The Celtics were busy on Monday, announcing maximum extensions for Derrick White (four years, $125.9 million) and Jayson Tatum (five years, $315 million), and also announcing that Wyc Grousbeck plans to sell his share of the Celtics.
There's a lot to unpack. Let’s start with the easy stuff first.
White’s extension was expected. He could have waited until free agency next summer to get more, but this guarantees him life-changing money as he turns 30 years old (his birthday is Tuesday). He has a player option, and being good at 33 isn’t out of the question so he can opt out and get one last big contract after that.
Keeping White is not only a no-brainer, it’s absolutely imperative. He’s the kind of player every NBA team needs, especially with how the league is shifting. We know it as Mazzulla ball in Boston, but Joe Mazzulla isn’t the only team pushing the heavy spacing, passing, high-IQ decision-making style of basketball. It’s something OKC is leaning on and it’s about to become a staple of the Memphis Grizzlies. White is the prototype for executing that style of basketball. Boston should make sure he’s here for the rest of his productive basketball life.
Tatum’s extension was never in doubt. It’s the new richest contract in NBA history, topping Jaylen Brown’s contract signed last July. It will be broken by every star player over the next five summers, at least. For now, he gets the mantle. Between this, the championship, and the expected Olympic gold medal, this is the summer of Tatum.
The Celtics are lucky to have an ownership group to foot the bill for a super-expensive team and one that, if it’s kept together in the 2025-26 season, would be the most expensive team in NBA history.
At least for now.
The news that Grousbeck is selling his majority stake in the Celtics was shocking, but the wording of why he’s selling was curious.
“The controlling family of the ownership group, after considerable thought and internal discussion, has decided to sell the team for estate and family planning considerations,” the statement read.
I have never, not once, heard it announced that a team was being sold for estate and family planning considerations. The controlling family is Wyc Grousbeck and his father H. Irving Grousbeck, who is turning 90 on July 20.
So to me, and this is just me trying to connect the dots, this feels less like ‘it’s time for me to sell the team and cash in’ and more like ‘we’ve got some tax issues coming up and we need to figure that out.’
Then there's the second sentence of the release:
“The managing board of the ownership group expects to sell a majority interest in 2024 or early 2025, with the balance closing in 2028, and expects Wyc Grousbeck to remain as the Governor of the team until the second closing in 2028.”
Call me crazy, but that is an incredibly specific timeline for a team that was just announced to be for sale. It’s July. If they wanted to put the majority stake up for sale to the highest bidder, how would they know when the sale would be done, when the balance would close, and how long Wyc would be around?
Even if they knew they had the bidders in place to get the team sold quickly, keeping Grousbeck on as team Governor (which is another term for primary owner) until 2028 doesn’t make sense unless they already have a plan in place.
If New Kids On The Block LLC was ready to make a $5 billion bid tomorrow, they wouldn’t just keep Wyc on as the Governor for four more years. New owners want to be the owners, sitting courtside, going to league meetings, and showing off their new vanity purchase.
Which leads me to Steve Pagliuca
I am grateful and thankful for the 21-year partnership I have enjoyed with Wyc and Irv Grousbeck, the Epstein family, and all the incredible Celtics investment partners. (See attached photo for full statement.) pic.twitter.com/4JtIu5gZbY
— Steve Pagliuca (@pagsceltics) July 1, 2024
'Being a co-investor and Managing Partner of the Celtics has been a great honor and a labor of love,” his statement read. “I hope to be part of the Celtics moving forward and will be a proud participant in the bidding process that has been announced today.”
The Globe’s Adam Himmelsbach reported that some in the ownership group are staying on, even though the LLC under which all Celtics investors have bought in is selling the team.
While nothing has been reported or expressed to me, reading the tea leaves suggests some in the current ownership group are planning to not only retain their shares, but purchase at least a portion of the available Grousbeck shares of the team.
At first glance, it seemed like the Celtics owners were just cashing in their chips. They bought the team for $360 million and they can probably get about $5 billion if they sell it outright. That's a 1,400% return on investment. Why not go out on top and sell after not only winning a championship, but setting the team up for at least one or two more runs?
From there, the new owners can deal with repeater taxes, frozen picks, and ultimately breaking up the team that put a little distance between the Celtics and the Lakers. They can be the bad guys who strip it down, rebuild, and start a new era.
But I think the reality is that there will be a lot more continuity within the ownership group. There seems to be a plan in place to make an official sale now and give the new group four years to pay the money and take over.
You know what’s going to happen over those four years?
- At least a couple of deep playoff runs that bring everyone a lot more money.
- A new TV deal, bringing in a flood of new revenue.
- Expansion, which could lead to $6-$8 billion in expansion fees, which could distribute about $260 million to each team.
There are a lot of creative ways for a sale of the team to be structured so the new ownership group can divert a lot of that revenue to the Grousbecks, thus limiting how much capital they need to invest themselves.
This isn’t like Alex Rodriguez and Marc Lore trying to cobble together billions from investors to straight-up buy the Minnesota Timberwolves. This could be the new group of existing owners agreeing to a number and having an influx of money coming in from the league cover a big portion of the price.
Again, this is me guessing, but that sort of plan fits the timeline. It’s a way to keep most of the owners involved (which has been reported) even though it will take a few years (which has already been announced). The Grousbecks have their personal reasons for making this decision (also part of the announcement), even though Wyc has said repeatedly that the team isn’t for sale. The plan I laid out allows them to liquidate their share of the asset without a major change in ownership.