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SBD/December 16, 2010/Franchises
Ilitch Reportedly Balked On Pistons Over Inflated Revenue
Published December 16, 2010
Red Wings and Tigers Owner Mike Ilitch, "after agreeing to a price in excess" of $400M to purchase the Pistons, "discovered the revenues presented in the prospectus were inflated," according to a source cited by Mike Ozanian of FORBES. Ilitch then "lowered his offer price and the deal quickly blew up." Ozanian wrote it "will now be hard for" Pistons Owner Karen Davidson to get $400M for the team "given the Ilitch debacle and dismal state of Detroit's economy" (FORBES.com, 12/15). An Ilitch Holdings spokesperson "declined to comment on the report, citing a confidentiality agreement" with Palace Sports & Entertainment from August. In Detroit, Myers & Gallagher note Forbes "has valued the Pistons at $479 million, fourth-highest in the NBA," but "analysts have expected the selling price to be significantly lower because of Michigan's difficult economy." Ilitch "remains in the ownership mix, as does" Platinum Equity Chair & CEO Tom Gores. A group led by former Rockets President George Postolos also was "among the initial bidders," and the NBA earlier this month "confirmed interest from Middle Eastern groups in Dubai, Abu Dhabi and Qatar" (DETROIT FREE PRESS, 12/16).
INSIDER'S PERSPECTIVE: CRAIN'S DETROIT BUSINESS' Bill Shea wrote the Forbes report suggests that Ilitch Holdings' hiring of former PS&E President & CEO Tom Wilson "may have paid off." Wilson "spent 30 years working for" late Pistons Owner Bill Davidson, and he "knows just about all that can be known about PS&E and the Pistons' finances." There is "no word on Wilson's specific involvement in the sale/negotiation process, but logic says that his eyes are on the financial information assembled by Davidson's camp" (CRAINSDETROIT.com, 12/15).