Celtics sold to group for $360M

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Posted 8:01AM on Saturday, September 28, 2002

WALTHAM, MASSACHUSETTS - Boston Celtics fans hope the group buying the team will be just as generous when it comes to signing players. The $360 million deal announced Friday surpasses the price of the last two sales of NBA teams - $200 million for the Seattle SuperSonics and $280 million for the Dallas Mavericks. But neither of those teams is an original NBA franchise with Boston's history and 16 championships. ``It's a brand name that doesn't come on the market often,'' former Boston Garden president Larry Moulter said. ``It's a legacy brand name.'' Adding to that legacy will require more money. The incoming owners haven't indicated how freely they will spend on their own players and free agents. ``I think you can have a well run, fiscally sound team and also put a great product on the court,'' said Stephen Pagliuca, ``and that's what we're going to do here.'' Venture capitalists Pagliuca and Wycliffe Grousbeck, as well as Grousbeck's father, H. Irving Grousbeck, the founder of Continental Cablevision and now a Stanford Business School professor are buying the team from Paul Gaston, who succeeded his father, Donald, as owner in 1992. NBA deputy commissioner Russ Granik said he expects league approval of the deal in a couple of weeks. Boston went 49-33 last season, reached the playoffs for the first time in seven years and the Eastern Conference final for the first time in 14 years. But after the season, the Celtics chose not to re-sign Rodney Rogers, and traded for Vin Baker. Some interpreted those moves as a way for the Celtics to save money under the NBA luxury tax that teams must pay if they exceed a certain payroll total. Wycliffe Grousbeck, known as ``Wyc,'' and Pagliuca are longtime residents of the Boston area and fans of the Celtics. ``It's a tremendous honor to be here,'' Grousbeck said. ``As we all know, this is the greatest team in NBA history and one of the greatest teams in sports history.'' About six months ago, the group asked investment bankers Bob Caporale and Randy Vataha, who are partners, to find a basketball, baseball or hockey team it could buy, not necessarily in Boston. ``Boston, for Wyc, was clearly first choice and, at that point in time, I don't think anybody thought there was a team available,'' Caporale said. He said he contacted Gaston in July but was told the team wasn't for sale. Eventually, Caporale was told to make an offer and did that in August. An agreement was reached this month. ``I'm shocked because this happened so quickly. None of us had any idea this was going on,'' former Celtics great Bob Cousy said. ``I'm happy it was a local group and, based on what they paid, they are obviously well financed.'' Secrecy was critical because the Celtics are a publicly held business and advance word could have led to stock purchases in anticipation of its value increasing with the sale. Under the agreement, the group would buy out Gaston as well as the 48 percent stake in the team owned by a publicly traded limited partnership, which will continue to exist but essentially sell the new owners its stake in the team, Celtics executive vice president Richard Pond said. The partners said they have lists of local people to contact as potential investors. ``You can't schedule big events in your life,'' Paul Gaston said about the timing of the deal. `` It's an emotional day for me and my family and it's not something we certainly have taken lightly over the past few weeks. ``We've agreed that it's time for a change and I think we're leaving the Celtics in very good local hands with Steve and Wyc.'' Forbes Magazine recently estimated the value of the franchise at $218 million, 13th in the NBA, and well behind the first-place Los Angeles Lakers at $403 million. The team is the second Boston sports franchise to change hands this year. The Red Sox were bought by a group led by Florida financier John Henry in February for $700 million, including debt. After the announcement Friday, the Celtics released their financial results for the year ending June 30. The team reported profits of $4.6 million, or $1.62 per share, up from a loss of $4 million, or $1.27 per share, a year ago.