Category: Basketball

NBA owners are likely rejoicing over Thursday’s news that the Boston Celtics are being sold for $6.1 billion, the highest price ever paid for a sports franchise. Not only does it help the valuations of their own teams, but it sets the stage for the league’s expected expansion.

Though nothing formal is underway, the NBA looks on course to add multiple teams at some point in the next few years. Commissioner Adam Silver said late last year that the process had “begun internally at the league office,” with the intention to widen it to owners and potential bidders in the future.

Before that, however, certain goals had to be met. First, the league needed labor peace, which it achieved in 2023 with a new seven-year CBA. Then it turned to its media deals. The NBA signed $76 billion worth of deals last July. The Celtics sale could be viewed as a third hurdle, a new benchmark price from which to begin the conversations with potential groups looking to join the league.

The Celtics announced that a group led by William Chisholm has reached a deal to buy the team in multiple stages.

Expansion is essentially selling equity in the league. Expansion fees are shared directly among owners—to offset the dilution of NBA-wide revenue from things like sponsorships and media deals—and in this case could easily be a $150-plus million windfall for the 30 existing teams for each new franchise added.

Speaking at owners meetings in New York in September, Silver slow-played the expansion process.

“There was not a lot of discussion in this meeting about expansion,” he said. “It was something that we told our board we plan to address this season, and we’re not quite ready yet. But I think there’s certainly interest in the process, and I think that we’re not there yet in terms of having made any specific decisions about markets or even frankly to expand.”

It’s unclear if expansion will be a topic at owners meetings in New York later this month. That said, for many in the league it’s a matter of when, not if. And Silver has said that if it were to happen, he would expect it to be two cities.

Seattle and Las Vegas are by far the most discussed potential landing spots. Fenway Sports Group, owners of the Red Sox and Liverpool FC, are interested in Vegas as an NBA market. So too is Golden Knights owner Bill Foley. In Seattle, the $1.15 billion renovation of KeyArena, now Climate Pledge Arena, was viewed as a significant hurdle cleared.

The NBA last expanded in 2004, when the then-Charlotte Bobcats became the league’s 30^th franchise. The fee at the time was $300 million. Previous reporting has speculated that the NBA’s next expansion fee might be in the $4 billion to $5 billion range,  but that was back when the highest price ever paid for control of an NBA team was $4 billion.

The NHL has added two teams in the past decade—the Golden Knights ($500 million expansion) and the Seattle Kraken ($650 million). The latest expansion teams in MLS have been Charlotte FC ($325 million), St. Louis City SC ($200 million) and San Diego FC ($500 million).

A group led by William Chisholm and backed by private equity fund Sixth Street has reached an agreement to buy the Boston Celtics, according to multiple people familiar with the agreement, in what will be the most expensive NBA team sale in history.

The managing partner of Symphony Technology Group, Chisholm has agreed to buy the team in two stages, which was the stated goal of the Celtics’ current ownership, led by the Grousbeck family. The deal values the team at $6.1 billion in the first payment.

Irving and Wyc Grousbeck announced the deal Thursday morning in a letter to Celtics investors. Sixth Street has committed more than $1 billion to the deal, according to multiple people familiar with the process. The group also includes Rob Hale, a current Celtics investor, and Bruce A. Beal Jr., president of Related Companies.

“This was an extremely thorough, rigorous sale process,” the Grousbecks said in the letter. “We had tremendous interest from potential control owners and we’re grateful for the considerable time and effort bidders put in over the past few months, especially. In the end, Bill and the group he put together came in with a superior final bid.”

Wyc Grousbeck will remain the team’s governor through the 2027-28 season.

The agreement concludes a sale that was closely tracked, both in the NBA and other U.S. leagues, as a barometer for sports valuations overall. The Celtics are among the NBA’s most successful and most popular franchises, but they are a tenant in their arena and own just a small piece of their local media partner. Sportico values the team at $5.66 billion. A common question among insiders over the past few months has been whether the team would sell for more or less than $6 billion.

This deal carries a blended valuation of about $6.6 billion. That’s by far the most ever paid for control of an NBA team, eclipsing the $4 billion valuation when Mat Ishbia bought the Phoenix Suns a few years ago.

Chisholm was born and raised in Massachusetts and attended Dartmouth College, as did two of his children. He is the co-founder, managing partner and chief investment officer of STG, which is based in Menlo Park, Calif. STG’s portfolio includes more than 50 active and closed investments, with about $10 billion of assets under management, as of March 2023. Prior to starting STG, Chisholm co-founded The Valent Group, and he also worked at Bain & Company and PaineWebber.

Sixth Street has more than $100 billion in assets under management. In addition to its Giants LP, its other sports holdings include Legends and NWSL club Bay FC, plus minority investments in the San Antonio Spurs, Real Madrid and FC Barcelona.

Sixth Street would join Arctos Partners and Blue Owl as PE firms with multiple NBA team investments. Arctos is invested in the Golden State Warriors, Philadelphia 76ers, Sacramento Kings and Utah Jazz, while Blue Owl holds stakes in the Atlanta Hawks, Minnesota Timberwolves and Kings.

The current Celtics owners bought the NBA team in 2002 for $360 million. They announced that the franchise was for sale last July, less than two weeks after winning an NBA-record 18^th championship. The group’s stated reason was estate planning in the Grousbeck family, who currently control the team. Irving Grousbeck is about 90 years old, and his son Wyc has run the team for years. Wyc said that week that his family wanted to sell the Celtics in two stages—51% now, and the rest in 2028—with the provision that he stays in control until the second transaction closes.

Sportico reported last week that four groups remained engaged in the process. They were Chisholm, Phillies owner Stan Middleman, the Friedkin Group, and existing investor Steve Pagliuca. Pagliuca was viewed by many throughout the process as a front-runner.

BDT & MSD and JPMorgan Chase co-led the sale process for the Celtics. Jordan Park served as an advisor the Grousbecks.

(This has been updated with an excerpt from the Grousbecks letter to investors.)