playoffs 102M, local TV 70M and everything else 49M.  The team's EBITDA earnings were ~30M while paying 40M+ luxury tax. 
https://www.sportico.com/leagues/basketball/2024/boston-celtics-sale-document-basketball-business-1234821085/

[Vermont Green]

All this talk about Chisholm, I think he probably is going to trade Holiday or Brown or someone.  Any new owner or the current owners would do the same.  It just isn't sustainable with the tax structure financial penalties and other penalties, to keep paying everyone.

I am just spit-balling, but I could see them trading Hauser this off season so that they can pay Horford, but keeping pretty much everyone else for 2025-26.  In 2026-27, Tatum's increase will have kicked in and they will have to deal with Porzingis.  This is the point in time where they may have to make some of the really tough decisions.  To me, that is the point where maybe Holiday or Brown get traded.  The cap/tax levels will go up offering some relief, which will help, but at some point, something is going to give.

But I am not going to worry about that now.  I am just going to enjoy the run for the repeat and hopefully the run for the 3-peat.

The hefty payroll commitments have raised questions about future operating losses for the team if it does not reach the NBA Finals regularly. Some estimates have its luxury tax bill topping $180 million for the 2026-27 season. BDT projects a much lower tax for that year and then the tax bill nearly disappearing for the 2027-28 season, which would mark Grousbeck?s last year as governor, based on his projected timeline for the full ownership transition.

The article that Tazz referenced had a note about the projected tax.  Apparently, Grousbeck issued some kind of projection to potential buyers.  The tax bill could not "disappear" by 2027-28 without some big changes.

[Phantom255x]

Echoing @Vermont Green's post, Bobby Marks on ESPN recently said that Hauser's extension kicks in after this season, and that his 10M salary would actually count for nearly 90M next season if kept on the books between his salary and the luxury tax accruals. 90M!

Sorry, I love Hauser but if that's the case I'd have no problem trading him this offseason to a team like Miami or Sacramento who would probably love a perimeter shooter like him for 10M. If Scheierman can do just half what Hauser does, we're perfectly fine. Tbh even last year in the postseason, outside of the closeout game vs. Miami and a few Finals game Hauser didn't really do much anyways and struggled shooting in the middle rounds too.

Moving Hauser could lower the 500M roster bill next year to around 410M, which is what Phoenix is paying their team this year I believe. I ultimately think they could still keep the rest of the team besides that and just elevate the roles of Scheierman and someone like Walsh.

Ultimately I do think Holiday will get traded, if not this offseason then definitely the next offseason (after the 2026 season). If we need to attach a pick to get it done to dump his salary, they'll be fine doing that. Porzingis seems to love the city and fans and I think he also loves his role here. I could see him being willing to re-sign on a reasonable, cheaper deal with Bird Rights beyond 2026 and being okay as the 3rd/4th option. He's already made a lot of money too, and I think realistically even he knows he's not getting a massive deal elsewhere because of his injury history and concerns. Plus, Horford will likely retire this offseason or next so his money and roster spot are off the books.

As long as we keep Tatum/Brown/White/Porzingis we'll remain a contender for many years to come even beyond 2026. Trade Hauser this summer, deal Holiday the next summer, and in that span Horford will probably retire anyways. The payroll bill next year would still be around 400M but that might be more feasible than 500M especially if they make the ECF/Finals. And the years after that become significantly lower especially when Horford and Holiday are gone.

[SparzWizard]

Ultimately I do think Holiday will get traded, if not this offseason then definitely the next offseason (after the 2026 season). If we need to attach a pick to get it done to dump his salary, they'll be fine doing that. Porzingis seems to love the city and fans and I think he also loves his role here. I could see him being willing to re-sign on a reasonable, cheaper deal with Bird Rights beyond 2026 and being okay as the 3rd/4th option. He's already made a lot of money too, and I think realistically even he knows he's not getting a massive deal elsewhere because of his injury history and concerns. Plus, Horford will likely retire this offseason or next so his money and roster spot are off the books.

And I think because of his injury history, we need another legit starting big and Porzingis can slide to PF or backup the front court

[Phantom255x]

Ultimately I do think Holiday will get traded, if not this offseason then definitely the next offseason (after the 2026 season). If we need to attach a pick to get it done to dump his salary, they'll be fine doing that. Porzingis seems to love the city and fans and I think he also loves his role here. I could see him being willing to re-sign on a reasonable, cheaper deal with Bird Rights beyond 2026 and being okay as the 3rd/4th option. He's already made a lot of money too, and I think realistically even he knows he's not getting a massive deal elsewhere because of his injury history and concerns. Plus, Horford will likely retire this offseason or next so his money and roster spot are off the books.

And I think because of his injury history, we need another legit starting big and Porzingis can slide to PF or backup the front court

Yep. They'll still need to hope they can draft someone capable, or maybe in a Jrue or Hauser trade you get back some young, cheap PF/C? (Aldama for example if Jrue is traded to Memphis, something similar like that)

But I don't mind a frontcourt rotation if you do that of Porzingis/Aldama*/Kornet/Queta

*I just use Aldama as an example here, just plug in any young PF/C you want

[keevsnick]

Echoing @Vermont Green's post, Bobby Marks on ESPN recently said that Hauser's extension kicks in after this season, and that his 10M salary would actually count for nearly 90M next season if kept on the books between his salary and the luxury tax accruals. 90M!

Sorry, I love Hauser but if that's the case I'd have no problem trading him this offseason to a team like Miami or Sacramento who would probably love a perimeter shooter like him for 10M. If Scheierman can do just half what Hauser does, we're perfectly fine. Tbh even last year in the postseason, outside of the closeout game vs. Miami and a few Finals game Hauser didn't really do much anyways and struggled shooting in the middle rounds too.

Moving Hauser could lower the 500M roster bill next year to around 410M, which is what Phoenix is paying their team this year I believe. I ultimately think they could still keep the rest of the team besides that and just elevate the roles of Scheierman and someone like Walsh.

Ultimately I do think Holiday will get traded, if not this offseason then definitely the next offseason (after the 2026 season). If we need to attach a pick to get it done to dump his salary, they'll be fine doing that. Porzingis seems to love the city and fans and I think he also loves his role here. I could see him being willing to re-sign on a reasonable, cheaper deal with Bird Rights beyond 2026 and being okay as the 3rd/4th option. He's already made a lot of money too, and I think realistically even he knows he's not getting a massive deal elsewhere because of his injury history and concerns. Plus, Horford will likely retire this offseason or next so his money and roster spot are off the books.

As long as we keep Tatum/Brown/White/Porzingis we'll remain a contender for many years to come even beyond 2026. Trade Hauser this summer, deal Holiday the next summer, and in that span Horford will probably retire anyways. The payroll bill next year would still be around 400M but that might be more feasible than 500M especially if they make the ECF/Finals. And the years after that become significantly lower especially when Horford and Holiday are gone.

The problem with trading Sam Hauser is that even if you trade him, you're still going to be fantastically expensive and you'll still be over the second apron. He makes 10 million, but you have to replace his roster spot with someone making 2.5 so your actual salary/tax savings are going to be way less than 90 million because the difference between his salary and his replacement's salary isn't that large. Plus it's very hard to find shooting wings that can hold up on defense even late into the playoffs. The fact that his contract is such a great value actually makes him less likely to be the one traded, becasue when you are as expensive as the Celtics you need great value contracts taking up roster spots.

If we're talking about savings the guys most likely to get dealt are Holiday or Porzingis. Dumping one of those two and taking back nothing would save literally 200 million in salary+tax and allow you to get below the second apron to avoid draft pick penalties.

Holiday is easily most likely due to his age and roster redundancy, but his contract probably means you need to attach assets to dump him.
 
Porzingius is a possibility becasue of his injury issues and the fact that his shorter contract (expiring after next year) may be easier to move, but the fact that Al is old as dirt and the Kornet is a free agent means moving KP this off season could leave you with very little at center.

The move probably needs to happen this off season. Moving off a 30 million dollar player and taking back nothing isn't easy, not many teams have the cap room to facilitate that kind of move. So what the C's may do is a sort of "step-down" trade where they trade Jrue for someone making less on a shorter deal, but that sort of deal needs to be made sooner rather than later to get the ball rolling and avoid draft pick penalties down the line.

[Roy H.]

During that time, Grousbeck is expected to collaborate with Chisholm and his group as the team navigates through a massive offseason with a skyrocketing payroll and luxury tax penalties. How will the team handle a payroll that is currently projected to land north of $233 million with nearly $300 million in luxury tax penalities? Grousbeck shed some light on the upcoming situation during an interview on Friday morning with the Greg Hill Show on WEEI. ?Let me put a pin in that balloon too,? Grousbeck said when asked about the challenges of staying in the luxury tax. ?It?s not the luxury tax bill, it?s the basketball penalties. The new CBA was designed by the league to stop teams from going crazy. They decided that it?s not good enough to go after the wallets because the fans can be like, ?Hey find someone who can afford to spend $500 million dollars a year or whatever it is, like the English Premiere League. I know seven guys who own premiere league teams in England with no spending caps and most of them don?t know what the hell is going on.? 1 day ago ? via Booth Newspapers

"The basketball penalties mean that it?s even more of a premium now to have your basketball general manager be brilliant and lucky,? Grousbeck said. ?Because you have to navigate because you can?t stay in the second-apron, nobody will, I predict, for the next 40 years of the CBA, no one is going to stay in the second apron more than two years.? 1 day ago ? via Booth Newspapers/

[keevsnick]

During that time, Grousbeck is expected to collaborate with Chisholm and his group as the team navigates through a massive offseason with a skyrocketing payroll and luxury tax penalties. How will the team handle a payroll that is currently projected to land north of $233 million with nearly $300 million in luxury tax penalities? Grousbeck shed some light on the upcoming situation during an interview on Friday morning with the Greg Hill Show on WEEI. ?Let me put a pin in that balloon too,? Grousbeck said when asked about the challenges of staying in the luxury tax. ?It?s not the luxury tax bill, it?s the basketball penalties. The new CBA was designed by the league to stop teams from going crazy. They decided that it?s not good enough to go after the wallets because the fans can be like, ?Hey find someone who can afford to spend $500 million dollars a year or whatever it is, like the English Premiere League. I know seven guys who own premiere league teams in England with no spending caps and most of them don?t know what the hell is going on.? 1 day ago ? via Booth Newspapers

"The basketball penalties mean that it?s even more of a premium now to have your basketball general manager be brilliant and lucky,? Grousbeck said. ?Because you have to navigate because you can?t stay in the second-apron, nobody will, I predict, for the next 40 years of the CBA, no one is going to stay in the second apron more than two years.? 1 day ago ? via Booth Newspapers/

This interview i think made it seem pretty clear that the C's aren't going to me in the second apron more than two years. What he's probably talking about here are the draft pick penalties. If you are in the 2nd apron your draft pick gets frozen 7 years out.If you are in the second apron for two years in a row your draft pick then gets sent to the END OF THE FIRST ROUND 7 years later. The only way to un-banish the draft pick is to be out of the 2nd apron for the next three seasons.

The team building constraints can all be worked around if you already have your core 8-9 locked up. But being banished to pick 30 in 7 years will scare a lot of owners. That said, team building stuff or not, the C's aren't going to pay 300million in tax. That's their main concern, with the draft pick penalties being a convenient excuse to shed money.

[jpotter33]

During that time, Grousbeck is expected to collaborate with Chisholm and his group as the team navigates through a massive offseason with a skyrocketing payroll and luxury tax penalties. How will the team handle a payroll that is currently projected to land north of $233 million with nearly $300 million in luxury tax penalities? Grousbeck shed some light on the upcoming situation during an interview on Friday morning with the Greg Hill Show on WEEI. ?Let me put a pin in that balloon too,? Grousbeck said when asked about the challenges of staying in the luxury tax. ?It?s not the luxury tax bill, it?s the basketball penalties. The new CBA was designed by the league to stop teams from going crazy. They decided that it?s not good enough to go after the wallets because the fans can be like, ?Hey find someone who can afford to spend $500 million dollars a year or whatever it is, like the English Premiere League. I know seven guys who own premiere league teams in England with no spending caps and most of them don?t know what the hell is going on.? 1 day ago ? via Booth Newspapers

"The basketball penalties mean that it?s even more of a premium now to have your basketball general manager be brilliant and lucky,? Grousbeck said. ?Because you have to navigate because you can?t stay in the second-apron, nobody will, I predict, for the next 40 years of the CBA, no one is going to stay in the second apron more than two years.? 1 day ago ? via Booth Newspapers/

This interview i think made it seem pretty clear that the C's aren't going to me in the second apron more than two years. What he's probably talking about here are the draft pick penalties. If you are in the 2nd apron your draft pick gets frozen 7 years out.If you are in the second apron for two years in a row your draft pick then gets sent to the END OF THE FIRST ROUND 7 years later. The only way to un-banish the draft pick is to be out of the 2nd apron for the next three seasons.

The team building constraints can all be worked around if you already have your core 8-9 locked up. But being banished to pick 30 in 7 years will scare a lot of owners. That said, team building stuff or not, the C's aren't going to pay 300million in tax. That's their main concern, with the draft pick penalties being a convenient excuse to shed money.

Of note, they were talking about this on the Hoop Collective podcast today, and they theorized that the "year two" Wyc was referencing is more than likely next year. While this is technically our second year in the second apron, the penalties were only gradually phased in, so next year would only be year two based upon the draft pick and other penalties that were just phased in this year.

They also noted that how the Celtics fare in the playoffs will also likely be determinative of next steps. Hard to imagine them breaking up this core five with a chance at a threepeat, but they still could do some things on the periphery like trade Hauser for some savings, especially with the emergence of Baylor.

[Donoghus]

Interesting development here.

The NBA's private equity ownership rules may be tested by the record-breaking Boston Celtics sale, in a way that could have repercussions for future transactions.

The big picture: Bill Chisholm, the club's presumptive new control owner, has committed less money to the two-part deal than has Sixth Street Partners, according to three sources.

That is not allowed by the NBA, per regulations first established in 2021.
Instead, a PE fund can have the lesser of 20% or below the percentage held by the control owner (who must hold a 15% minimum stake).
Behind the scenes: There seem to be two options for Chisholm, whose deal was announced before it was fully financed.

One is that he pulls in so many new investors that Sixth Street's full check is no longer needed ? and the firm allows itself to fall below Chisholm in the cap table. This remains possible before other owners vote in June, particularly if some existing minority investors roll over their stakes and/or some of the losing bidders join with Chisholm.
The other is that Chisholm requests some sort of waiver from the league, guessing that other owners won't reject a deal with so high a price tag.
Spokespeople for Chisholm's group, Sixth Street, and the NBA all declined comment.
The bottom line: Private equity firms not involved with the Celtics will pay very close attention to how this plays out.

If Chisholm and Sixth Street do get a waiver, they'd be emboldened to try something similar ? and maybe even believe there's legal precedent to do so

[Phantom255x]

Interesting development here.

The NBA's private equity ownership rules may be tested by the record-breaking Boston Celtics sale, in a way that could have repercussions for future transactions.

The big picture: Bill Chisholm, the club's presumptive new control owner, has committed less money to the two-part deal than has Sixth Street Partners, according to three sources.

That is not allowed by the NBA, per regulations first established in 2021.
Instead, a PE fund can have the lesser of 20% or below the percentage held by the control owner (who must hold a 15% minimum stake).
Behind the scenes: There seem to be two options for Chisholm, whose deal was announced before it was fully financed.

One is that he pulls in so many new investors that Sixth Street's full check is no longer needed ? and the firm allows itself to fall below Chisholm in the cap table. This remains possible before other owners vote in June, particularly if some existing minority investors roll over their stakes and/or some of the losing bidders join with Chisholm.
The other is that Chisholm requests some sort of waiver from the league, guessing that other owners won't reject a deal with so high a price tag.
Spokespeople for Chisholm's group, Sixth Street, and the NBA all declined comment.
The bottom line: Private equity firms not involved with the Celtics will pay very close attention to how this plays out.

If Chisholm and Sixth Street do get a waiver, they'd be emboldened to try something similar ? and maybe even believe there's legal precedent to do so

Pags did say in his statement, if the deal fell through that his group would be waiting. Maybe he knew this wasn't a sure thing yet.

[tazzmaniac]

Interesting development here.

The NBA's private equity ownership rules may be tested by the record-breaking Boston Celtics sale, in a way that could have repercussions for future transactions.

The big picture: Bill Chisholm, the club's presumptive new control owner, has committed less money to the two-part deal than has Sixth Street Partners, according to three sources.

That is not allowed by the NBA, per regulations first established in 2021.
Instead, a PE fund can have the lesser of 20% or below the percentage held by the control owner (who must hold a 15% minimum stake).
Behind the scenes: There seem to be two options for Chisholm, whose deal was announced before it was fully financed.

One is that he pulls in so many new investors that Sixth Street's full check is no longer needed ? and the firm allows itself to fall below Chisholm in the cap table. This remains possible before other owners vote in June, particularly if some existing minority investors roll over their stakes and/or some of the losing bidders join with Chisholm.
The other is that Chisholm requests some sort of waiver from the league, guessing that other owners won't reject a deal with so high a price tag.
Spokespeople for Chisholm's group, Sixth Street, and the NBA all declined comment.
The bottom line: Private equity firms not involved with the Celtics will pay very close attention to how this plays out.

If Chisholm and Sixth Street do get a waiver, they'd be emboldened to try something similar ? and maybe even believe there's legal precedent to do so

Pags did say in his statement, if the deal fell through that his group would be waiting. Maybe he knew this wasn't a sure thing yet.

The stories I read indicated Sixth Street was contributing $1bn or so.  If Chisolm is contributing less than that, where is the other $4bn coming from? 

Not sure what the primary owner not having that much money committed, relatively speaking, means.  Maybe it means he's less personally invested in the Celts which goes along with allowing Wyc to be in charge for 3 years.  Does it mean he'd be more willing to pay the luxury tax and penalties over the next couple years?  Is there someone else contributing the bulk of the money who would actually be pulling the strings? 

If it is just for the Celts, I doubt a waiver would be given.  However, if this significantly drives up the cost of the new franchises and the value of existing franchises, I could see the waiver given.  Would the waiver require a majority or a super majority of the owners?