The record $6.1 billion Boston Celtics sale will be finalized within the next week or so and the deal structure will be compliant with NBA private-equity ownership rules, Front Office Sports has learned.
Lead buyer Bill Chisholm’s group now has enough money to cover the cost of the deal and is in fact “oversubscribed,” two sources tell FOS. The group will acquire more than 51% of the franchise in the first tranche of the deal, one source says. The exact size stake Chisholm will end up owning is still unclear.
Rumors about potential issues with the transaction sprouted almost as soon as it was announced in late March, including reports that private-equity firm Sixth Street Partners was contributing more money than Chisholm. The NBA’s private-equity ownership rules stipulate that a PE firm cannot be the largest stakeholder in a team and that the controlling owner must contribute at least 15% of the purchase price.
It wasn’t just media speculation. Steve Pagliuca, a minority owner since 2002 who lost to Chisholm’s group in the battle to buy the Celtics, wrote a fiery public letter to fans last month that said his proposal was “fully guaranteed and financed” and had “no debt or private equity money that would potentially hamstring our ability to compete in the future.” Pagliuca even said: “If the announced transaction does not end up being finalized, my partners and I are ready to check back into the game…”
In a highly unusual move, even though Chisholm will become the controlling owner upon approval of the agreement, Grousbeck will remain in his roles of CEO and governor through the 2027-28 season.
The full sale will still take place in two parts, one source says, and existing minority owners will have the ability to retain their positions until 2028.
Those minority owners will get to sell their stakes for up to 20% more than the original deal price, in accordance with a revenue-based formula set by the league, and when all is said and done that will bring the final blended value of the deal close to $7.3 billion.
NBA owners are expected to vote on the deal at some point in June. The NBA declined to comment.
On the court, the Celtics eliminated the Orlando Magic earlier this week and await the winner of the New York Knicks-Detroit Pistons series. Boston has the second-best odds in Vegas to repeat as NBA champions.
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