The Boston Celtics sale raises lots of questions

Why are others reporting $6.1 billion, which still would be a record?

• The press release referred to "an initial valuation of $6.1 billion," but the word "initial" is doing a ton of work.
• That's how much Chisholm's group will pay for the control stake this summer, but he won't buy the remaining interests until 2028. The valuation for that second piece could be around $7.3 billion. The weighted price would come out to around $6.7 billion.

Was Chisholm the highest bidder?

Yes. He also agreed to allow seller Wyc Grousbeck to remain as team CEO and NBA governor until the final close in 2028.

• That last part is something Grousbeck indicated he wanted when announcing the auction last summer, partially for the sake of continuity, but it was dropped as a requirement somewhere along the way. Chisholm smartly recognized its value.
• Remember, Wyc doesn't really want to sell the team. His 91-year-old father Irv does, for estate purposes, and Irv has the much bigger stake.

Does Chisholm have all the money?

• No, his bid is not fully financed, and this is where is might get sticky.
• Particularly since one of the other bidders, existing owner and Bain Capital exec Steve Pagliuca, did submit a fully financed bid (albeit at a lower price and without Wyc remaining as CEO). An offer from Freedom Mortgage CEO Stan Middleman was priced higher than Pagliuca and lower than Chisholm — yes, in the middle — but it's unclear if it was fully financed.
• Chisholm still has time, since the NBA won't vote to approve the deal until June. But almost everyone has already seen this opportunity, most at a lower price, so his best chance is to pull some folks from the other three bidding groups.
• Pagliuca will certainly try to hold his people firm as a possible Plan B, while foutth-place bidder Dan Friedkin already seems to have moved onto an NHL expansion effort in Houston.

Is this a private equity deal?

• Sort of. Chisholm is doing this as an individual. His firm, Symphony Technology Group, has no piece of it.
• But the bid is being backed by a giant check from Sixth Street Partners, which has other NBA club interests, and there's almost certainly structure on there. Pagliuca's bid, for what it's worth, didn't include institutional money, although there were conversations.

Is this a good deal?

For Chisholm it is. He was born and raised in Massachusetts, even though he now lives in California, and owning the Sacramento Kings just isn't the same.

• For Sixth Street, it may come down to that structure. On its surface, it looks kind of awful, even if NBA team values keep climbing.
• The Celtics don't own their arena, which means the team doesn't get money from tickets or concessions. Let alone from renting it out for concerts or leasing space to other retailers. Plus, the team is about to begin paying a ton of luxury tax on its high-priced roster, thus is expected to lose money (even if it wins another title this year), and has diminishing returns from its local TV deal.
• Don't be surprised if Chisholm takes a year or two of loss so that he can best enjoy those courtside seats, and then looks to pare costs.

Anything else interesting?

• Grousbeck was advised by BDT & MSD Partners, whose co-CEO is Gregg Lemkau. Turns out that Lemkau and Chisholm were college soccer teammates at Dartmouth.

Will the NBA be happy?

• Of course. It now has the most valuable franchise in all of pro sports, despite narratives about NFL superiority. That would remain true even if Pagliuca or Middleman somehow managed to win out.
• It also decreases the likelihood of league expansion in places like Seattle or Las Vegas. Owners love expansion fees, but now their clubs could maybe get the same cash by selling a small stake in their clubs, in a revalued market, without the media income split becoming further diluted.