The Atlanta Hawks have hired investment bank Inner Circle Sports to try to raise tens of millions of dollars from new limited partners to pay for projects that could include a new practice facility, scoreboards at Philips Arena and a branding campaign, sources said.
|Proposed projects include new scoreboards at Philips Arena.
The activity comes on the heels of the record-breaking, $534 million price paid last month for the Sacramento Kings. It also comes ahead of the NBA this summer planning to start informal negotiations on its next media rights deal. Its contracts with ESPN and Turner Sports run through the 2015-16 season, but with the bullish state of the market for live sports and new digital rights opportunities, a rights increase is expected.
As a result, the valuation assigned to the Hawks for selling the equity may show whether the record price paid for the Kings is a new minimum NBA franchise price — or if, instead, that amount was unique to that situation.
“Atlanta is a totally different market,” said Michael Rapkoch, owner of advisory firm Sports Value Consulting. He cautioned against reading too much into the Kings’ price. “[Atlanta] has a lot of teams, a lot of competing sources for dollars,” he said.
The Kings, by comparison, are the only big league team in Sacramento, and a competing purchase offer from a Seattle group helped boost the sale price as well.
The Hawks practice at Philips Arena. The source who commented on possible pricing said the team is considering a few sites and is having initial talks with advisers for the project but would only say additionally, “We are exploring the possibility of a practice facility.”
Officials with the Hawks and with Inner Circle declined to comment.
The team, which is owned by a group led by Bruce Levenson, has had no meetings with banks or with any local public entities in addressing any financing needs.
The Hawks have had an uneven history in Atlanta, frequently viewed as a distant third in fan support to the NFL Falcons and MLB Braves. However, after recent years marked by relative instability — including legal battles with former partner Steve Belkin, the sale of the jointly owned NHL Atlanta Thrashers, and a failed deal in 2011 to sell the team to Alex Meruelo — the current ownership group is taking a long-term, stable approach in running the franchise. Adding a practice facility could send a message of upgrade to free agents and to fans.
Philips Arena opened in 1999. Its center-hung board is the facility’s original board, dating to the opening.
Details on what the branding campaign would be were not available.
Atlanta finished the 2012-13 regular season with an average attendance of 15,126, ranking the Hawks 26th in the 30-team NBA. They advanced to the playoffs for the sixth consecutive season before losing in the first round to Indiana this year.