Posted on: October 5, 2010 11:34 am
Edited on: October 5, 2010 11:42 am
Posted by Royce Young
According to the Crain's Detroit, the current Pistons ownership group headed by Karen Davidson have decided to sell to Mike Ilitch.
The price isn't known yet, but as mentioned a few months back, it's expected to be around $100 million less than the $450 estimated value by Forbes.
The Ilitch family was a favorite to win the bid as they're already entrenched in the Detroit sports scene. They also own the Detroit Tigers and Red Wings as well. Supposedly the Ilitch group is extremely interested in building a new downtown arena and with their ownership of both the Red Wings and Pistons, they already have the tenants lined out for sure.
Ilitch is the perfect purchaser and the fact he will hopefully be able to bring basketball back to downtown Detroit is exciting. The Palace of Auburn Hills is on the outskirts of the city and was opened in 1988. Not that it's a bad arena, but the Pistons and Red Wings should be in downtown playing in a new arena. It makes sense.
It's somewhat interesting that Davidson decided to sell to Ilitch, who between the two ownership groups there has been some hostility and dislike over the years because of the Red Wings and Pistons. But Ilitch was touting that he came forward in order to keep the team in the city and that's something Davidson wanted to make sure happened.
Other candidates to purchase the team included venture capitalist Tom Gores, a Flint native and Michigan State University graduate; a group headed by George Postolos, a former Houston Rockets executive who also was special assistant to NBA Commissioner David Stern; and a group with ties to Dubai.
How is Mike Ilitch rich? He's an entrepreneur and founded Little Caesars Pizza in 1959. He also owns a ton of real estate in downtown Detroit and has been vital to the redevelopment of downtown Detroit, most notably renovated the famous Fox Theater.
Ilitch purchased the Red Wings in 1982 and the Tigers in 1992. With the purchase of the Pistons, Ilitch would be the first person to own three of the four major teams in a city (NFL bylaws prevent would prevent him from buying the Lions without selling the other teams). Some feared that the Pistons might be a prime candidate to move to another city because of the arena issues, but with local owner Ilitch now taking the reins, those concerns should be dissolved.
Posted on: September 28, 2010 12:01 am
Edited on: September 28, 2010 12:05 am
Ticket sales reflect a brighter outlook for a league on the rise.
Posted by Matt Moore
When in doubt, follow the money.
After posting losses claimed by the owners of up to $400 million in the past few years, the NBA is set for record growth in at least one area, even in the midst of a continuingly disappointing economy. The South Florida Business Journal reports that the NBA will begin the season with over $100 million in new revenue, including a 40% increase in season-ticket sales. The big winners are about who you'd expect, teams in big markets with vastly improved teams thanks to the most insane free agency period in the history of sports.
Chicago. New York. That one team in South Florida. the Orlando Magic featuring a new arena. And then? The Oklahoma City Thunder.
But it's not just the biggies. The Grizzlies, the Kings, and the Bobcats have all sold over 1,000 new season tickets. All in all, 21 teams sold over 1,000 new season tickets versus 11 last year. That's pretty tremendous growth.
Ken Berger told you this evening how the Miami Heat have helped take league interest to new levels. The NBA is usually absent, and fans are usually reluctant to take notice until football season is over. Not this year. This year people are talking about LeBron's attention obsession (even as they pay attention to him), Melo's Melodrama, the Thunder's rise, the Lakers' sustained dominance, the Celtics reloaded, the Magic refocused, the Bulls retooled, and hey, the Knicks might not suck!
It's an excitement that's being reflected in ticket sales, the bread and butter of sports, the barometer for popularity. And while many of those season ticket holders will be trying to give those seats away as their teams flow to the wayside, some will love their experience. They'll take their kids, growing a new generation of fans. The game will grow, which is good for the entire league. Those big market teams being good again? It's undeniably good for the league, helps to put them in the spotlight. But those small market teams? They may be better for the health of the league. It's those teams that are going to grow the game itself, making their fans care about tuning into those Thursday night battles, those Friday night fights (the theoretical kind, Ron-Ron's a different man now), those Christmas day rumbles. They'll want to size up the elite just as middle-of-the-road NFL team fans want to see Peyton vs. Brady to see how their team measures up to the elite.
That's the kind of attention the league needs from America. Not just from LA and Boston, but from America, a legion of fans who care about the game. It'll never be more than a fraction of the NFL for various reasons, but that doesn't mean it can't be a strong product that belongs in the water cooler conversation, in the bar-side debates, that has parents excited to share the game with their kids.
Consider now how many superpowers we have. In a league that in past years was too often criticized for being watered down, we have the Lakers who feature Lamar Odom, a fantastic player, as their sixth man. Sixth! The Triad are redefining superstar-laden. The Celtics don't just have the Big 3, they added more firepower to a team that won the East last year. The Magic cannot be expected to take a step back, in the least. The Bulls are now well-rounded and set to contend. The Thunder will only improve. The league is stacked from top to bottom with teams to feature on those national contests, and Blake Griffin might even be good!
Is part of this preseason excitement, based on the painful withdrawal of four months without real NBA ball (FIBA's fine, but it ain't the same)? Absolutely. It's the same bright-eyed optimism that has players tweeting about working hard in training camp and being excited to start their season. It doesn't mean it's not on point, though. NBA fans have every reason to be hopeful right now. To be excited, intrigued, and ready to start their season.
Except in Cleveland. Where mighty Casey has left for a nicer contract in another city with his friends. Bummer.
But for the rest of the NBA? It's party time. Hope springs eternal. Except it's fall. I'm confused. Anyway, go NBA.
Posted on: August 26, 2010 12:44 pm
Edited on: August 26, 2010 12:45 pm
Posted by Royce Young
How do you become a 30-year-old professional franchise owner? One way: Have your dad give you his team. Or both of them for that matter.
Current Denver Nuggets owner Stan Kroenke recently won a bid to buy the St. Louis Rams for a reported $750 million. And because of NFL rules, a team owner isn't allowed to retain control of teams in other sports located in other cities. That's a problem for Stan who owns both the Nuggets and the NHL franchise, the Colorado Avalanche.
So Kroenke has passed both the Avalanche and the Nuggets to his son Josh, a former Missouri Tiger basketball player who happens to be only 30 years old. Kroenke must pass operational and financial control of those teams to Josh by the end of the year. He must give up his majority stake in the teams by December 2014. So while Josh doesn't technically "own" the teams, he's in charge of them. Kind of like when your dad buys you a car for your 16th birthday. It's your car, but it's really his. Or something like that.
Josh will serve as governor of the NHL team and set the budget, but team president Pierre Lacroix will retain control over personnel decisions. But given the fact Josh clearly has basketball interest and knowledge, he'll likely have a larger role with the Nuggets. We've already seen him getting involved as he met personally with Carmelo Anthony and was a very big part of hiring new general manager Masai Ujiri.
The Nuggets are in an interesting situation all around with the front office shuffle, the Carmelo situation and now the ownership changing hands. It's hard not to wonder how this transition will take shape and how Josh will insert himself into the Nuggets business. He's appeared proactive early, so with new hire Ujiri, it'll be curious to see how much power is yielded to the new general manager.
The elder Kroenke also owns the Colorado Rapids of Major League Soccer and the Colorado Mammoth of the National Lacrosse League. In addition, he is the largest shareholder in Arsenal of the English Premier League. Josh doesn't get to cash in on those two however, as they stay with Stan.
Posted on: August 20, 2010 10:56 am
Posted by Royce Young
Currently, the Pistons are valued at around $479 million, though because of financing issues in Detroit and the sagging economy in the city, some feel the price will dip down into the $300 million range. What a bargain.
Gores is rich mainly from Platinum Equity a struggling business he bought and restructed. He went to Michigan State and is a native of Flint. According to Forbes, he's worth about $2.2 billion, which would make him the 147th-richest American.
Gores, 46, and his group made two visits to The Palace over the past two weeks, the only interested group to do so. Other potential buyers are a foreign group based out of Dubai; George Postolos, former president of the Houston Rockets who lost out to Michael Jordan in the bidding for the Bobcats; and Mike Illitch, owner of the Red Wings and Tigers.
Posted on: August 16, 2010 3:26 pm
Edited on: August 16, 2010 6:07 pm
Posted by Royce Young
For the first time since the NBA returned to Charlotte last season, the Bobcats had some on-court success. Behind a frantic, swarming defense, the team made a surprising playoff run and finished 44-38.
All of this was during a season in which ownership changed hands as well, with former owner Bob Johnson handing the reins to Michael Jordan. Under Johnson, the team lost tens of millions of dollars each season and fell into the kind of mediocrity that can absolutely suck the life out of a fanbase. But under Jordan, not only did the team start to actually win, it began to show some improvement financially as well.
The Charlotte Business Journal reports during the past 12 months, the Bobcats have increased the number of team sponsors to 90 (up from 50) while posting serious gains in new season-ticket sales and renewals that rank among the top 10 off-season performances in the 30-team NBA. That's like, whoa for a franchise that only a year ago was probably in the top five worst situations in the league.
But a major misconception about the NBA (and really sports in general) is that all money comes from ticket sales. While that's obviously very, very important, corporate sponsorship is where the real dough comes from. And not only are the Bobcats bringing in new ones, but they are doing well with existing sponsors also. To date, the franchise has renewed 85 percent of expiring sponsorships this summer. In past years, the team struggled to have even a 60 percent renewal rate with corporate partners.
Not to say the improvement in sales isn't a great sign as well. The report also mentions the franchise's goals of reaching 100 corporate sponsors and selling 10,000 season tickets (using full-season and partial-season combinations). And for the first time in franchise history, those two things actually appear doable. By opening night for the Bobcats, the franchise expects to have around 8,000 season-ticket plans sold. Last year around this time, the team had sold fewer than 400 new season tickets versus 1,500 during the current off-season. That's right there, is what you'd call improvement.
Obviously having Michael Freaking Jordan as your chief salesman to corporate sponsors helps. Gaming company 2K Sports became a sponsor for next season after it signed MJ as its coverboy for this year's NBA 2K11. The business journal also reports Hanes , who Jordan is a major endorser for, is close to becoming a Bobcats partner.
This huge for the NBA in Charlotte. When the Hornets resided there, Charlotte was known as one of the absolute top home court advantages in the league for a time. The teams with Alonzo Mourning, Mugsy Bogues and Larry Grandmama Johnson were fun, fast and exciting. Its fanbase was fanatical and opposing teams feared playing there. But owner George Shinn moved the team to New Orleans because of disputes over a new arena and because the once lively fanbase lost faith in ownership and quit coming. The NBA knew Charlotte was a terrific NBA city and North Carolina a great basketball state, so a franchise returned there but struggled to get off its feet. Struggled for seven years in fact. Now, finally the organization is gaining some traction and fans are returning their loyalty.
But the Bobcats aren't there yet. Actually, not by a longshot . This is just a major improvement from where the team was. When you're near the bottom, even a minor step up is a big one. The franchise is still far from breaking even and hasn't regained the trust from a disenfranchised fanbase . Deficits were in the double-digit millions so recovering from that won't be easy. And if this rise to even is going to continue, the team has to continue to do the most important thing: win.
But for once in the Bobcats brief tenure in Charlotte, there are some lights to be seen as the end of a long, long tunnel.
Posted on: August 11, 2010 9:09 am
Posted by Matt Moore
It's been a pretty Jewish month in the NBA.
After Amar'e Stoudemire visited Israel to seek out his Jewish roots, LeBron has also embraced the Jewish world, though his focus (surprise) is on the business side of things.
TMZ reports that James met with Rabbi Yishayahu Yosef Pinto , the "Rabbi to the Business Stars" this week. He reportedly paid the consultant six figures for "spiritual guidance" regarding a retail deal that was hammered out on a private yacht.
I am not making this up. TMZ could be, but that seems unlikely at this point, especially given the photo and everything. Safe to say, LeBron's life is failry surreal. The rabbi apparently is a huge name in New York business, advising people like Rudy Giuliani, members of Congress, and various business giants. Of course, not all's peachy keen with the rabbi. His name has recently popped up in the press regarding a feud with business associate, Solomon Obstfeld, whom he rented an apartment from. Obstfeld later committed suicide and an private investigator is researching whether foul play was in fact involved.
James is definitely making that next step into significant business entity. And the company he keeps is now a reflection of that.
Posted on: August 9, 2010 10:22 am
Posted by Matt Moore
The entire move was bungled. Let's be clear. There were ways to orchestrate the formation of the new NBA superpower that would not only have lessened the devastating PR hit and public resentment, but actually sold the public and media on these players as heroes. After all, it's not like the public is generally poised to reject its favorite athletes over ownership, particularly those athletes that sacrifice money and spotlight time in the pursuit of a championship.
But that's not how it went down. Instead, a public revulsion that is deafening in its retch has spread throughout the land. The Miami Heat have built themselves a new empire, one that is being regarded with terms like "evil," "pompous," and "classless." So surely, where the opinion goes, the dollar goes, right? The money is probably flowing away from South Beach like rats from the sinking ship.
Yeah, so, it turns out, that's not really what's going on. Kind of the opposite, actually. And by kind of, I mean completely.
Reuters brings us an interview with Michael McCullough, the Heat's chief marketing officer. In it, McCullough doesn't deny the existence of a villain's image in the media and among vocal fans. But by hook or by crook, the results are leading to the only thing businesses carry about, the allmighty dollar. McCullough claims that the Heat are now number one in retail sales and that LeBron James' new No.6 jersey is tops in the league. The numbers released last month back up that assessment.
There's also been a lot of talk about tickets for the Heat on the road skyrocketing in preliminary orders, as well as the hyper-covered sell-out of the Heat season tickets (and their release of the ticket sales staff ).
So while people gnash their teeth about how this all went down (and no one thinks it went down well), the bottom line is still coming up Heat. We tend to act like there will be some sort of populist rejection of the Heat because of how arrogance they've come off in public. But already, the sheer starpower has helped build the Heat into a financial supermachine. A few championships, and all the talk about the Big 3's tarnished legacies will be reformed into praise for their sacrifice. We like winners, and we're not particularly stuck on how those wins are made.
No one wants to see how the sausage is made. But the Heat ground out their team on national television, and people are still flocking to stores to buy it.
Posted on: July 26, 2010 11:18 am
Edited on: July 26, 2010 11:19 am
Posted by Royce Young
Detroit Pistons' owner Karen Davidson is looking to sell the team by the fall. But as Greg Krupa of the Detroit News reports , if she wants a high price tag, she may have to wait things out a bit.
The franchise is currently valued at around $470 million according to Jon Pritchard of Club 9 Sports, a consultancy firm. But unless Davidson is willing to slash that price in a big way, she won't be able to unload it to someone soon.
Two problems for Davidson: 1) There's just no competition to drive a bid up. Because money is tight, even the richest folks out there don't want to drop their money on a franchise in a city hit extremely hard by the recession. And 2) Because of the recession, consolidation in the banking industry and the reform of lending practices, finding financing to purchase franchises is beyond difficult.
And on top of that, a lockout could hurt the sale too. Krupa reports that although a work stoppage would actually save owners money for a season, that's not the case for a newly-acquired club's head honcho because they are "in need of revenue from games played to help pay off the purchase agreements with financiers."
Remember, the Warriors were just sold for a record $450 million. The Pistons are a more successful franchise and common sense says they would require at least that same asking price. But as Krupa mentions, the Pistons may be at the going rate of what the Bobcats sold for ($275 million) instead of what it's really worth. So why could the Warriors group get financing? Because they're in San Francisco and the Pistons are in Detroit, where financing is extremely tight right now.
It's highly unlikely the team will move though, so rest easy Piston fans. The arena is still new and can make money and the city will come back. Just right now, things are a little bad.