Out-of-towners likely to be in control of Atlanta Hawks

[HawkItus]

Out-of-towners likely to be in control of Atlanta Hawks

SUBSCRIBER CONTENT: Mar 6, 2015, 6:00am EST

 

FILE/BYRON E. SMALL

At least four groups have submitted prequalifying bids to buy the Hawks.

 

Maria Saporta Contributing Writer- Atlanta Business Chronicle Email

It is highly unlikely someone from Atlanta will be the controlling owner of the Atlanta Hawks when the sale of the basketball team is completed.

According to multiple interviews and other published reports, all the leading members of interested bidders are from other cities. In fact, one report in the New York Daily News has said that Chinese conglomerate Fosun is bidding.

All indications show that at least four groups submitted non-binding prequalifying bids in late February to the two companies overseeing the sale of the Hawks. They were hired by the Hawks owners who are selling their majority stake in the team — namely Bruce Levenson and his partners in the Baltimore-Washington, D.C., area. Levenson announced he would sell his stake after it was revealed he had sent a racially-insensitive email in 2012.

Two companies — Goldman Sachs and Inner Circle Sports — are reportedly vetting the financial viability of the different bidders and will be meeting with representatives of the different groups over the next couple of weeks.

The next step would involve the bidders submitting binding offers for the Hawks, and it has been estimated that the team could be sold for between $800 million and $900 million. Everyone involved has had to sign non-disclosure agreements.

Although Atlanta has many wealthy individuals, it does not have a large group of billionaires who would be willing to spend hundreds of millions of dollars to buy a controlling interest in the Hawks — much less a majority interest.

So according to numerous sources — from both personal interviews and published reports — here is a synopsis of the most likely prospective bidders for the Hawks:

One of the leading teams is led by Steve Kaplan, minority owner and vice chairman of the Memphis Grizzlies. Other members of that team include Jason Levien, former CEO of the Grizzlies who is the current managing general partner of DC United in Major League Soccer, and baseball legend Hank Aaron. ESPN also reported that the Kaplan team includes Indonesian billionaire sports and media magnates Erick Thohir and Handy Poernomo Soetedjo.

Another group interested in bidding on the Hawks is headed by Mark Rachesky, chairman of Lionsgate Entertainment. ESPN.com, quoting unidentified league sources, identified Rachesky as a distressed asset investor who heads up the investment firm MHR Fund Management and is a close associate of John Malone of Liberty Media, the controlling owner of the Atlanta Braves.

Several minority investors are expected to be part of Rachesky's bid, including Steve Starker, Randy Frankel and Jesse Itzler, a former rapper who is married to Spanx founder Sara Blakely.

For the past several weeks, there has been widespread speculation that two former NBA players, Grant Hill and Junior Bridgeman, a leading Wendy's franchisee, had teamed up to put together a bid to purchase the Hawks.

According to several reports, their group included Bryan Colangelo, former general manager of the Phoenix Suns and Toronto Raptors, and his father, Jerry Colangelo, former owner of the Suns.

Former NBA player Chris Webber also had been trying to put a team together to buy the Hawks, but as of press time, there was no confirmation that he had submitted a prequalifying bid.

Based on all information currently available, no one from Atlanta likely would own a controlling interest in the Hawks, according to people close to the situation.

Hawks President Steve Koonin, however, indicated that it was still too early in the process to make such a unilateral statement.

"There are significant Atlanta folks involved," Koonin wrote in an email — reiterating that he was subject to a non-disclosure agreement. "NOBODY has determined percent of ownership yet."

Several wealthy local business leaders have expressed an interest to become minority owners in the Hawks, and they have talked among themselves about being available to join up with any one of the out-of-town bidders.

As previously reported by Atlanta Business Chronicle, the husbands of the WNBA Atlanta Dream owners, Kelly Loeffler and Mary Brock, are interested in supporting their wives' investment by buying a stake in the Hawks.

Jeff Sprecher, CEO of Intercontinental Exchange Inc., and John Brock, CEO of Coca-Cola Enterprises Inc., see the opportunities to jointly market the Hawks and the Dream to a new audience.

Another local businessman who has emerged as an interested minority buyer is Doug Hertz, president and chief operating officer of United Distributors Inc.

Hertz has been an active player in Atlanta cultural, civic and business circles. He currently serves as chairman of the Woodruff Arts Center and as chair of the Georgia Research Alliance. He also is a minority owner of the Atlanta Falcons.

According to people close to the Hawks, there are several people from the city who are watching to see which team will end up with the winning bid.

At that time, a serious courtship between the prospective new owner and Atlanta minority owners is expected to begin. But much will depend on how expensive a price-tag is put on the Hawks and whether the the locals are able to see "an upside" in making such an investment.

The new ownership rules of the National Basketball Association state that no team can have more than 25 owners, and each owner must have at least a 1 percent share of the team. If the Hawks sell for $800 million, that means that one would have to invest a minimum of $8 million to be an owner.

Also, one point that often is overlooked is that it is expected that the current Atlanta owners of the team — Michael Gearon Sr., Michael Gearon Jr. and Rutherford Seydel — will end up having a stake in the Hawks no matter who ends up buying the team.

Maria Saporta covers non-profits and philanthropy

 

[macdaddy]

I've always really liked Maria but her Hawks stuff just seems like she's working PR for the Gearons and Seydels.  How is it such a given they will have a stake in the team?   I'm sure the buyers are thrilled with the 'you'll have to give these guys who threw a grenade into the previous ownership group stake in the company you just paid a billion dollars for'

[Guest]

Sigh!!

[frosgrim]

Gearon is a snake in the grass. If he's still part of the group that gets control, I still refuse to spend money to attend games or go to Phillips for anything.

[Guest]

I've finally reached the conclusion that Saporta is high-brow tabloids. Or is it the uneducated business weekly? Shoot, I guess I haven't reached a conclusion.

Either she really is that stupid to believe things she writes down, or she thinks her readers are stupid enough to believe it. Either way, it's poor taste and not something to put stock into.

The idea that your owner needs to be from an area is ridiculous. For one, you can go through the list of Principal NBA owners (http://en.wikipedia.org/wiki/List_of_NBA_team_owners) and quickly tell that most of them are not from the team they own. That is a rarity.

If you come up with a list of "good owners" I think you'd be hard pressed not to have Cuban, Ballmer, Dan Gilbert, Paul Allen, and Leslie Alexander. They all spend large amounts on their team. None of them are from the city where the basketball team they own plays.

[HawkItus]

I've finally reached the conclusion that Saporta is high-brow tabloids. Or is it the uneducated business weekly? Shoot, I guess I haven't reached a conclusion.

Either she really is that stupid to believe things she writes down, or she thinks her readers are stupid enough to believe it. Either way, it's poor taste and not something to put stock into.

The idea that your owner needs to be from an area is ridiculous. For one, you can go through the list of Principal NBA owners (http://en.wikipedia.org/wiki/List_of_NBA_team_owners) and quickly tell that most of them are not from the team they own. That is a rarity.

If you come up with a list of "good owners" I think you'd be hard pressed not to have Cuban, Ballmer, Dan Gilbert, Paul Allen, and Leslie Alexander. They all spend large amounts on their team. None of them are from the city where the basketball team they own plays.

She is saying they don't reside in Atlanta, not natives.  Those guys reside in and around the cities those teams are based.

[AtLaS]

I was really hoping we'd get a single, majority owner but it's looking like another group purchase.  

[AHF]

I was really hoping we'd get a single, majority owner but it's looking like another group purchase.  

 

There is still hope it will function like a single owner.  It is unusual to have the kind of splintered, "everyone has a minority interest" type of arrangement we had with the ASG.  Most groups have a majority owner and then others with minority stakes and the majority owner gets to make all the key calls without there needing to be a group discussion.

[Guest]

She is saying they don't reside in Atlanta, not natives.  Those guys reside in and around the cities those teams are based.

The point you seem to be implying is that the new owners will not move to the area. That would be like the Clippers getting upset that Ballmer bought the team when he didn't reside there. But guess what, people move. And some of our previous owners (cough cough, Levenson) maintained a residence here. When you have a lot of money, you can have multiple residences unless you're talking about your primary residence for tax purposes. Saporta doesn't make that distinction, she refers to Levenson as being from DC.

But Saporta doesn't talk about where people currently live. She is referring to where people are from. Which again, is a stupid f***ing distinction.

[HawkItus]

The point you seem to be implying is that the new owners will not move to the area. That would be like the Clippers getting upset that Ballmer bought the team when he didn't reside there. But guess what, people move. And some of our previous owners (cough cough, Levenson) maintained a residence here. When you have a lot of money, you can have multiple residences unless you're talking about your primary residence for tax purposes. Saporta doesn't make that distinction, she refers to Levenson as being from DC.

But Saporta doesn't talk about where people currently live. She is referring to where people are from. Which again, is a stupid f***ing distinction.

umm no the assumption that they will is stupid.  If someone like the guys who bought the Braves buys the Hawks they probably will not.  But, whatever man you are making your share of assumptions about the article where she basically is giving information with very little opinion.

[AHF]

umm no the assumption that they will is stupid.  If someone like the guys who bought the Braves buys the Hawks they probably will not.  But, whatever man you are making your share of assumptions about the article where she basically is giving information with very little opinion.

 

Saporta burned some bridges with prior articles with posters like hawksfanatic.  I don't see a ton of content in this one other than recapping what we have heard from other sources and getting some additional insight into some of the possible Atlanta individuals who are interested in picking up a stake in the team.  After some of the prior coverage, I personally take anything she writes that relates to Gearon et al. as being an accurate relay of what Gearon wants but not necessarily reality.

[Guest]

umm no the assumption that they will is stupid.  If someone like the guys who bought the Braves buys the Hawks they probably will not.  But, whatever man you are making your share of assumptions about the article where she basically is giving information with very little opinion.

Assuming people move is stupid?

Edited March 6, 2015 by hawksfanatic

[AHF]

Assuming people move is stupid?

 

It depends on what the meaning of the word 'is' is. 

[curtmcgirt]

To me the entire point of this article was to get out that Gearon and others still want to be part owners. 

[Guest]

It depends on what the meaning of the word 'is' is. 

Well I'm certainly seeing lots of redefining here.

[PSSSHHHRRR87]

I like Rachesky. He is the closest to a Arthur Blank-type situation the Hawks can get. He reminds me of Tom Gores buying the Pistons. Gores came in, fired Dumars, hired Stan Van Gundy, and hasn't been heard from since. SVG runs the Pistons. I feel Rachesky would do the same. He'd see what Ferry & Bud have created and allow our basketball minds to make decisions. This is the opposite of the Gearon's prying hands. Rachesky would look at this as an investment and I think he'd follow suit with his owner buddy with the Braves.

[MaceCase]

To me the entire point of this article was to get out that Gearon and others still want to be part owners. 

Yea, that was a long build up to a disappointing yet obvious climax, much like a Shyamalan movie.

[Diesel]

The Bridgeman Group seems interesting because you have a lot of basketball people involved AND You would also have some NBA power players in ownership.

[Twinblade]

If Fosun ends up winning the bid, does this mean hawks will have a game in China?

[MCVicious]

Can someone convince Bernie Marcus and his 3.5 billion to buy the Hawks. Him and his boy Arthur can be twinsies and run two of the best sports franchises in Atlanta just like they ran Home Depot together.

 

http://www.bizjournals.com/atlanta/morning_call/2014/03/8-georgians-on-forbes-2014.html