Sixers sold in middle of lockout

[BballTim]

The NBA Board of Governors sent out a release Tuesday morning saying it had "unanimously approved the sale of the Philadelphia 76ers to an investment group led by Joshua Harris and David Blitzer."

That cleared the way for  new owner Harris to take charge of the team, as well as Blitzer and former NBA player agent/attorney Jason Levien, and for Tuesday's news conference.

The new owners named former Philadelphian Adam Aron CEO. Among those investing in the team are actor/singer Will Smith and wife Jada Pinkett Smith.

"My partners and I are thrilled to have become owners of the Sixers,' said Harris in a release. "It's an honor to be part of this storied franchise. We want to build on the team's momentum and be world class and cutting edge in everything we do."

Harris, a leveraged buyout specialist, ranked 655th on Forbes magazine's list of the world's billionaires (at $1.5 billion) in March 2010. He earned his undergraduate degree at Penn, as well as an MBA from Havard.

The deal is reportedly for $300 million, but doesn't include the Wells Fargo Center where the team plays. Former team owners Comcast-Spectacor still own the arena and the NHL's Philadelphia Flyers.

http://www.phillyburbs.com/sports/sixers/sixers-sale-complete/article_11ffd062-bd18-5b31-8413-3fe7ca89fc85.html

Not a bad turn given that Harold Katz sold Ed Snider the 76ers for only $130 million just 15 year ago.

(As a frame of reference, the Sixers' current ownership spent $130 million to acquire the team from Harold Katz in April 1996; Katz bought the team from the late F. Eugene Dixon for about $12 million in July 1981.)

http://www.lofts640.com/press_dnews_inasale.html

$300 million for a team that may not have a season and would obviously lose money from this and for a team that constantly ranks in the bottom 5-7 teams in regards to attendance.

http://espn.go.com/nba/attendance/_/year/2011

And now they are going to make themselves even more profitable by slashing ticket prices by as much as 50% for some 9000 seats:

http://www.bizjournals.com/philadelphia/news/2011/10/18/new-76ers-owners-promise-to-slash.html

I thought the NBA business model was broken and teams couldn't make a profit. Bought for $130 million sold for $300 million while having one of the most marketable NBA stars during that era and a trip to the Finals?

Stories like this make me think the NBA owners are full of it with their claims of more than $300 million in losses each year.

  I saw the part in the article about slashing prices, but does it say that will make them more profitable? Are they profitable now?

Are they profitable now?  Looks to me like a $170m profit.

But that probably isn't good enough for these greedy owners.

And just one question.  That $170m profit, do any of the players who played for Philly during the now previous ownership get to share in the profit from the sale of the team?

If not (which they obviously don't), the players should not be asked to shoulder any of the risk involved in the purchase of the team.

  That's asset appreciation though. If I own a restaurant that loses %2k a month but I sell it for $50k more than I paid for it, is the restaurant profitable?

Are you saying that is what happened or is this a rhetorical question?

Because unless you can show that the Sixers lost money every year in that 15 year span, you do not have a very good argument.

  What I'm saying is that the fact that the franchise was sold for more money than it was bought for 15 years earlier doesn't mean that the team doesn't lose money as a business. I didn't say the team lost money in each of the last 15 years, in fact I was asking about *your* assertion that the team was profitable.

[dtrader]

If you own a business for 15 years, and sell it for a $50k profit, then whether or not it was profitable (as an investment), will depend on the cumulative gains or loses over the 15 years of ownership.  As long as the losses amount to less than the $50k profit on selling, it WAS a profitable "investment"...whether or not it was a profitable "business" depends on what you expected to get out of it.  If a profitable business to you, is one that makes money every year...then it probably wasn't.  If a profitable business to you is one where the good years more than make up for the thin years, then it probably was.  Using this framework...I think the NBA owners are pretty much all holding teams that would be good "investments" if they were to sell them.

[BballTim]

If you own a business for 15 years, and sell it for a $50k profit, then whether or not it was profitable (as an investment), will depend on the cumulative gains or loses over the 15 years of ownership.  As long as the losses amount to less than the $50k profit on selling, it WAS a profitable "investment"...whether or not it was a profitable "business" depends on what you expected to get out of it.  If a profitable business to you, is one that makes money every year...then it probably wasn't.  If a profitable business to you is one where the good years more than make up for the thin years, then it probably was.  Using this framework...I think the NBA owners are pretty much all holding teams that would be good "investments" if they were to sell them.

  True, but that only comes into play if and when you sell the team. How much money you make on a year to year basis can affect how you run your team and how competitive you are.

[nickagneta]

The NBA Board of Governors sent out a release Tuesday morning saying it had "unanimously approved the sale of the Philadelphia 76ers to an investment group led by Joshua Harris and David Blitzer."

That cleared the way for  new owner Harris to take charge of the team, as well as Blitzer and former NBA player agent/attorney Jason Levien, and for Tuesday's news conference.

The new owners named former Philadelphian Adam Aron CEO. Among those investing in the team are actor/singer Will Smith and wife Jada Pinkett Smith.

"My partners and I are thrilled to have become owners of the Sixers,' said Harris in a release. "It's an honor to be part of this storied franchise. We want to build on the team's momentum and be world class and cutting edge in everything we do."

Harris, a leveraged buyout specialist, ranked 655th on Forbes magazine's list of the world's billionaires (at $1.5 billion) in March 2010. He earned his undergraduate degree at Penn, as well as an MBA from Havard.

The deal is reportedly for $300 million, but doesn't include the Wells Fargo Center where the team plays. Former team owners Comcast-Spectacor still own the arena and the NHL's Philadelphia Flyers.

http://www.phillyburbs.com/sports/sixers/sixers-sale-complete/article_11ffd062-bd18-5b31-8413-3fe7ca89fc85.html

Not a bad turn given that Harold Katz sold Ed Snider the 76ers for only $130 million just 15 year ago.

(As a frame of reference, the Sixers' current ownership spent $130 million to acquire the team from Harold Katz in April 1996; Katz bought the team from the late F. Eugene Dixon for about $12 million in July 1981.)

http://www.lofts640.com/press_dnews_inasale.html

$300 million for a team that may not have a season and would obviously lose money from this and for a team that constantly ranks in the bottom 5-7 teams in regards to attendance.

http://espn.go.com/nba/attendance/_/year/2011

And now they are going to make themselves even more profitable by slashing ticket prices by as much as 50% for some 9000 seats:

http://www.bizjournals.com/philadelphia/news/2011/10/18/new-76ers-owners-promise-to-slash.html

I thought the NBA business model was broken and teams couldn't make a profit. Bought for $130 million sold for $300 million while having one of the most marketable NBA stars during that era and a trip to the Finals?

Stories like this make me think the NBA owners are full of it with their claims of more than $300 million in losses each year.

  I saw the part in the article about slashing prices, but does it say that will make them more profitable? Are they profitable now?

Are they profitable now?  Looks to me like a $170m profit.

But that probably isn't good enough for these greedy owners.

And just one question.  That $170m profit, do any of the players who played for Philly during the now previous ownership get to share in the profit from the sale of the team?

If not (which they obviously don't), the players should not be asked to shoulder any of the risk involved in the purchase of the team.

  That's asset appreciation though. If I own a restaurant that loses %2k a month but I sell it for $50k more than I paid for it, is the restaurant profitable?

Are you saying that is what happened or is this a rhetorical question?

Because unless you can show that the Sixers lost money every year in that 15 year span, you do not have a very good argument.

  What I'm saying is that the fact that the franchise was sold for more money than it was bought for 15 years earlier doesn't mean that the team doesn't lose money as a business. I didn't say the team lost money in each of the last 15 years, in fact I was asking about *your* assertion that the team was profitable.

I never asserted that Philly was profitable. I sarcastically said they were slashing prices to make the team more profitable. That's not asserting they are profitable.

For all I know, over the last 15 years, they could have broken even. Its possible. After all in the late 90's and early 2000's they had the most marketable player in the league and through the roof attendance figures. Over the last 5-6 years though those attendance figures have been much worse. So its conceivable they made money and lots of it for many of those 15 years and recently haven't been and have run about even over the course of those 15 years.

So that would make the $170 million made on the sale all pure profit.

[xmuscularghandix]

Doesn't seem smart to buy a team during a lockout, especially if the guy you bought it off still owns the arena you play in AND the hockey team that shares the building... Not to mention that the hockey team ranks above you in your new market.

[LB3533]

If you're an owner of an NBA franchise and you've earned income whether or not it was directly or indirectly related to your franchise....then those earnings should be counted to the BRI.

[lon3lytoaster]

Doesn't seem smart to buy a team during a lockout, especially if the guy you bought it off still owns the arena you play in AND the hockey team that shares the building... Not to mention that the hockey team ranks above you in your new market.

... And you're buying the Sixers. I can't imagine they've been overwhelmingly profitable over the past few seasons.

[Chris]

Doesn't seem smart to buy a team during a lockout, especially if the guy you bought it off still owns the arena you play in AND the hockey team that shares the building... Not to mention that the hockey team ranks above you in your new market.

My guess is that they worked something out regarding the lockout.  Most likely something where he doesn't start paying rent on the building, until games resume.  The new owners also most likely got a much better deal right now than they would have when the new, owner friendly CBA is in place.