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It’s a trend, private equity firms snatching up NBA teams

Jul 14, 2011, 4:32 PM EDT

Tom Gores

Despite what David Stern seems to think is a franchise-crushing financial system, and despite the threat of a protracted lockout, NBA franchises seem to be selling for record prices. And healthy profits in some cases for the former owners. The latest is the just agreed-to deal for Joshua Harris to buy the Philadelphia 76ers.

But there is a trend in the new buyers — many come from private equity firms.

It’s not a new trend, but over at CNN’s Fortune they broke it down.

This is the fourth time in recent years that private equity executives have purchased an NBA team. The first was in 2002, when the Boston Celtics were acquired for $380 million by a group led by Steve Pagliuca (Bain Capital) and Wyc Grousbeck (Highland Capital Partners).… Next up was the Golden State Warriors, acquired last year for $450 million by venture capitalist Joe Lacob (Kleiner Perkins).…

Most recently Tom Gores and his firm Platinum Equity purchased the Detroit Pistons, in a transaction marked by its unusual structure (the team technically is majority-owned by the firm, but since Gores controls the firm…).

Now we have the Philadelphia 76ers going to Harris, and I’ve heard word that another group of PE execs is beating the bushes for their own NBA franchise.

A lot of these guys, like Gores, specialize in buying and turning around distressed businesses. Does that make the NBA something that fits their business profile, or just a fun toy for really rich guys?

I’m not going to pretend to know what this means, if anything, for the league. Just pointing out a trend, but something to watch to see if there is an impact on the NBA.

  1. worldbfree4me - Jul 14, 2011 at 5:27 PM

    It’s worked out for the Celtics so far, so why not. Perhaps the NFL could learn from this, because penny pinching owners are killing the game. Just ask Jerry, and he’d explain “Jerrys World” is open for business Football be damned!

  2. tashkalucy - Jul 14, 2011 at 11:47 PM

    I don’t quite understand this.

    NBA franchises are being sold left-and-right to equity firms that “specialize in buying and turning around distressed businesses.”, and this is good?

    What’s it say? The franchises are DISTRESSED! What is it about the word “distressed” that makes this sound so good?

    Does anyone get it?

    Charlotte. Detroit. New Jersey. The Sixers the other day. All in the last two years. The league had to buy New Orleans because they couldn’t find a buyer….and still can’t. The Kings tried to move to get a plum deal in Orange County because the owners are having financial trouble both with their team and in their other holdings. Milwaukee’s owner wants to sell but he’s waiting behind the New Orleans thing. And that’s only what’s been made public. On and on it goes.

    Sure, the new TV contract is going to right all wrongs. And TV wants the the superior players in the large markets and the other markets to be development teams feeding them the players.

    A tipping point here. Either the NBA takes control of it’s league and becomes like the NFL, or it lets ESPN and Nike buy it off and make it like MLB – as Barkley says, “4 good teams and the rest of the league stinks.”

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