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SBJ/Jan. 24-30, 2011/Franchises
Amid negotiations, Pistons bid price hovers at $350 million
Published January 24, 2011, Page 7
According to sources, the latest bids for the franchise are in the mid-$300 million range, as Tom Gores, owner of Platinum Equity, reportedly is in the middle of a 30-day exclusive negotiating period to buy the team from owner Karen Davidson.
Gores is the second bidder to be awarded an exclusive negotiating window. He follows Detroit Red Wings and Detroit Tigers owner Mike Ilitch, who failed to make a deal to buy the Pistons. The sale of the franchise to Ilitch was expected in November, but Ilitch reportedly reduced his offer during his 30-day exclusive window after finding that Pistons revenue was lower than anticipated.
Now, it is Gores’ opportunity to complete a deal.
Citigroup is representing Davidson in the deal, and Pistons officials would not comment on the sale.
A drop in the team’s price points to a decline in the value of the franchise that just a few years ago was considered a model NBA team ranking near or at the top of the league in average attendance. But the battered local economy and instability of the front office following the death of owner William Davidson has clearly taken a financial toll of the team.
Gores attended Michigan State University and is chairman of Beverly Hills, Calif.-based Platinum Equity. The company flirted with buying the old Arena Football League before the league filed for bankruptcy and in December bought Schutt Sports out of bankruptcy.
Should Gores make a deal for the Pistons, it would end a protracted sales effort given that Ilitch said in August that he was looking to buy the franchise.
Even if a sales agreement is reached in the immediate future, Gores would likely meet with NBA owners at the All-Star Game and then owners would have to vote to approve the deal at a later date.
“Davidson wants to sell but this is not like the sale of the New Orleans Hornets to the league,” said one source referring to the league stepping in last month to buy the Hornets for more than $300 million after George Shinn could not find a buyer to take over the team with mounting financial losses.