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Levenson has yet to retain adviser to handle sale of Hawks

Nearly a month after announcing his intent to sell the controlling interest in the Atlanta Hawks, Bruce Levenson hasn’t hired a bank to help sell the team, leaving interested parties waiting in the wings.

Levenson announced Sept. 7 that he would sell his majority stake after he self-reported to the NBA a racist email he wrote in 2012. Multiple sources said that as of last Wednesday, Levenson had not hired an adviser to help sell the franchise that he and his partners in Atlanta Spirit bought in 2004.

“Unless they are in conversations privately, normally when you make the announcement that you are selling, you have a plan in place,” said Bob Caporale, chairman of sports investment banking firm Game Plan. “This is an unusual situation, but it’s not that difficult, and [the Hawks] have done it before.”

Hawks majority owner Bruce Levenson announced Sept. 7 his intention to sell.
Photo by: AP IMAGES
The bank hired by the seller is typically charged with detailing the team’s financials so that they can be reviewed by potential buyers. When the Los Angeles Clippers were sold earlier this year (to Steve Ballmer, for $2 billion), Shelly Sterling, wife of team owner Donald Sterling, hired Bank of America after the NBA banned her husband from the NBA after his racist comments became public in late April. A report detailing the Clippers’ financials dated May 25 was subsequently produced by Bank of America. On May 29, Ballmer had an agreement in principle to buy the Clippers.

Sources familiar with the Hawks’ finances said the franchise has annual revenue of about $120 million. By way of comparison, the Clippers, according to the Bank of America report issued for their sale, had $150 million in total revenue for the team’s fiscal year ended June 2013.

The source also estimated the value of the Hawks at $700 million, or roughly 25 percent higher than the $550 million price paid for the Milwaukee Bucks by Marc Lasry and Wes Edens earlier this year.

The Clippers and Bucks deals represent the highest prices ever paid for NBA franchises.

Despite the lack of a financial adviser, Levenson is no stranger to the sales process when it comes to the Hawks. Earlier this year, the Hawks sold minority stakes in the team to five investors. (Inner Circle Sports was retained as part of that sales effort.) In 2011, California developer and pizza chain owner Alex Meruelo was in line to purchase the Hawks, but that deal ultimately was terminated.

Now comes the sale of the 50.1 percent of the franchise owned by Levenson and his Washington, D.C.-based partners Ed Peskowitz and Todd Foreman.

The remaining stake in the team is owned by the Atlanta-based contingent of Michael Gearon Jr., Michael Gearon Sr., Rutherford Seydel and Beau Turner. Sources familiar with the Hawks’ finances were not expecting that group to increase its stake and acquire the team’s majority control.

A rift between the sides reportedly has developed related to the team’s investigation of racially insensitive comments made by Hawks general manager Danny Ferry in a phone call with team executives related to pursuing Luol Deng as a free agent. But according to people familiar with NBA team sales, any such discord is unlikely to hurt the Hawks’ value or the team’s sales process.

The expectation of a lucrative new local TV deal — the team’s current deal expires in the coming years — along with a new national TV deal that sources have projected will exceed $2 billion per year on average, is helping drive the value of the Hawks. The NBA’s developing international presence is also seen as a key piece of business that is attracting interest to ownership for the league’s franchises overall.

“The NBA has tremendous momentum,” said George Postolos, former Houston Rockets president and CEO and now principal of The Postolos Group, a Houston-based sports advisory company. “It is a seller’s market.”

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