Analysis: Celtics being sold to William Chisholm at record $6.1 billion price

The Boston Celtics are being sold to William Chisholm, co-founder of Symphony Technology Group, for a record $6.1 billion. That surpasses the sale of the Washington Commanders for the highest price tag for a North American professional sports franchise. 

“Bill is a terrific person and a true Celtics fan, born and raised here in the Boston area,” Wyc Grousbeck said in a statement. “His love for the team and the city of Boston, along with his chemistry with the rest of the Celtics leadership, make him a natural choice to be the next Governor and controlling owner of the team. I know he appreciates the importance of the Celtics and burns with a passion to win on the court while being totally committed to the community. Quite simply, he wants to be a great owner. He has asked me to run the team as CEO and Governor for the first three years, and stay on as his partner, and I am glad to do so.” 

Chisholm's group includes Rob Hale (a current Celtics owner) and Bruce A. Beal, Jr., President of Related Companies, as well as Sixth Street, a global investment firm, among others. The deal has been announced but still needs to be approved by the NBA. 

“Growing up on the North Shore and attending college in New England, I have been a die-hard Celtics fan my entire life,” Chisholm said. “I understand how important the Celtics are to the city of Boston – the role the team plays in the community is different than any other city in the country. I also understand that there is a responsibility as a leader of the organization to the people of Boston, and I am up for this challenge.

“My partners and I have immense respect for Wyc, the entire Grousbeck family and their indelible contributions to the Celtics organization over the last 23 years. We look forward to learning from Wyc and partnering with Brad Stevens, Joe Mazzulla and the talented team and staff to build upon their success as we work to bring more championships home to Boston.”

Current Celtics minority owner Steve Pagliuca released a statement expressing disappointment about his rejected bid. 

There is no timeline for the completion of the sale or an introductory press conference. 

Karalis’ analysis: 

Pagliuca’s statement says a lot. First, his mention of new partners with deep resources to compete for championships “luxury taxes be damned,” suggests (a) that he wouldn’t break up this team next season and (b) he thinks Chisholm might. 

Second, “we had no debt or private equity money that would potentially hamstring our ability to compete in the future” suggests that he questions the structuring of Chisholm’s bid, which raises a valid question here. 

Chisholm is a private equity guy who got an investment from another equity firm. Those entities tend to be cold and calculating when it comes to money. Their investments need to work efficiently, i.e. make money, or else changes need to be made. 

Chisholm and his group are paying $6.1 billion for the most expensive roster in NBA history if it remains intact next season. Considering the Celtics rent the arena, there's no incoming revenue stream from TD Garden other than game nights. This was always going to be the biggest question for the incoming owners, but Chisholm’s background as an investor adds emphasis to the question. 

How does someone driven by bottom-line profits in all of his investments plan to handle the bottom line of a team this expensive? 

Chisholm has been characterized as a lifelong Celtics fan, and the Globe reports he’s going to buy a home in Boston once the deal closes. That suggests he plans on being visible, even though Wyc Grousbeck has said he’ll remain on as governor. There will likely be no long-distance edict from places like Buffalo where the front office is left to take all the slings and arrows. A visible owner who faces the media from time to time will at least be accountable for his actions, whatever they may be. 

I will say I’m surprised that Pagliuca’s bid didn’t win. Obviously, I’ve been expecting that to be the case since day one, and even in today’s reporting it was said that he was considered the favorite through much of the process. His statement suggests his bid was competitive with Chisholm’s. I’m intrigued by the line “if the announced transaction does not end up being finalized, my partners and I are ready to check back into the game and bring it home.” It’s probably just a sort of “hey if you break up with your new boyfriend I still love you,” kind of thing, but it’s interesting to me nonetheless. There is, after all, a closing process that still has to happen, so nothing is final until it's final. It would be shocking, though, if the deal fell through at this point. There have been rumors of a strained relationship between Grousbeck and Pagliuca, but I’m not sure if that would have played a role. Business is business, but if those rumors are true, it could have played a role in breaking a tie. 

On a grander scale, the sale of the Celtics now sets the market for NBA expansion. With the Celtics process close to being finalized, a $6 billion price tag on new franchises can be justified. Owners who were scared out of the Celtics process for various reasons, including not owning their own building, can now get their bids together for whenever the league officially starts the expansion process. I expect expansion talk to start heating up this summer.

As far as the Celtics go, it’s hard to say at this point what Chisholm’s plan is. No one knows much of anything about him. According to The Athletic, Brad Stevens met with all the potential owners, which is probably more to let them know what the current situation is, how much money is laid out in salary and taxes, and what the potential avenues are moving forward. Chisolm's entry into the process included a full breakdown of Plans A, B, and C, so there should be no surprises. The Celtics are about to enter a new chapter with a lot of questions. Chisholm will be the person to start answering them soon.