SBD/April 18, 2014/Franchises

Bucks' New Owners Committ To Adding Local Investors To Group

Edens (pictured) and Lasry saw opportunity in the control over a new arena
Speculation about investors "with Wisconsin ties" buying into the Bucks "may still come true despite Herb Kohl’s plan to sell the team" for $550M to N.Y.-based Fortress Investment Group co-Founder Wesley Edens and Avenue Capital Group Chair & CEO Marc Lasry, according to Rich Kirchen of the MILWAUKEE BUSINESS JOURNAL. Allen & Co. Managing Dir Steve Greenberg, whose firm was retained by Kohl to bring in new team investors, said, "I would be very, very surprised if there are not local people who come in with them as partners. They will be names you will recognize." Milwaukee businessman Ted Kellner, who has been linked as a potential investor, said that Lasry and Edens "discussed the possibility of adding local investors at a meeting in Kohl’s downtown Milwaukee office before the Wednesday press conference" announcing the sale of the team. Kellner said that the arrangement "likely would be similar" to what Brewers Owner Mark Attanasio has with his ownership group in the team. Greenberg said that he "will introduce the prospective Wisconsin investors to Lasry and Edens." They ultimately will "make the decision on whether to invite investors with local ties," but that likely will not occur "until after the NBA approves their acquisition of the Bucks." Fortress spokesperson Sarah Watterson said that they "definitely will look into adding investors with Wisconsin ties" (BIZJOURNALS.com, 4/17).

DOLLARS & SENSE: In Milwaukee, Don Walker in a front-page piece reports the sale of the team "set off a debate of what a professional sports franchise is really worth, and how much money people are willing to part with to own one." The Bucks "have been an underperforming franchise with the worst won-loss record" in the NBA this year, the lowest per-game attendance in the league and an "aging arena." As a result, the Bucks "might not look like much right now." But Edens and Lasry "saw an opportunity to buy an NBA franchise while having some control over construction of a new arena." Even Lasry "seemed to acknowledge the big bet made by him and his partner." However, not everyone "was convinced the sale price made sense." SportsCorp President Marc Ganis said, "There won't be an NBA team that sells in the future for less than what these guys paid. The Bucks were the least valued team in the league but the value of all teams just went up significantly" (MILWAUKEE JOURNAL SENTINEL, 4/18). Mavericks Owner Mark Cuban thinks that the Bucks' $550M sale price is "a bargain, suggesting the true value of NBA franchises is north" of $1B. Cuban: "I think it's worth a lot more than that. I think someone got a bargain. You can't look backwards. You've got to look forward. You don't value teams based off what happened in the past" (ESPNDALLAS.com, 4/17). Meanwhile, GRANTLAND's Bill Simmons wrote observers "can’t rationally assess the 'value' of anything when ego is involved." Simmons: "What is the value of sitting courtside as everyone watches YOUR team? What’s the value of having an NBA superstar laughing at your jokes, treating you like you’re the president and pretending you’re his buddy? (GRANTLAND.com, 4/17).

OH, WE'RE HALFWAY THERE: In Milwaukee, Jim Stingl writes Edens and Lasry "need to convince us to put up a few hundred million dollars in private and public funds to replace the still-new-looking BMO Harris Bradley Center." The pair on Wednesday pledged $100M toward a new arena, as did Kohl. Stingl: "If you're an optimist, that puts the financing at the halfway point already. But if you believe in the ballooning costs we often see on megaprojects like this and understand that Milwaukee likes to argue for a decade before doing anything, we're probably closer to the one-third mark" (MILWAUKEE JOURNAL SENTINEL, 4/18).
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