Wyc ownership group planning to make Celtics available for sale

nattysez

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The way the news came out, the timeline, multiple contract extensions announced, it just felt to me like things may have already been agreed to, albeit unofficially.

Id be pretty surprised if it wasn’t Pags.
I agree with your last point, but not the rest. If the fix was in for Pags, they could skip the bidding (just as the Mavs did).

FWIW I think it was Mannix who said that we might see a casino company try to come in. Wynn Resorts already has Encore in Boston. They've got a fuckton of money -- in cash, no less -- and are expanding their casino brand into more markets. I wouldn't be shocked if they came in and tried to bid... but it seems like Pags is probably the answer.
The NBA does not allow you to own part of a team and take bets on that team (this was previously an issue with the Maloofs). Zero chance Wynn would handicap their sportsbooks like that.
 

TomRicardo

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How liquid would Kraft be? I’m sure he is pulling a ton of cash out of the Patriots annually, but most of his wealth has to be tied up with the Patriots, real estate, and the paper company.
I don't think the NBA wants to get into the business of allowing a major NFL owner into the NBA. They don't even let Kroenke own the Nuggets (his wife does).

Edit - There isn't a group looking for financing with the big banks which would be difficult on Wyc's timeline to pull off. It is probably a new iteration of BBP with Pags or Bonderman as the governor.
 

HomeRunBaker

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The NBA does not allow you to own part of a team and take bets on that team (this was previously an issue with the Maloofs). Zero chance Wynn would handicap their sportsbooks like that.
There are already several casino owners involved in NBA ownership with Adelson (Sands) with the Mavs, the Rockets owner owns a good piece of Golden Nugget as well. I think Gary Loveman, the old Harrah’s CEO, has been a Celtics owner for over 20 years if he still has his share.

This old Celtics/Kings rule was two decades ago with Loveman prior to the Maloofs. I do not believe this “ban” is true anymore. Even so, the handle on one NBA team would be a drop in the bucket for a casinos sportsbook….and sports betting as a whole is about 10% of what slots/blackjack earn. It would be a complete non-factor to their bottom line.
 

bankshot1

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A couple of weeks ago I speculated about the Celts exploring the idea of building their own place to max revenues. I gotta assume given this bit of news, any new owner, even Pags and crew, would need cash flow from concerts, parking, suites, etc. to service the cost of a $5-6B purchase. This has to happen.

Thanks.

I wonder given that the Celts are a tenant and not owners and don't have access to certain income flows that the above teams have and reflecting the projected higher cash flow from TV, and given a current weakness in commercial real estate markets whether it might make economic sense to develop a 2nd stadium in greater Boston
 

NomarsFool

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Building a new place costs money, too, and there's of course nowhere to build in Boston. I honestly don't see it happening. The new owner(s) would be stepping into an absolute hornet's nest.
 

Ale Xander

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Building a new place costs money, too, and there's of course nowhere to build in Boston. I honestly don't see it happening. The new owner(s) would be stepping into an absolute hornet's nest.
Between West Link Park and the Lottery on the Dorchester/Southie border? The park just north of Andrew?
Aren’t those fairly barren lots of land next to T access?
 

PedroKsBambino

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I wonder if the Jacobs/Delaware North might bid for the Cs to protect their interests and vacancy rates.
Or the reverse---if you were going to pay $5 bil-plus for Celtics you might think that adding the stadium and the far less expensive hockey team (somewhere in the $1.5 bil - $2 bil range) to it is the best overall economics.

The only way you'd build a new arena for Celtics is if you attached it to another development project - Allston Yards or whatever other ones are burbling about. And that's a very, very slow and complicated path. Plus, what's been reported is they are in a lease for TD Garden through 2036 so while that's a negotiation, it's a big cost item to deadl with as well
 

Salem's Lot

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Or the reverse---if you were going to pay $5 bil-plus for Celtics you might think that adding the stadium and the far less expensive hockey team (somewhere in the $1.5 bil - $2 bil range) to it is the best overall economics.

The only way you'd build a new arena for Celtics is if you attached it to another development project - Allston Yards or whatever other ones are burbling about. And that's a very, very slow and complicated path. Plus, what's been reported is they are in a lease for TD Garden through 2036 so while that's a negotiation, it's a big cost item to deadl with as well
The Jacobs just told FSG that they weren’t interested in selling, they would tell Celtics ownership the same. I couldn’t see them possibly getting involved as a limited partner either. The Celtics get a great deal, they pay no rent in exchange for Delaware North getting the concessions.
 

Ale Xander

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I wonder if the Jacobs/Delaware North might bid for the Cs to protect their interests and vacancy rates.
Depends how many winter concerts they can host (where they also would get rent which is massive there compared to most venues of its size, my WAG is only MsG is more expensive.)
 

PedroKsBambino

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I absolutely do not expect Delaware North to sell, to be clear. I just think it's more likely that Celtics owners explore it than that they build a new arena elsewhere...which to me is extraordinarily complicated and slow.
 

Ale Xander

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I absolutely do not expect Delaware North to sell, to be clear. I just think it's more likely that Celtics owners explore it than that they build a new arena elsewhere...which to me is extraordinarily complicated and slow.
They have 4+ years
 

Hoya81

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Between West Link Park and the Lottery on the Dorchester/Southie border? The park just north of Andrew?
Aren’t those fairly barren lots of land next to T access?
IIRC, they aren't barren, just a lot of industrial lots. The T has a big bus depot there as well. I'm not sure the locals would be on board either. They didn't respond too kindly to the joint Pats-Sox Megaplex concept in the 90's.
 

bankshot1

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Depends how many winter concerts they can host
The point was if the Celts new owners need greater cash flow to finance a $5B purchase, which seems logical, it would seem the cash flow for various stadium rev sources would be required. Right now the Celts are deprived of those source of income as the tenants and not owners of the venue. So a new stadium is needed for concerts, parking, concession, suites, etc

So if that's the case a 2nd venue might put a crimp on da Gaaaaaahden and the Jacobs might want to protect themselves from some cold and lonely nights and a lot less beer and dog sales.

Just kicking around some probable outcomes.
 
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Spelunker

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IIRC, they aren't barren, just a lot of industrial lots. The T has a big bus depot there as well. I'm not sure the locals would be on board either. They didn't respond too kindly to the joint Pats-Sox Megaplex concept in the 90's.
Plus, I can't see the city being cool with using available space for a completely unnecessary 2nd pro arena when we have such a housing shortage.
 

Ale Xander

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Plus, I can't see the city being cool with using available space for a completely unnecessary 2nd pro arena when we have such a housing shortage.
Hub on Causeway redevelopment included a 38 story residential tower. Maybe building both is the way to get each done.
 

InstaFace

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Front Office Sports summarizes what we know of the situation here. Some of this was news to me.

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Celtics majority owner Wyc Grousbeck and his partners have officially put the defending NBA champions up for sale, just two weeks after the team won a league-leading 18th title. Grousbeck previously gave no indications such a move would be coming, saying at the team’s June 21 championship parade that “it feels like we’ve got more to do.”

But the massive turn in events—said by the owners to be for “estate and family planning considerations”— sets up several other major events yet to unfold:

  • The Celtics deal will almost certainly set an NBA record for a team sale. The Suns sold in full last year at a $4 billion valuation to Mat Ishbia, while a minority interest in the Nets parent BSE Global recently changed hands at a $6 billion valuation. The Celtics could certainly beat both figures. Estimated to be worth $4.7 billion before this latest title, the Celtics hitting the market carries plenty of extra luster not only because of the recent championship, but also the historic allure of the team. It’s as if MLB’s Yankees, NBA’s Lakers, or the NFL’s Cowboys were being sold—something that hasn’t happened with those teams since 1973, ‘79, and ’89, respectively.
  • The transition period could be tricky. Grousbeck and his partners intend to sell a majority interest in the club either later this year or in early 2025. But Grousbeck himself “expects” to remain as Celtics governor, acting as the team’s key figure and decision maker, until ’28. That elongated period recalls the multi-year transition for the Timberwolves that is now the subject of both formal arbitration and considerable acrimony between that teams’ owners.
  • Both the current Celtics ownership group and the next one are facing big luxury tax bills. Already facing a NBA luxury tax bill of about $40 million for this past season, future years will likely be similar as forward Jayson Tatum is finalizing a supermax contract extension that would reportedly pay him $314 million over five years, helping to keep the Celtics well above the luxury tax threshold. Combined with teammate Jaylen Brown’s five-year, $304 million deal signed last summer, setting a league record, the pair could be set to receive $480 million between 2025 and ’29.
  • There will be relatively few fully attached assets in this deal. The team’s home arena, TD Garden, is owned by Delaware North, the parent company of the NHL’s Bruins, while the Celtics have only a minority interest in its regional sports network, NBC Sports Boston. The Celtics’ elaborate nine-year-old practice facility, the Auerbach Center, is part of the larger, Boston Landing mixed-use development controlled by New Balance.
  • It’s a big change for a very stable and successful group of Boston pro team owners. No major local men’s pro team has been sold since 2002, when Grousbeck and his partners purchased the Celtics for $360 million, and what is now Fenway Sports Group acquired the Red Sox. The NFL’s Patriots, Red Sox, Celtics, and Bruins have gone on to combine for 13 league titles this century.
  • FSG has a major decision to make. The multisport ownership group that also includes the Premier League’s Liverpool, NHL’s Penguins, and golf’s Strategic Sports Group, among other holdings, could be a potential suitor, and FSG principal owner John Henry has an existing relationship with Grousbeck. But pursuing the Celtics would mean abandoning existing NBA aspirations, several years in development, tied to a potential expansion team in Las Vegas. And would current Lakers star and FSG partner LeBron James ultimately become a part-owner of the archival Celtics?
Though Grousbeck is now beginning to wind down his ownership of the team, he still has numerous equity interests elsewhere in sports, primarily through his investment firm, Causeway Media Partners. That company has invested in companies such as ticketing operator SeatGeek, streaming outlet FloSports, and internet radio provider TuneIn, among many others.
---
 

NomarsFool

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It's a weird situation whereby Wyc will be the governor until '28, but the stake (and the financials) is planned to transfer this year (if they find the appropriate buyer, of course). I would have to assume that whomever the new owner(s) are, that transaction will also include some agreement as to what the financials of the Celtics will look like until 2028. There is no way that someone is going to simply just be on the hook for 100s of millions in luxury taxes without a say in that decision. To put it another way, there's no way that the new owners are just going to give Wyc their credit card and let him do whatever the heck he wants. They may be fine with paying luxury taxes before they take over, or they may not, but either way - I'm sure that will be part of the sale agreement.
 

bankshot1

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Do we know how large Wyc's controlling interest is? Is it 51% or 75% or?. It may not require $5B (or whatever) to buy out Wyc.

If I was a minority owner back in 1992 I might want something in place at that time, that in the event of a sale of the the general partner's interest, existing minority owners would have the right of first refusal to kick the tires. Nobody wants to get jammed with a partner they don't want. I'm thinking Pags might have that right of first refusal.
 

Red Averages

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I’d be really curious if anyone knows the ownership percentages. My unconfirmed understanding is that Irv owns the majority, then Wyc and the rest of the group.

What we do know is Pags acquired an additional 8% from Pallotta in 2020 and almost bought the Nets years ago in a deal that would have made him sell his minority stake in the Celtics.

I continue to think this is Wyc and family selling their stake to a Pags led group, but we’ll see.

https://www.sportspromedia.com/news/james-pallotta-boston-celtics-minority-stake-sale-steve-pagliuca-bain-nba/
 

ragnarok725

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It's a weird situation whereby Wyc will be the governor until '28, but the stake (and the financials) is planned to transfer this year (if they find the appropriate buyer, of course). I would have to assume that whomever the new owner(s) are, that transaction will also include some agreement as to what the financials of the Celtics will look like until 2028. There is no way that someone is going to simply just be on the hook for 100s of millions in luxury taxes without a say in that decision. To put it another way, there's no way that the new owners are just going to give Wyc their credit card and let him do whatever the heck he wants. They may be fine with paying luxury taxes before they take over, or they may not, but either way - I'm sure that will be part of the sale agreement.
I wonder if it winds up being something where the final sale value is reduced by a percentage of the luxury tax payments to align incentives.
 

bankshot1

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I’d be really curious if anyone knows the ownership percentages. My unconfirmed understanding is that Irv owns the majority, then Wyc and the rest of the group.

What we do know is Pags acquired an additional 8% from Pallotta in 2020 and almost bought the Nets years ago in a deal that would have made him sell his minority stake in the Celtics.

I continue to think this is Wyc and family selling their stake to a Pags led group, but we’ll see.

https://www.sportspromedia.com/news/james-pallotta-boston-celtics-minority-stake-sale-steve-pagliuca-bain-nba/
I agree.

With nothing really to go on, I think there is an agreement in place to sell a controlling interest to Pags with the understanding, (with a discount to the sales price) Wyc will retain some extended period of being the public face of the Celts and act as Pags consigliere.

I think the estate planning might be more for Wyc's old man who is close to 90 than it is for Wyc.

Pure speculation.
 

TripleOT

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It looks like Wyc is looking for a true market valuation from bidders. Once get that, maybe he goes to Pags to see if he’s interested in buying Wyc’s family’s shares, or a portion of them to get him to 50.1 percent of the team.

Pags is said to have a net worth a bit under $4 billion, which includes his equity in the Celtics. If Wyc gats an offer where the team value is $5.5-6 billion, I don’t think Pags will be liquid enough to cover half of that to buy out Wyc. He will either have to borrow or bring in others to his ownership group.

It will be interesting if an uber rich bidder comes in and blows up the valuation north of $6 billion for this storied franchise. Does Pags go forward, or would be either be satisfied to stay with his current amount of shares, or also sell out
 

Eric Fernsten's Disco Mustache

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Just kicking around some probable outcomes.
I'm 200% in favor of kicking around ideas and brainstorming. So, don't take what follows as criticism so much as taking the brainstorm seriously

As it happens, a certain amount of my day job involves the financing of/investing in greater Boston real estate

If what someone (Wyc, Pags, etc.) wanted was short-to-medium-term positive cash flow (say, next 5-7 years), then launching the predevelopment of a major commercial real estate project would take them in the opposite direction.

A project like this would go through three phases. First, there would be some number of years of "predevelopment" (basically, when you commit staff time to something and start paying architects / design people) until you got to a ground-breaking on a site you control. Predevelopment on a serious project is going to bleed out some number of hundreds of thousands of dollars of cash/year for however many years (5? 9? 13?) from when you start to when you control the ground and have regulatory permission to start building. (Unless someone sues. Then you go back to predevelopment; do not pass go; do not collect $200). Once you can start building you're in the "construction" phase in which you're taking out some hundreds of millions of dollars in construction loans to build the thing, all with no money coming in. Construction can be cash-flow neutral if you take out big enough loans and then your sticks-and-bricks spend ends up under budget (Ha!). Construction on a stadium complex is going to be, what, 2-3 years? In Boston nothing goes quick. When interest rates on commercial projects were 3-4% the monthly debt service expense was still huge. Now that interest rates on construction projects are 7-8% the monthly cost of paying the debt is insane. And you don't have any cash coming in to pay, yet. So, it's all compounding. Which is one reason why real estate people go berserk of delays.

Example: I know a project in construction right now that has ~$150M in construction debt, on which they're paying ~7% interest, which works out to ~$875K in just interest expense (accrued) every month, or ~$30K in interest expense every day.

Coming out of construction, at "conversion", you pay off all your higher-interest construction loans with a new slug of long-term debt-- think your home mortgage only hundreds of millions of dollars, and, I mean, I *hope* that's not the size of your mortgage. Once you've converted to a property occupied by commercial tenants (the Celtics, ground-floor vendors, etc.) you're counting on the rental income they send you to meet your mortgage payments and generate some positive cash flow on top of that. Although you gotta make sure you're setting aside a bunch of that cash flow surplus for things like the elevators breaking and the roof leaking. In an environment where interest rates are low and commercial rents were climbing higher than inflation, the project can turn profitable sooner. But even then, a bunch of the profit is happening on paper, instead of being cash into your checking account. Of course, we no longer live in an environment with low interest rates and commercial rent growth > inflation.

Put the above altogether, any new stadium the Celtics owners might want to build from scratch might not turn materially cash-flow positive for 15-20 years from design inception. And trying to do this in Boston comes with all kinds of risks and delays. Think of how long the Krafts have been trying to build a stadium for the Revolution inside 128. They had two sites that went years in predevelopment before falling apart. And there's no prospect of breaking ground anytime soon.

I'm going on too long, but a thing you figure out in real estate is that it's relatively easy to make money if you own a legacy property outright in an urban area where rents are increasing faster than inflation, and interest rates are low. Take (oh, random example) Donald Trump. You can be more or less brain dead and incompetent at most of running a business and still make a lot of money if you inherit your properties from Daddy (cost of capital = close to zero), property values and rents both increase exponentially over the decades, and you can keep refinancing and taking money out at ridiculously low rates.

Making money owning the right properties is easy. Making money building properties is way harder. And lots of people lose their shirts trying. Of course, the first gets kinda boring. So, most of the smartest people in real estate inevitably get drawn into the second, because it's challenging and cool to create something new, and (sometimes) fun. Although not good for your blood pressure.

Plus, I can't see the city being cool with using available space for a completely unnecessary 2nd pro arena when we have such a housing shortage.
Don't get me started on trying to build residential right now. [/Takes another shot of Bourbon]
 
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Red Averages

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I agree.

With nothing really to go on, I think there is an agreement in place to sell a controlling interest to Pags with the understanding, (with a discount to the sales price) Wyc will retain some extended period of being the public face of the Celts and act as Pags consigliere.

I think the estate planning might be more for Wyc's old man who is close to 90 than it is for Wyc.

Pure speculation.
It wouldn’t shock me if Anne Grousbeck didn’t want to own the Celtics. I have zero information on that. However let’s assume:

- the majority owner is 89 years old
- his stake will be split 50/50 between his two children, Wyc and Anne upon death.
- Anne and Wyc have a great relationship.
- Wyc has been governor of the Celtics and wants to continue given the team is set up to be a title contender for at least another 4 years.
- let’s assume (this is a big question mark), Irv owns 60% and Wyc and his friends own the other 40% (this roughly checks out with Jim Pallotta owning an 8% stake before Pags bought him out).
- Upon death this transfers to: Wyc 38%, Anne 30%, Pags 16% (?), the rest at 16% (?).
- If Anne wants to sell there is no majority owner despite being in the same family. Less clean. Less control over what happens. If Pags buys her 30% stake (in my made up numbers) he’s still not a majority owner.
- Also does he still give Wyc control if he owns more? That’s a tough sell. Also some tax issues between being the GP and LP
- Also a factor: the team will be operating at a loss for several years. If we go on a percentage base, does Irv (or Irv’s children upon death) have enough liquid to afford it (and do they want to?!?). If I’m Anne do I want to float 30% of a large bill?
- OK that’s pretty dicey. Let’s solve for this.
- Wyc wants to run the team for a few years. He needs capital. Anne is fine to sell her share (I assume). Irv wants his kids to figure it out. The 3rd largest owner, and non-family member is actually the richest member of ownership, publicly said he wants to own more, followed up on it by buying 8% more in 2020 at a large, but discounted valuation.
- What if we come up with a way for him to get majority, but allow him and Wyc to continue to run things through this great set up they have created?
- OK he’ll commit to buying it at a valuation of the 2028 Celtics, adjusted for negative cash flow for 4 years, and allowing Wyc to run it. Likely a meaningful discount, but still hefty valuation.
- Now the Grousbeck’s can exit, while still managing the team through a potential dynasty.
- Pags, who likely has a meaningful amount of capital gains, can use the purchase price as a GP as a tax shelter to never pay taxes on those. That’s a massive advantage (hello Steve Cohen and Steve Ballmer). Meanwhile the new Grousbeck’s and Pag’s can estate plan given they are in their 60s with vast wealth.




or im wrong.
 

Red Averages

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I'm 200% in favor of kicking around ideas and brainstorming. So, don't take what follows as criticism so much as taking the brainstorm seriously

As it happens, a certain amount of my day job involves the financing of/investing in greater Boston real estate

snip
Fascinating post. Thanks for the detail (and the laughs).

The combo of large real estate plus GP stake as a tax shelter can lead to nearly infinite wealth in a world where eat the rich sentiment grows. Expect more premiums for franchises where you can own the team and assets around it ala the Mavs, Pats, Revs, Clippers, Mets, etc.
 

InstaFace

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or im wrong.
That all sounds pretty coherent and maybe isn't far from the case, or likely has some parts aligned with what's the case.

One aspect of the estate planning may be just trying to structure the generational transfer in a way that avoids taxes optimally. BBP right now may have a valuation for tax purposes that is fairly depreciated, but upon any sort of sale would create a staggering tax bill for both Wyc and Anne. However, if you set it up so that it's transferring in 4 annual chunks, with different risk and valuation attaching to each, you can take the position to the IRS that each of the shares moving from Irv to Anne/Wyc each year are impaired due to definite negative cashflow, and this should have a value for gift tax purposes far below the nominal value of what's changing hands.

The specificity of "Wyc through 2028" struck me as probably being equal parts "Wyc wants to sail the ship for a few more years, so he'll put a stake in the ground as to exactly what that means", and "BBP / Grousbecks expect the transaction to close in several tranches to optimize valuations for gift/estate tax purposes, probably 4 tranches, hence 2028".

Also, even if Pags intends.to buy his way to a controlling interest, they may well intend to sell 10-20% off as a primary issuance, to a very deep pocketed person who will give the company the cash to sustain the losses the next few years, and let Pags not have to take that hit himself. Just define and quantify their own dilution right now, that will result from the 2024-2028 operating plan, and take it as a hit to equity rather than have to worry about loans or owner capital calls or something.
 

Eric Fernsten's Disco Mustache

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The way you lay it out makes sense and I wouldn't be surprised if it's, as the strategy consultants like to say, directionally correct


The combo of large real estate plus GP stake as a tax shelter can lead to nearly infinite wealth in a world where eat the rich sentiment grows. Expect more premiums for franchises where you can own the team and assets around it ala the Mavs, Pats, Revs, Clippers, Mets, etc.

Another (in the grand scheme of things small, but probably material) piece that I've wondered about w/r/t the timing is that Massachusetts rolled out the 4% 'millionaire's tax' last year, which creates an additional incentive to get the taxable income from your K-1s down. And dovetails with your point about the benefits of doing this deal in stages, spread out over a bunch of years
 

Red Averages

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The way you lay it out makes sense and I wouldn't be surprised if it's, as the strategy consultants like to say, directionally correct





Another (in the grand scheme of things small, but probably material) piece that I've wondered about w/r/t the timing is that Massachusetts rolled out the 4% 'millionaire's tax' last year, which creates an additional incentive to get the taxable income from your K-1s down. And dovetails with your point about the benefits of doing this deal in stages, spread out over a bunch of years
Yeah. You can only depreciate your purchase price, once you fill that up with assets you need the next thing. Which is why that expanding real estate makes for a great pairing.
 

bankshot1

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Please help keep this idea out of the universe. I don't want C. Montgomery Jacobs anywhere near the Celtics.
Don't high stick the messenger. I'd be surprised if the hot dog king of Buffalo wasn't kicking around the idea to guaranty against the possible loss of a AAA tenant, some dark nights in da Garden and a new/sexier competing venue in the future. I'd let the #s guys crunch some #s. Whats the downside of getting a bid package.



Addressed to EFDM

"...If what someone (Wyc, Pags, etc.) wanted was short-to-medium-term positive cash (say, next 5-7 years), then launching the predevelopment of a major commercial real estate project would take them in the opposite direction. "

I reject that thats the aim of Celtics existing ownership. If they wanted to generate positive short-intermediate cash, they'd cut costs and milk the new massive TV deal.But rather, I suspect they would prefer to maximize enterprise value and my thought, and I could be dead wrong, is to control the assets and related cash flows from those assets. And owning the venue is probably the best way to max value. And I never said it would be fast or easy, just that if someone was about to drop $3B-$6B for control of the Celts, paying the Bruins rent and missing out on the related benefits of venue ownership, is probably not the best path forward, and investigating the possibilities, pros and cons, and costs and benefits, of a new arena is just common sense.
 
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Jimbodandy

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Don't high stick the messenger. I'd be surprised if the hot dog king of Buffalo wasn't kicking around the idea to guaranty against the possible loss of a AAA tenant, some dark nights in da Garden and a new/sexier competing venue in the future. I'd let the #s guys crunch some #s. Whats the downside of getting a bid package.


"...If what someone (Wyc, Pags, etc.) wanted was short-to-medium-term positive cash (say, next 5-7 years), then launching the predevelopment of a major commercial real estate project would take them in the opposite direction. "

I reject that thats the aim of Celtics existing ownership. If they wanted to generate positive short-intermediate cash, they'd cut costs and milk the new massive TV deal.But rather, I suspect they would prefer to maximize enterprise value and my thought, and I could be dead wrong, is to control the assets and related cash flows from those assets. And owning the venue is probably the best way to max value. And I never said it would be fast or easy, just that if someone was about to drop $3B-$6B for control of the Celts, paying the Bruins rent and missing out on the related benefits of venue ownership, is probably not the best path forward.
Ha. Yeah, it's a good business move. I have some PTSD from almost 50 years of that guy humping the city of Boston and laughing to the bank. Can count on one hand the number of possible owners that I'd hate more for the Celtics.
 

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Ha. Yeah, it's a good business move. I have some PTSD from almost 50 years of that guy humping the city of Boston and laughing to the bank. Can count on one hand the number of possible owners that I'd hate more for the Celtics.
Fuck the Celts had the Fried Chicken King of Kentucky as owner and he was brutal and almost drove Red out of town. I don't want the Delaware North/Hot Dog Kings of Buffalo calling the 3 point shots, but from their perspective it might make sense.
 

Pablo's TB Lover

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It's a weird situation whereby Wyc will be the governor until '28, but the stake (and the financials) is planned to transfer this year (if they find the appropriate buyer, of course). I would have to assume that whomever the new owner(s) are, that transaction will also include some agreement as to what the financials of the Celtics will look like until 2028. There is no way that someone is going to simply just be on the hook for 100s of millions in luxury taxes without a say in that decision. To put it another way, there's no way that the new owners are just going to give Wyc their credit card and let him do whatever the heck he wants. They may be fine with paying luxury taxes before they take over, or they may not, but either way - I'm sure that will be part of the sale agreement.
But at least the front office and ownership are lining up some cost certainty with all the recent extensions, and not leaving tough decisions with the new group. For the most part the team will be working on the margins with respect to financial decisions between now and '28, unless something drastic on-court happens in the near future. The first significant decision will be Porzingis. It will be unpopular in the immediate aftermath if he is let go due to the apron after next season, but fans would eventually talk themselves into it as the team did make this year's championship run with very limited support from him. (What will be MORE unpopular in retrospect and could screw the team over cap-wise in future years, is if they do a Chris Sale-esque deal with Porzingis where you get 30-40 appearances over a couple future years while paying a huge salary. But that is a different topic...)
 

Salem's Lot

Andy Moog! Andy God Damn Moog!
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You guys don’t have to worry about Jeremy Jacobs buying the Celtics:

A) He’s 85 years old himself, and supposedly not in great health, that’s why he divided up Delaware North among his kids a few years ago.

B) New sports arenas don’t get built in Boston. The Krafts have been trying to build a stadium for how many years? Hell the last stadium that got built was Jacobs’ current building 30 years ago, and they made him jump through so many hoops on land that he actually owned that he almost said fuck it and moved the team to New Hampshire.

C) The Celtics pay no rent in exchange for Delaware North getting the concessions. Now this relationship benefits both sides, DN gets guaranteed concession revenue for 41 to 57 nights per year, and the Celtics don’t pay for a building. From what we know about the Jacobs ownership of the Bruins, why would they try to raise probably a half billion dollars to try to get involved in the Celtics, when they could just book like 50 more concerts per year and make more money (since the concerts pay to use the building)?
 

InstaFace

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...The first significant decision will be Porzingis. It will be unpopular in the immediate aftermath if he is let go due to the apron after next season, but fans would eventually talk themselves into it as the team did make this year's championship run with very limited support from him. (What will be MORE unpopular in retrospect and could screw the team over cap-wise in future years, is if they do a Chris Sale-esque deal with Porzingis where you get 30-40 appearances over a couple future years while paying a huge salary. But that is a different topic...)
As long as those appearances are heavily weighted toward playoff availability, and the results (as I strongly suspect) frequently resemble Finals Game 1, please just tell me where I sign up for that.
 

cshea

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You guys don’t have to worry about Jeremy Jacobs buying the Celtics:

A) He’s 85 years old himself, and supposedly not in great health, that’s why he divided up Delaware North among his kids a few years ago.

B) New sports arenas don’t get built in Boston. The Krafts have been trying to build a stadium for how many years? Hell the last stadium that got built was Jacobs’ current building 30 years ago, and they made him jump through so many hoops on land that he actually owned that he almost said fuck it and moved the team to New Hampshire.

C) The Celtics pay no rent in exchange for Delaware North getting the concessions. Now this relationship benefits both sides, DN gets guaranteed concession revenue for 41 to 57 nights per year, and the Celtics don’t pay for a building. From what we know about the Jacobs ownership of the Bruins, why would they try to raise probably a half billion dollars to try to get involved in the Celtics, when they could just book like 50 more concerts per year and make more money (since the concerts pay to use the building)?
FWIW, Less than a month ago Charlie Jacobs said the family would "love" to buy another team.

https://www.bostonglobe.com/2024/06/26/sports/charlie-jacobs-bruins-owner/?s_campaign=bostonglobe:socialflow:twitter&utm_campaign=Globe_Twitter

Asked if the family would like to buy another sports team, Jacobs said, “I’d love to. I don’t have a target in mind and I would be very cautious about saying anything at this moment in time about what might be on the horizon. But yeah, of course, of course.”
 

InstaFace

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And similarly to Charlie Jacobs, in theory and without considering all the other considerations, I would like to be dating a supermodel. I don't have a target in mind, and I would be very cautious about saying anything at this moment in time given *gestures at wife, and my own plobby self*. But yeah, of course, of course.
 

Red Right Ankle

Formerly the Story of Your Red Right Ankle
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Also, DN has done well by the Bruins since the cap went into place (barring the first year or two after it went into place where they badly botched the landing). Views of DN and the Jacobs being "cheap" are based on sports radio bullshit from 20 years ago.
 

Eric Fernsten's Disco Mustache

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If they wanted to generate positive short-intermediate cash, they'd cut costs and milk the new massive TV deal. But rather, I suspect they would prefer to maximize enterprise value and my thought, and I could be dead wrong, is to control the assets and related cash flows from those assets. And owning the venue is probably the best way to max value.
This ain't wrong

What the Red Sox ownership group has done around Fenway and what the Krafts have done at Patriot Place have both been very lucrative.

One challenge for folks like Wyc & Pags is that since building new destination properties inside 128 is so freakin' hard it creates a serious price premium on existing destination properties in what is a pretty illiquid market. In the classic 'make vs. buy' consideration almost nobody can 'make' so the price of 'buy' goes way up.

Also, I think the potential positive cash flows associated with avoiding taxes generated by unrelated activity (in effect, the path @Red Averages and @InstaFace have been going down) is going to dwarf the potential positive cash flows of doing new, big real estate deals, at least in anything but the long term.

For folks like the Krafts who already control the scarce asset (i.e. the property) this equation looks different
 

Jimbodandy

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Jan 31, 2006
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Also, DN has done well by the Bruins since the cap went into place (barring the first year or two after it went into place where they badly botched the landing). Views of DN and the Jacobs being "cheap" are based on sports radio bullshit from 20 years ago.
Them being horrible owners is based on 50 years of owning an original six team with a huge and loyal fanbase and delivering one cup in that timeframe.

Bruins fans are the worst. Keep all Jacobs away from our Celtics please.
 

Jimbodandy

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This is just crap. You know, a lot of people on this board are fans of both teams right?
John Henry is getting crucified on the main board for delivering four titles in a little over 20 years. Criticize Jacobs for being horrible owners, and Bruins fans talk about how the guy "spends to the cap", disregarding how the guy has milked this fanbase for a fortune and given them one title in half a century.

Apologies for the word choice. Could have said that better. But every business owner should be so lucky as to have a customer who expects so little of them.