SBJ/June 18 - 24, 2001/Special Report

Boston Celtics LP

Boston Celtics LP
151 Merrimac St.
Boston, MA 02114
Phone: (617) 523-6050
Fax: (617) 523-5949
NYSE: BOS


Introduction:

The Boston Celtics used to be known for winning championships. Now their only claim to fame may be as the last truly major public sports team. The Cleveland Indians, Florida Panthers and Vancouver Canucks have all gone private in recent years. Only the Orlando Predators of the Arena Football League are also public.

For the Celtics, there's been no pot of gold at the end of the IPO rainbow. More novelty stock than serious investment, the shares have been a dud. With little earnings growth and no playoff seasons in nearly a decade, shareholders have had little to cheer about.

A complicated restructuring two years ago left a large part of the team in private hands, but still, shares are there for the buying. Buy one, frame it and hang it over your mantel. That's what they have been good for.

For followers of the sport business, though, the Celtics are a treasure trove. Everything from an NBA team's quarterly revenue to insights into the league are laid bare for all to see. So let's hope the Celtics don't follow their brethren into the private world.


Chairman: Paul E. Gaston

2000 salary:

$500,000
2000 bonus:
0
2000 other compensation:
0
Options:
0
Units owned:
677,600
(25.1%)
1999 salary*:
0
1999 bonus:
0
1999 other compensation:
0
Options:
0

  Price as of June 11: $9.95

  52-week price range: $7.13 to $11.65

  IPO date: 1986

  IPO price: $18.50**

  Underwriter: Smith Barney

  Units outstanding: 2,703,664

  Subordinated debentures outstanding: 2,703,364

  Inside unit ownership: 678,300 (25.1%)

  No. of employees: 47 (full time)

* Gaston declined his 1999 compensation package as a way to minimize the partnership's losses due to the NBA lockout.

** In 1998, the Celtics reorganized, allowing unit holders to take debentures instead of units. As a result, the unit price declined to account for the new debentures. Therefore, the current value of the units cannot be compared to the IPO unit price for performance purposes. It is clear, however, that the Celtics' units have dramatically underperformed the market.


Board of directors:

Paul E. Gaston — A director since September 1992, Gaston became chairman of the board in April 1998. (Owns 677,600 units, or 25.1%)

Don F. Gaston — The father of Paul Gaston, Don Gaston has served as a director since his resignation as chairman of the board in December 1992. (Owns 200 units)

Paula B. Gaston — The wife of Don, Paula Gaston became a director in September 1992. (Owns no units)

John B. Marsh III — A director since September 1992, Marsh is managing partner of Corvus Capital LLC, a strategic investment partnership. (Owns 500 units).

David A. Splaine — A director since January 2000, Splaine is the managing director of Baldwin & Clarke Corporate Finance Inc., an investment banking firm. (Owns no units)


Corporate officers:

Richard G. Pond, executive vice president, chief operating and financial officer, treasurer and secretary (2000 salary: $360,000; bonus: $250,000; other compensation: 0; options: 0)


Largest outside shareholder:

David R. Murphey III, Murphey Capital Inc. — 244,700 units (9.1%)

Performance Record
In millions except per-unit data;
fiscal years ended June 30
2000
1999
1998
1997
1996
Revenue
$81.20
$43.10
$75.70
$63.00
$64.80
Ticket sales
$39.40
$23.30
$39.10
$31.80
$35.30
Television and radio
broadcast rights fees
$34.20
$14.60
$28.00
$23.30
$22.10
Cost and expense
$69.40
$41.50
$61.90
$62.30
$48.80
Team expenses
$56.70
$30.20
$40.40
$40.90
$27.90
Net income (loss)
($3.30)
($10.10)
$12.30
$0.42
$54.20
Basic earnings per unit
($1.23)
($2.85)
$2.45
$0.07
$9.18
Sources: Boston Celtics' annual reports, proxies and
IPO filings
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