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SBJ/Dec. 6-12, 2010/This Week's Issue
Sources: Pistons won’t sell before break
Published December 6, 2010
The sale of the Detroit Pistons will be delayed until at least the NBA All-Star break in mid-February, according to financial sources, and possibly longer.
Citigroup, which represents Pistons owner Karen Davidson, recently notified interested buyers that it would like to close a deal by February. Given the NBA’s sales-approval process, closing by the All-Star break suggests that a sales agreement would need to be signed in the next few weeks.
NBA owners must approve any sale, and typically, a prospective new owner meets in person with the NBA board of governors before a vote. The next scheduled BOG meeting is during the All-Star break, which is set for Feb. 18-20 in Los Angeles.
NBA Commissioner David Stern told reporters in mid-October that he thought an agreement to sell the Pistons could come by the end of November, following a 30-day exclusive negotiating period between Davidson and Detroit Tigers and Red Wings owner Mike Ilitch. But the Ilitch-Pistons talks broke down over price, though Ilitch remains firmly in the mix to buy the team and is seen as the most logical buyer for the franchise because he could move the Red Wings and Pistons into one building.
Even if a deal is announced in the next few weeks, closing by mid-February could prove tough. The Golden State Warriors’ recent sales agreement was announced in July, but the deal only closed in November, four months later and one month after then-prospective owners Joe Lacob and Peter Guber met with NBA owners in October at a BOG meeting.
New Jersey Nets owner Mikhail Prokhorov reached a sales agreement to buy the Nets in September 2009 and met with owners the following month but did not receive his ownership approval until May, eight months after the initial agreement.
Citigroup wants to accelerate the timetable because there are concerns about the effects of ownership uncertainty on the franchise. Davidson first announced her interest in selling the club in January. Also, with a lockout looming in the summer, a sale could prove trickier as that situation gets closer.
Citigroup and the Pistons declined to comment.
Ilitch exclusively negotiated with Citigroup for a month, but after initially indicating he would be willing to pay about $450 million for the full package of assets, including the team, arena and other entertainment venues, the talks fell apart over price.
The exclusive period ended in early November, with Citigroup reopening the bidding. A group led by former Houston Rockets President George Postolos was among the bidders prior to the exclusive negotiating period between the Pistons and Ilitch. Tom Gores, chief executive of private firm Platinum Equity, also has expressed interest in a deal.