Apr 13, 2011, 4:59 PM EDT
Piston fans, there is just never going to be another owner like Bill Davidson.
The storybook ending of a drawn-out, sloppy sale of the team after his death is that Michigan-raised billionaire Tom Gores bought the Pistons and that things will now start back on the path to the glory days.
That’s right: The Detroit Pistons are about to become the first NBA franchise to be owned by a private equity fund. Not by flesh-and-blood individuals who made their fortunes in private equity (like the Boston Celtics or Golden State Warriors), but by a $2.75 billion financial vehicle. What that means is that this the Pistons are about to become an investment, not a labor of love. Something bought for the purpose of later being sold, not to keep in the Michigan-loving family for generations.
The NBA is obviously aware of this reality – my understanding is that Platinum has fully explained to league officials how PE funds operate – and apparently is okay with it.
Yes, it’s true that Gores will invest personal money into the deal. But it’s also true that Gores invests personal money alongside all Platinum Equity deals, by virtue of its partnership agreement. Don’t recall any “hometown hero” stories when Platinum acquired fastening systems manufacturer Acument Global Technologies, which happens to be headquartered in Sterling Heights, Michigan.
Gores may well still hold a candle for Bob Lanier, but his primary motivation (and fiduciary duty) today is to turn a profit. If that can be done by maximizing other assets acquired in the transaction — including the Auburn Hills arena, an outdoor concert venue and a music festival — while using the ball-club as a loss leader, then that may be what happens. Or perhaps Platinum is counting on a favorable reworking of the players’ collective bargaining agreement, to move the NBA closer to the NFL’s parity-producing model.
The good news for Pistons fans is this: Winning helps turn profits. If the goal is to make money, then Gores and firm have an incentive to find a winning formula. Still, the idea of an equity fund owning the team is a little disturbing, that the team is not seen by its owners as anything more than an asset.
Sadly, the days of a friendly, community-minded hometown owner are fading fast. If not gone completely.
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