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Forbes' Mike Ozanian reports that the purchase value of the Detroit Pistons in Tom Gores' deal to buy the team was $325 million. Gores bought all of Palace Sports and Entertainment, which includes the Pistons, Palace of Auburn Hills, DTE Energy Music Theatre and the Meadow Brook Music Festival. The Pistons portion of the deal, which is expected to give Karen Davidson a minority stake in the team, is valued at $325 million.
During Thursday's introduction event, Gores was asked what he paid for the Pistons. He declined to give a specific number, however. Instead Gores simply said that the cost of the deal was somewhere "between 0 and 6."
If Forbes' number is accurate, Gores paid far less than $400 million, which is what the NBA was supposedly hoping to get for the team. Of course, the fact that Davidson is expected to retain a stake in the team could have something to do with the lower number.
In any case, considering the economy in the Detroit area isn't great and the decline in ticket sales over recent years, $325 million is still quite a bit for the Pistons. Gores will have to work to rebuild interest and value in the franchise after a rough couple of seasons.
On Thursday afternoon, Tom Gores, the new owner of the Detroit Pistons, was officially introduced at The Palace. Gores thanked Karen Davidson and Ethan Davidson, introduced himself and what he's all about and then answered questions from members of the media and blogosphere.
The search for a new owner of the Pistons began a year ago, and only this week did the keys to the empire officially get handed over to Gores. Now a new era of the Pistons is set to begin. The franchise can finally move forward and start making moves to build for the future. Gores will get together with Joe Dumars to make plans involving the coaching staff, offseason moves and the 2011 NBA Draft. Time is of the essence with this sale taking so long to be completed, but Gores and company seem ready to make things happen with the Pistons going forward.
It's not October 2010, but it still feels good. The Detroit Pistons have finally been sold. After being approved by David Stern and the NBA board of governors yesterday, Tom Gores officially closed on the deal to purchase the team and take over as head honcho at The Palace of Auburn Hills for the foreseeable future [via Vince Ellis of the Detroit Free Press]:
Detroit, meet the new owner of the Pistons. Tom Gores is now the fourth owner of the franchise that has won three NBA championships after closing a deal to purchase the team this afternoon. [ ... ]
[ ... ] Terms of the deal weren’t announced. But a person familiar with it said the agreement places a so-called enterprise value of more than $400 million on the team, the Palace of Auburn Hills and DTE Energy Music Theatre. But Gores may pay closer to the $275 million-$300 million range for the assets after backing out minority ownership interests, debt and other liabilities.
The Pistons will hold a press conference tomorrow at the Palace to introduce the new owner.
Commissioner David Stern confirmed before Game 1 of the NBA Finals between Miami and Dallas that the NBA Board of Governors unanimously approved of the sale of the Detroit Pistons to the Flint native businessman Tom Gores. Gores commented on the approval through a spokesman shortly after:
“We appreciate the approval of the Board of Governors and the support of Commissioner Stern,” Gores said tonight through a spokesman. “I understand the importance of the trust that has been placed in us, and we’re very excited to be a part of something as special as the NBA. We can’t wait to make a difference in Detroit. We look forward to getting to work right away.”
The Board of Governors approval is not the final step but it is a significant one. Stern said he expects the deal to be done by the end of the week.
When Gores is finally entrenched as the owner, it will allow him to finally make some personnel decisions regarding head coach John Kuester and president of basketball operations Joe Dumars. Kuester is widely believed to be out after just two seasons as Pistons coach; he was even rumored to already have been fired over the weekend.
Dumars’ future is not as clear. Though he’s made his mistakes, he’s been handcuffed by the ownership saga and has not been able to make an significant moves, notably with disgruntled shooting guard Richard Hamilton. There’s speculation that Dumars will likely be given a second chance with the team.
The Detroit Free Press is reporting that the sale of the Detroit Pistons to Tom Gores is likely to be closed by the end of the month. Soon-to-be former owner Karen Davidson is hoping that everything will be finalized in the next couple of weeks, allowing Gores to take over the franchise and Palace Sports & Entertainment.
Although Davidson is selling the team, she will retain a minority interest.
In her first significant interviews since deciding to sell the team, the Palace and Palace Sports & Entertainment, and eventually choosing the billionaire financier Tom Gores and his private equity firm as the next owner, Davidson said Wednesday she would still own part of the operation and she intends to be in attendance at games.
"But I have seven grandchildren and another one on the way," she said, laughing. "That is where I'll be moving to be now — with my grandchildren.
"I still fully intend to come to games and I always will be a Pistons fan," Davidson said.
Terms of the deal still have not officially been released.
New Pistons owner Tom Gores (ah, feels so good to type that, even if it's not officially official, yet) was at the Pistons/Cavaliers game the other night and was a huge hit with the crowd. At one point, he was shown on the jumbotron dancing to Journey's Don't Stop Believin' as ex-Pistons owner Bill Davidson's widow Karen Davidson looked on, enjoying the show.
Before the celebration during the game, Gores spoke with the Pistons' beat writers about how "ecstatic" he is to be soon taking over the team as its owner [via Detroit News]:
"This is a community asset. This is not an asset we are going to handle alone. We have to do this together.
"This is us. I'm excited to be back in Michigan. And I'm happy that everybody's kind of welcoming me back," he said. "I grew up in sports. But mostly, I'm excited about inspiring the town." [...]
"I'll be whatever owner this team needs and this franchise needs," said Gores, who lives in Beverly Hills, Calif., but also maintains a residence on Grosse Ile. "So when they need me back in Michigan, I'll be back."
"I'll be impactful, that's for sure. I want us to be successful. I didn't show up here not to be successful."
"Whatever it takes." [...]
The best quote -- though he may not have done this consciously -- was when he paid homage to the 2004 championship team by saying the Pistons need to go to work:
"Bill clearly built this house, and I have to build on it. I haven't done anything, yet. Bill did a lot. He built this stadium, he built the team, he built the championships and we have to go to work."
"All we want to do now is go to work and help the team, the Pistons organization, the community."
"All we've done is make a deal to buy the team," he said. "We have to do more, and that's what we're here for."
Gores certainly has his hands full with this team and will need to make some tough decisions in the coming months before next season. He has already stated that Dumars will be the team's GM as long as he wants, which is probably disconcerting to some. But I have a feeling Gores will pull out a short leash if the team's success doesn't make a quick comeback.
Gores was dancing Monday night and so are Pistons fans now that this saga is over. Now, let's go build the city another champion.
It's been a turbulent two years since former Detroit Pistons owner William Davidson passed away in 2009. The team went into limbo, and that limbo finally ended on Friday when businessman and Flint native Tom Gores agreed to purchase the team from Davidson's widow, Karen. There's been a lot of twists and turns along the way, here's just a few of the highlights:
March 13, 2009
Pistons owner William Davidson passes away after years of failing health at age 86. Davidson bought the team in 1974 from Fred Zollner for $6 million. His widow Karen Davidson assumes control of the franchise.
January 10, 2010
Karen Davidson announces that the Pistons are officially up for sale.
June 3, 2010
The Pistons hire Citi Private Bank Sports Advisory to assist with the sale.
August 9, 2010
Red Wings and Tigers owner Mike Ilitch makes a formal statement expressing his interest in the team. Ilitch said he feared the team would move out of the state if an outside bidder purchased the rights to the club. It's also thought Ilitch wanted the team to leverage a new joint arena for the Pistons and Red Wings in downtown Detroit.
August 13, 2010
Former Michigan State and Los Angeles Lakers star Magic Johnson expresses interest in being part of a group to buy the Pistons. Johnson would have had to sell his share in the Lakers to do so, which he did on Oct. 19.
August 19, 2010
The sale starts to heat up as four potential buyers are announced. Beside Ilitch they included Gores, former NBA executive George Postolos and a foreign group from Dubai. Interestingly, only the two local buyers were given exclusive bidding windows.
October 5, 2010
Ilitch is announced as the preferred bidder to buy the team from Davidson. At the time, it was expected that a deal would be done by Oct. 27. Yeah....good luck with that.
October 21, 2010
NBA commissioner David Stern comments on the deal and expects an agreement to be in place by November. Again, good luck.
November 8, 2010
Ilitch announces that a deal is 'close' during Jim Devellano's introduction into the Hockey Hall of Fame.
November 13, 2010
Just five days after Ilitch's announcement, Davidson reopens the bidding for the Pistons. Later it would be learned that Ilitch caught the Pistons inflating numbers and substantially lowered his bid.
January 7, 2011
Gores is announced as the preferred bidder in the Pistons sale and is granted an exclusive 30-day window.
January 26, 2011
The Pistons' value is estimated to be $360 million by Forbes, falling from $479 million the previous season.
February 10, 2011
The Detroit Free Press reports that Gores has reached a tentative agreement to buy the team, valued at $420 million. However, the Detroit News later conflicted that report saying no deal was in place, which turned out to be the case.
February 26, 2011
A 14-day extension of Gores' exclusive bidding window ends and no deal is in place yet. The Detroit News reports that the price of the team is again the central issue bogging down the negotiations.
March 8, 2011
Forbes reports that Ilitch is back in the mix to buy the team.
March 30, 2011
The negotiations between Gores and Davidson are far enough along that the NBA Board of Governors is expected to vote on the deal by mid-April.
April 8, 2011
The Pistons formally announce the sale of the team to Gores, ending nearly two years of turmoil. Exact terms of the agreement were not disclosed but it's believed to significantly less than the $420 million the NBA was hoping for. It will be the most expensive purchase in the Detroit sports scene since Ilitch bought the Tigers in 1992 for $82 million.
For much, much more detail on how this all unfolded throughout the past couple of years, check out the rest of the SB Nation Detroit StoryStream on the sale.
The Detroit News is reporting that Tom Gores will be the new owner of the Detroit Pistons. Citing an announcement from Platinum Equity, Gores' investment firm, the News says a "definitive agreement" has been reached for him to buy the Pistons and Palace Sports & Entertainment.
Karen Davidson, the soon-to-be previous owner of the Pistons, had this to say in a statement:
"We are pleased to welcome Tom Gores as the new owner of the Detroit Pistons and Palace Sports and Entertainment," Davidson said in a release. "Just as my late husband, Bill Davidson, was the face of the Pistons, I am confident that Tom will bring the same energy, dedication and love to this organization. I look forward to seeing Tom follow in Bill's footsteps, and carry on his legacy."
The next step is for the sale to be approved by the NBA's Board of Governors, which could happen at a meeting later this month. If approved, Gores will take over the Pistons and Palace of Auburn Hills, as well as DTE Energy Music Theatre and the operating rights to the Meadow Brook Music Festival.
Currently the exact terms of the agreement (i.e. how much Gores paid to complete the sale) have not been disclosed.
Since last summer, there have been quite a few twists and turns involving the sale of the Detroit Pistons. One day it looks like a deal is imminent, and the next the parties involved in negotiations are still far apart. Case in point: It was reported yesterday that the sale of the Pistons to Tom Gores could be voted on by NBA owners in April, indicating that an agreement was close. Today, however, the Detroit News reported that a deal still is far apart due to a number of issues.
The main problem all along with the sale of the Pistons has been the price of the team. By all accounts Mike Ilitch originally offered more than $400 million before lowering his bid to only $360 million. This was reportedly the result of finding out some numbers were inflated by the Pistons.
Tom Gores has been negotiating with Karen Davidson for a couple months now, and every time it looks like things are getting close the issue of the price comes up. Gores isn't going to overpay for the Pistons, and his desire to look into more and more of the team's financial information is reportedly now frustrating Davidson.
In fact, some close to the negotiators say that not only is no agreement imminent, Karen Davidson's fatigue and frustration are growing.
One source close to Davidson last week said the process is so utterly problematic, she feels as though she has lost control of it. Her concern, in part, is that while Gores continually requires more information, too few details of an agreement are in place, despite more than two months of exclusive negotiations.
The News also mentions that issues involving whether or not "Davidson and Bill Davidson's children will retain a portion of the franchise or are paid significant revenue from the entertainment properties, including the DTE Energy Music Theater" are still unsettled. This is why an agreement doesn't appear so imminent with so many key issues unresolved.
The one other interesting thing mentioned in the News' report is that Gores has been exclusively negotiating with Davidson for two months. I was under the impression that his exclusivity period had ended, but the News reports that Ilitch and a new, unnamed prospective bidder have been blocked from getting involved in negotiations.
All has been quiet on the Detroit Pistons sale front lately. The last thing we heard was that Mike Ilitch was possibly back in the mix following the end of Tom Gores' exclusivity period. Since then there hasn't been much activity that has been reported on, but it looks like things may be moving forward behind the scenes. From CBS Sports' Ken Berger:
Word in league circles is that negotiations to sell the Pistons to billionaire Tom Gores are far enough along to expect the matter to come to a vote by the Board of Governors April 14-15 in New York. League approval will be a welcome development for the organization, whose basketball operations department was paralyzed by the proposed sale. The Pistons are one of a handful of teams not to complete a single roster transaction this season.
If true, this would be great news all-around for the Pistons. Assuming the vote goes as planned, Gores could become the team's new owner in a matter of weeks, allowing the franchise to finally move forward under new leadership.
For team president Joe Dumars and head coach John Kuester, this could be the end of their time with the Pistons if Gores becomes the new owner, according to Steve Kyler of Hoops World.
While current Pistons' president Joe Dumars has never been on the hot seat under current ownership, there is a growing sense that Gores will look to clean house once he owns the team and that could mean that both Joe Dumars and current head coach John Kuester could be out this summer as Gores looks to take the team in a new direction and give it a fresh start.
I've been ready for a fresh start for months now. As great of a job Dumars has done in the past, I do think it's time for somebody else to step in, and it looks like that could end up happening if Gores takes over the team.
(Via MLive's Chris Iott)
Ilitch lowered his bid last year—about $360 million according to the News—when he found out the Pistons’ projected revenue was inflated. Iltich is hoping to get the team at about the same amount, which is what Forbes has the Pistons’ overall value set at.
California financier and Michigan State graduate Tom Gores became the leading contender after the Ilitch deal fell through. Gores’ 14-day extension on his 30-day exclusivity window ended with no deal in place and it’s believed the Pistons are asking for $420 million, much more than what Ilitch initially offered.
The Detroit News reported that there is also a new bidder to consider:
The News reported Saturday that at least one entity that had not previously submitted a bid sought to make an offer recently but was told to wait, while negotiations continued with Gores.
But Ozanian gives a different interpretation, saying that the new bidder is acutally Ilitch:
The Detroit News reports owner Karen Davidson said the other day that there is another prospective bidder for the team should she and Gores fail to come to terms.
Now I am hearing that Ilitch is that guy and he is looking to grab the team and the Palace of Auburn Hills for right around the $360 million we pegged the Pistons at in January,
Davidson is nuts if she thinks Gores is going to give her the asking price of $420 million when Forbes and Ilitch both estimate it significantly lower. Gores didn’t become one of the richest men in the world by overpaying and he’s certainly not going to for a floundering NBA team. There’s a good possibility that this sale will continue well into the offseason, which is bad news for GM Joe Dumars as he tries to fix the mess the Pistons have become on the floor.
WXYZ (Channel 7 in Detroit) is reporting that the Ilitch family still is interested in buying the Pistons and Palace Sports & Entertainment. The source of their report is Tom Wilson, who is the former president and CEO of Palace Sports & Entertainment and now works for Ilitch.
For the last two months, all signs have pointed to businessman Tom Gores becoming the owner of the Pistons. He had a month of exclusivity in the negotiations and then another two weeks after that. The most recent exclusivity period recently expired without a deal being in place, however.
Negotiations with Gores have reportedly been stuck on the price of the Pistons. The NBA apparently wants to get more than $400 million for the team, but they are not believed to be worth that much. It's unlikely that Gores, a savvy businessman, is going to overpay to complete the purchase, which is why this sale once again appears to be at a standstill.
Mike Ilitch was the original frontrunner to purchase the Pistons and Palace Sports & Entertainment and even said back in November that a deal was getting close. Things fell apart just days later, though. Ilitch reportedly found out that revenues were inflated and lowered his bid from more than $400 million to a lower figure. Negotiations fell apart in the wake of this and Gores stepped to the lead of the pack.
It's no surprise that Ilitch still has interest in making a deal happen. The real question is if he and Karen Davidson could work out a deal. If Gores is struggling to close the deal because the NBA wants more than $400 million, I don't see how Ilitch would change his mind and go back to his original offer. Then again, there have been so many twists and turns in this story that I suppose nothing should be unexpected at this point.
For the third time since the Detroit Pistons were put up for sale, an exclusive negotiating period has expired without a deal being in place. Mike Ilitch's exclusive negotiating period came and went with no deal, and now Tom Gores has had two negotiation periods expire.
The first time Gores got into serious negotiations to purchase the team from Karen Davidson, he received a 30-day exclusivity window. It seemed like a deal was close considering he showed up to The Palace, but the exclusivity period came to an end and a new 14 day period began as negotiations continued.
Now those 14 days have passed and no extension has been granted for the most recent exclusive negotiating period. Talks are still continuing, but The Detroit News reports that the price of the team is a big point of contention right now.
By one measure the NBA uses to establish an ideal value for its franchises, the price tag for the Pistons should be about $420 million, according to sources who have participated in sales in both the league and other professional sports.
But why would a demonstrably astute businessman like the private equity financier Tom Gores ever pay $420 million for the team, The Palace of Auburn Hills and ancillary entertainment properties when the Ilitch family offered only about $360 million?
The answer is: He will not.
It has seemed for a while now that a deal was imminent, but if neither side will budge on the price then talks could come to a standstill. A compromise will have to be reached, although I can't see Gores overpaying for a team that probably is nowhere near worth more than $400 million.
Stern addressed the Pistons sale during his state of the league address at the NBA’s All-Star Weekend in Los Angles. While he didn’t say positively a deal was going to happen, he expects an announcement this week, whether Gores purchases the team or not.
“I met with him at my offices where he met with our entire senior staff and we know that there are very intense negotiations going on which are in their final stages, which means either there will be a deal or there won’t be a deal within the next week.
“And every indication is that there will be a deal and we’ll see how that goes.”
Gores was in town for the All-Star game to update Stern on the progress of the sale. Gores’ exclusivity window to buy the team ends this week, but could have it extended if a deal is imminent.
In the last 24 hours, there have been a number of conflicting reports about whether or not Tom Gores has reached an agreement with Karen Davidson to buy the Detroit Pistons. Some reports stated that a deal was already done, others said that a deal was close to being finished and a couple stories were adamant that nothing was done yet.
Based on the statement Davidson released this afternoon, it appears those reporting that nothing is done yet are correct. Here is the one-sentence statement she put out today:
"The parties are continuing to work in a cooperative manner and have agreed to a new 14-day exclusivity period."
Gores received a 30-day exclusivity period in the first week of January. With the 30 days up, this new 14-day period will allow Gores and Davidson to continuing their negotiations about the Pistons, The Palace and the rest of Palace Sports & Entertainment.
While it's clear right now that nothing is done just yet, the fact that Gores' exclusivity period was extended is a good sign. It seems a deal could be agreed to at any time, and it's possible they're just ironing out the small details right now. Whatever the case, all signs still point to Gores eventually becoming the Pistons' new owner.
The Detroit Free Press is not the only source going with the lede that a deal has been reached to sell the Pistons to Tom Gores. Sources of Crain's Detroit Business are also suggesting a deal is done:
"Negotiations are over. There is a deal. It’s for The Palace, the entertainment business, for the team. It’s subject to the approval of the NBA," said the source, who agreed to speak only on the condition of anonymity. [...]How much owner Karen Davidson agreed to sell the basketball team for is unknown, but she and other family members will retain a minority stake.
"A percentage will remain with the family," said the source. "It’s a done deal, waiting for approval."
The Free Press had a dollar amount, so it might be safe to assume that the two have different sources scooping them.
Of course, that doesn't necessarily make it reliable. The Detroit News is still adamant that a deal has not been reached.
Reports Thursday night that a tentative agreement was reached for Gores to purchase the team and Palace Sports & Entertainment were denied. A second report today published on crainsdetroit.com quoted a source saying that a deal is in place and that the NBA had been informed.
Enough progress has been made that an original exclusive period of 30 days for Gores to negotiate an agreement will now extend through late February, according to sources familiar with the talks. They cautioned that while the sides are moving closer, there's no agreement on a price and the bargaining has been hard.
That said, sources on both sides said their confidence a deal is attainable increased in the past two weeks.
FOX Detroit's Jennifer Hammond entered the fold with this tweet:
Amid reports that Pistons sale is all but signed, an NBA source told me "nothing official has been submitted to the league office yet."
Hmm, what to believe? The Detroit News has often been the first to update news on the sale throughout this whole frustrating process, so it might incline some to take their word. However, as Ian Casselberry pointed out to me, it's interesting that the business sources are the ones reporting a tentative deal has been reached. Of course, they were also the first to report that Mike Ilitch was getting close to buying the team and that obviously didn't happen. The Detroit News used that prior, perceived falsity (it was actually more than likely true, and then Ilitch discovered that Davidson's crew was fudging numbers) to tinker with a Ben Wallace quote:
"You guys (certain media outlets, but not The Detroit News) say it's a done deal, I've heard that before," Wallace said at Friday morning's shootaround. "Mrs. D, she's been honest with us, she loves us, she's watched us grow up. She's been honest about it, that she's not as passionate about this as her husband was. We can respect that."
That's definitely an intentional, and fair, edit by The Detroit News. But just because they didn't report before that a deal was close with Ilitch (and by all other accounts it was), it doesn't mean they didn't get out-scooped here.
In the meantime, the Freep continues to be confident in their initial report, not appearing to backpedal, but have posted that Gores is back in California for a family matter and no "official" announcement will be made today. It'll be interesting to hear what the Pistons' broadcast says about a potential sale tonight when the Pistons take on the Heat.
And, just like that, we have yet another conflicting report as it pertains to the future ownership situation of the Detroit Pistons. Contrary to what the Detroit Free Press's sources are telling them, The Detroit News is reporting that Tom Gores has not purchased the team, yet:
The Pistons are about to extend exclusive negotiations with the California financier Tom Gores for two weeks. The move comes after negotiations gathered steam this week.
Gores has remained in town for several days to participate in them directly. But sources close to the process told The Detroit News on Thursday there is no agreement in place to sell the team and the two sides continue to bargain on a price.
Corroborating the News, shortly after tweeting that they received word on a tentative deal being reached, Channel 4's Devin Scillian said that Karen Davidson herself told their Bernie Smilovitz that, at the moment, no deal between Tom Gores and the Pistons was in place.
Is Karen Davidson trying to control the announcement here? Is The Free Press throwing it against the wall and hoping it sticks? The Free Press is certainly exuding confidence -- in addition to the breaking news item, they've published three. separate. Tom Gores related stories in the three hours since their initial report.
Tom Walsh of the Detroit Free Press reports that Tom Gores has reached a tentative agreement to purchase the Pistons from Davidson.
The agreement, valued at $420 million, was reached this evening, after several days of intense bargaining over details.
Details on the base selling price, the implications of a looming labor dispute in the NBA, and to what extent current ownership may stay involved with the team were said to be key points of debate. It was not immediately clear how the deal would be structured.
The sale could be announced as early as Friday, pending NBA approval. The NBA office will run its own check on the new ownership, after which commissioner David Stern makes a recommendation to the league’s current owners. Three-fourths of the team owners must approve the deal.
As Walsh points out in his article, the process can sometimes move quickly, as when Michael Jordan bought the Charlotte Bobcats. But the approval process for Mikhail Prokhorov to purchase the New Jersey Nets took eight months.
Given Gores’ presence at Tuesday night’s Pistons-Spurs game, all indications seemed to be that a sale agreement was pending. A Flint native and Michigan State graduate, he was perceived as the front-runner to buy the Pistons since August.
At one point, however, it looked as if Red Wings and Tigers owner Mike Ilitch had an agreement to purchase the team. But the deal fell apart when inflated revenue numbers compelled Ilitch to lower his initial offer. By January, Gores emerged as the clear favorite to become the new owner.
Forbes magazine lists Gores’ net worth at $2.2 billion. He is the founder and chairman of Platinum Equity, a private equity investment firm that owns more than 30 companies generating more than $27 billion in sales per year.
Not a whole lot has been said publicly about the Detroit Pistons sale lately. Really the only public comments came last week from the NBA, which said that Tom Gores and the Pistons "are continuing to work towards completion of a deal." Gores and Karen Davidson are keeping things close to the vest, but it's not tough to connect the dots and realize that the completion of this sale may happen quite soon.
Last night, Gores was at The Palace for the Pistons/Spurs game. He watched the game from Davidson's luxury suite, and when asked if this was a good sign for the sale, Davidson simply replied, "We're family."
Last week, Gores reportedly hired a public relations firm to help him in the Metro Detroit area should he buy the team. Nothing is official until it is official, but this is yet another sign that a deal is imminent. Negotiations can obviously break down at any time, as we found out with Mike Ilitch quickly lowering his bid last year, but the fact that Gores watched a Pistons game from Davidson's suite indicates that things are getting close.
Another indication that the sale is close to being done comes from Matt Dery. As he walked past Davidson's suite during last night's game, Dery heard one of Gores' "buddies" yell to a friend, "We are at the 2 yard line." That could mean anything considering it was heard without context, but that does seem to be where the sale is at right now. Gores appears to be knocking on the doorstep of becoming the Pistons' new owner, and right now it seems like it's only a matter of time until the purchase is officially made.
According to Mike Ozanian of Forbes, the NBA will not allow the Detroit Pistons to be relocated. Although the Forbes story links to a year-old article about the Pistons moving to Pittsburgh, apparently these rumors were popping up again recently with the team still for sale. It seems as though things with Tom Gores are progressing nicely, but until a deal is closed, there will be rumors about the future of the franchise.
I personally never heard any of the rumors about the Pistons moving to Pittsburgh, but the idea of relocation has always been out there should somebody not from the area buy the team. Las Vegas was mentioned once as a possible destination for the Pistons should a non-local buyer end up purchasing the team, but of course nothing ever developed with that rumor.
Forbes' report about how the NBA will now allow the Pistons to move, at least not to Pittsburgh, is based on the fact that the Detroit area could better support a professional basketball team. The Pistons have had many issues in recent years, and Detroit isn't exactly in a great economic situation, but the apparent belief from the NBA is that the long-term future looks more promising for the Pistons in Detroit than another city.
Another reason why relocation of the Pistons is unlikely is because the New Orleans Hornets could be moved once they are sold. Having multiple teams relocating at the same time would be bad for the NBA's image, so that apparently plays into the NBA's reasoning to keep the Pistons in the Detroit area.
Businessman Tom Gores emerged as the favorite to buy the Detroit Pistons when negotiations with Mike Ilitch fell apart last November. All signs pointed to Ilitch buying the team, but that never happened and Gores has been in the driver's seat for a deal ever since.
Earlier this month, Gores received a 30-day exclusive negotiating period to purchase the team. The end of the 30 days is nearing, and Tom Walsh of the Detroit Free Press reports that Gores is "still actively assessing the potential purchase," which would include the Pistons, Palace of Auburn Hills and DTE Energy Music Theatre.
According to Walsh, representatives of Gores have been in the area in recent weeks to crunch numbers, study the Pistons' operations and meet with Karen Davidson's advisers. He also reports that Gores was in New York City this week to meet with officials from the NBA, making it seem as though a deal is imminent if Gores decides to pull the trigger.
Should the negotiations break down with Gores or should he decide to pass on purchasing the Pistons, a new name to consider based on the Free Press' report is Eric Lefkofsky, who was born in Detroit, grew up in Southfield and graduated from the University of Michigan. He is an entrepreneur and one of the backers of Groupon, and the Free Press said that a "whiff of interest" surfaced from him. This report may just be wishful thinking coming from the Pistons, though.
The Detroit News reports that the Pistons approached Lefkofsky about buying the team, not the other way around. What's more, according to the News' report, Lefkofsky is not interested in purchasing the team at this time. Per the News' source, the Pistons asked if he was interested in looking into the deal and that was it. "There are no legs, other than that," said the source.
The Pistons were ranked as the fourth most valuable team in the NBA at $479 million last year, but fell to $360 million after a dismal season which saw the team post one of the worst records in the league. Detroit now ranks 13th on the Forbes list. New York ranked first at $655 million.
Whether this will have an effect on the sale of the team is unclear, but it sure can’t hurt front-runner Tom Gores’ chances. Gores was awarded an exclusive 30-day window to buy the team on Jan. 7. Previously, Red Wings and Tigers owner Mike Ilitch had been granted a 30-day window back in October, but lowered his bid once he saw the Pistons’ declining value.
The Detroit News' early morning report has been corroborated by a Detroit Free Press report this afternoon, but they've also added that Tom Gores has an exclusive window to buy the Pistons:
The Detroit Pistons have agreed this week to designate Tom Gores, a Michigan native and billionaire CEO of the Platinum Equity Group in Los Angeles, as the preferred bidder to buy the NBA team and an affiliate, Palace Sports & Entertainment, the Free Press has learned.
Gores has an exclusive 30-day period to finalize a purchase deal, people familiar with the matter said. It could happen as early as next week.
Barring a hiccup similar to what happened with Ilitch in November, when he had a 30-day window to buy the team, Gores will be the Pistons' new owner.
Current Pistons owner Karen Davidson would only speak on the weather, but The Detroit News' Greg Kuppa and Vincent Goodwill teamed up to drop a cluster bomb report on the current state of the Detroit Pistons sale. They're relaying that the Pistons' 'For Sale' sign could come down as early as next week with... Tom Gores as the new team owner:
Sources close to the sale said this week Gores, the billionaire financier from Beverly Hills, Calif., who grew up in Flint and attended Michigan State, remains the leading bidder for the team and for Palace Sports & Entertainment. Moreover, he is now presumed to be the bidder who will emerge as the owner.
His position is so pre-eminent that Gores could close a deal as soon as next week, according to one source familiar with the process. Others say while that may overstate how quickly a deal can be done, the Pistons nonetheless would like to have an agreement in place to present to the NBA board of governors Feb. 18-21 in Los Angeles.
I've got more of my opinion on it at Detroit Bad Boys, SB Nation's Detroit Pistons blog, but this is undoubtedly good news for the Pistons. While Ilitch would have been nice, Gores seems to be genuinely interested in owning a NBA franchise and has proven over the years to be a very successful businessman. I'd say Ilitch was most people's 1a option, but Gores is a worthy 1b candidate to own the team. At this point, the sale just needs to happen, so the franchise can move on in the right direction and not in limbo.
We'll keep you posted as this develops further.
Flint native Tom Gores was courtside on Tuesday as he watched his home state Detroit Pistons get pasted by the Los Angeles Lakers, 108-83. Gores is a potential suitor to buy the Pistons from current owner Karen Davidson, and revealed that he does still want to own the team.
“I can’t tell you anything about that (the sale),” he said, “but I can tell you that I’m a big fan, and would I love to own the team? Absolutely.”
At least someone is enthusiastic about the Pistons; Tuesday’s loss dropped the team to an abysmal 11-24. Surprisingly, that’s not bad enough for last place in the Central Division, as the 8-26 Cleveland Cavaliers are finding out that LeBron James guy was pretty important.
Gores is worth an estimated $2.2 billion, so he certainly has the cash to buy the team. However, after the deal with Red Wings and Tigers owner Mike Ilitch blew up, there’s no telling how much the team is actually worth.
Forbes.com blogger Mike Ozanian allegedly found out why Red Wings and Tigers owner Mike Ilitch didn’t buy the Pistons last month. Ozanian said a “source close to the negotiations” gave him the lowdown on what’s going on with this ridiculous drama:
According to one person familiar with the negotiations, after agreeing to a price in excess of $400 million (my source was not more specific), Ilitch discovered the revenues presented in the prospectus were inflated. Ilitch, one of the great gentleman owners in sports, got pissed, lowered his offer price and the deal quickly blew up.
Pistons owner Karen Davidson reopened the bidding after Ilitch’s 30-day exclusive bargaining window ended last month. Nobody’s quite sure what the hell is going on now, but if this turns out true it would explain why a seemingly sure thing fell apart so quickly. According to Ozanian, the whole ordeal may end up with Davidson getting less than she’s hoping for:
But from what I am hearing it will now be hard for Davidson to get $400 million for the team given the Ilitch debacle and dismal state of Detroit’s economy.
Sit back and relax folks. This one looks like it’s gonna take awhile.
Karen Davidson originally intended to have the sale completed before the season commenced. The negotiations would extend into November, but all early signs pointed to Mike Ilitch purchasing his third Detroit professional franchise. Not long after Ilitch said he he was getting close to completing the sale, Davidson re-opened discussions with other interested parties in what seemed initially like a negotiating tactic. However, things have only gotten murkier and there's really no telling who's going to come out on top of this whole ordeal. And, as a result, the sale will only continue to drag on:
The Pistons are unlikely to be sold until at least February, the firm handling the sale for Karen Davidson has informed potential buyers.
Citibank, which was hired by the widow of the late owner of the Pistons, Bill Davidson, to represent the franchise for the sale, informed potential buyers last week that the deal is unlikely to be completed until the NBA All-Star Game. The advisory to the potential buyers was confirmed by sources close to the deal
I still think the Ilitch name will be wind up owning the Pistons, but Davidson (and Citibank) is clearly content with delaying the process until a fair deal can be completely hashed out.
A month ago, the Pistons sale was moving toward completion and it appeared as though Mike Ilitch would be in place as the team's owner by this time. NBA commissioner David Stern was hoping for the sale to be done by the end of November, and early in the month Ilitch actually said that they were getting close.
Shortly after Ilitch's comments, however, reports came out that the exclusive bidding period had ended and negotiations for the team had been reopened to everybody. Although the leak of this information could have been viewed as a negotiating ploy to counter Ilitch's reported lowering of his bid, there hadn't been any update on the sale in weeks before Thursday.
On Thursday, The National, a paper in the United Arab Emirates, reported that "investment groups in Abu Dhabi, Dubai and Qatar are in separate discussions to buy the Detroit Pistons." The report attributed this news to Stern, who allegedly said negotiations are "ongoing" for groups in the Middle East to potentially purchase the team.
"The interest and discussions have taken place in reference to Dubai, Abu Dhabi and Qatar. There is more than one discussion," Mr Stern said.
"That is a team that has been, and is having negotiations with different potential investors," he added, declining to name the parties involved.
Shortly after this came out, the NBA released a statement refuting The National's report despite the fact that it was based on comments made by Stern.
"There has been interest in league franchises from various investors in Qatar, Abu Dhabi and Dubai, but (the NBA refutes) a report that specific negotiations are ongoing for a potential sale of the Pistons to a group from the Middle East."
At the very least, this statement from the NBA confirms that the Pistons have drawn interest from investment groups in the Middle East, which had been reported in the summer. What does this mean for the sale now? Well, talking with groups from the Middle East could easily just be part of the process of driving the value of the franchise up before the sale is complete, but it also could be another sign that Karen Davidson and Ilitch aren't really all that close to making a deal happen. More evidence of the latter comes from The Detroit News, which reports that Tom Gores is in the lead as far as the bidding goes. Gores has maintained his interest in buying the team throughout the past months and again reaffirmed his hope of purchasing the team via a spokeswoman.
Earlier this week, Mike Ilitch spoke to the media about the sale of the Detroit Pistons. Although he didn't exactly get into too much detail, he said that things were getting close, indicating a deal to buy the team would be complete soon. As it turns out, however, things may not be as close as they once appeared.
On Thursday, Sports Business Daily reported that Ilitch's exclusive negotiating period with Karen Davidson had ended and that negotiations "had bogged down over price and financing." What's more, the report stated that "previous bidders were being contacted about any ongoing interest they might have." Ilitch is still considered the front-runner in this sale, per the report, but he no longer has an exclusive negotiating agreement.
So what should we make of this news? On the surface the impression given off is that things are cooling between Davidson and Ilitch and the sale isn't moving forward. That's not necessarily what has happened, though. This could simply be a negotiating technique, which seems very possible based on The Detroit News' report on this story:
A source with knowledge of the negotiations said while the Ilitches were originally the highest bidder, they reduced the offer. Davidson and Citibank then decided to reopen the process to allow other bidders to negotiate again.
Speculation suggests that all of this could just be part of the negotiating process as it moves forward. Ilitch reportedly lowered his offer and Davidson responded by contacting previous bidders to see if they were still interested in purchasing the team.
One of those previous bidders is Tom Gores, who attended Friday night's Pistons-Clippers game at the Staples Center. He sat next to Clippers owner Donald Sterling, who said that Gores "wants to buy the Pistons." Gores declined to comment about the sale of the Pistons, but he did say this:
Gores was asked about the status of the Pistons sale and he said: "I can't tell you anything about that, but I can tell you that I'm a big fan and would I love to own the team? Absolutely.
"I will tell you this. I think Mike Ilitch has been great to the Detroit community. If he's able to buy the Pistons, then I'd love to be talking to Mike.
NBA commissioner David Stern hoped that the sale of the Pistons would move toward being completed sometime this month. While this recent news could mean that things are moving backward, it could also mean that the negotiations are progressing. Much of this does seem like a negotiating technique, but I guess we will just have to wait and see how things play out.
Mike Ilitch, the owner of the Tigers and Red Wings, spoke about the sale of the today while in Toronto for the induction of Jimmy Devellano into the Hockey Hall of Fame. Ilitch didn't discuss a whole lot about the progress of the sale, but he did say, "We're getting close." There has been speculation that the sale would move forward drastically this month, and based on Ilitch's comment today, it seems things are moving in that direction.
Ilitch was also asked about the future of the Pistons' current home, The Palace of Auburn Hills. Once again, he declined to discuss the situation in detail, but he did make it clear what his future intentions are for where the Pistons and the Red Wings will play.
When asked whether the Wings could play at the Palace in Auburn Hills, Ilitch said: "Well, I don’t want to get into all that. We’re going to build a stadium in Detroit. ... I want two teams in one building. So that’s all I can tell you."
It seems to be only a matter of time until this sale is complete. When it is, Mike Ilitch will have control of three of Detroit's four professional sports franchises.
The media was able to reach out to the Pistons current owner, Karen Davidson, before Friday night's home opener against the Oklahoma City Thunder, regarding the sale of the team. Davidson said she's keeping mum:
Detroit Pistons owner Karen Davidson says she has no comment on the pending sale of the team and won't have anything to say publicly when the deal is done.
"I'm going to hand over the keys and walk away," Davidson said.
As we've said, the sale is expected to go down in November. When it happens, Mrs. Davidson plans to whisk away into the night.
Johnson told the Los Angeles Times that Detroit Tigers and Detroit Red Wings owner Mike Ilitch has reached out to him about being part of the ownership group that would buy the Detroit Pistons. However, Johnson has yet to talk directly to Ilitch about any such opportunity.
“I talked with Golden State. I will talk with [Ilitch about] Detroit,” Johnson said. “Just because you talk, that doesn’t mean you are going to do a deal. But I’ll be looking at every opportunity because I’m a businessman and that’s what I do. I look at deals every day.”
Johnson has also expressed strong interest in being part of any effort that would bring a NFL team back to Los Angeles. He also recently met with the group that is purchasing the NBA’s Golden State Warriors, but those talks went nowhere.
Today, David Stern relayed that he received an update on the progress of the sale of the Detroit Pistons. Stern said that he hopes the sale will "move its way along" and that he is "looking for something definitive to happen in the month of November." Why November? Stern explains:
Asked why he expected next steps in November, Stern replied "there's an exclusive negotiating period being undertaken. My guess is that it's going to expire in about 10 days. There's a lot of work going on. I would think that gets to be about November 1. Then with the to and fro, by the end of November, I would hope there would be a formal agreement that would mature. ... There seem to be an interested potential buyer, an interested seller. They're doing lots of due diligence, lots of interviews, examination of documents. In a normal course, it sounds like the 45 days or so, 40 days, is a good time to think that there would be a successful agreement."
Originally the hope was that the Pistons would be sold before the start of the season. Considering the season starts in less than a week, though, it obviously isn't expected to happen. Even so, if the sale can continue moving forward in the coming weeks and start to move closer to completion in November, it would be a good thing for the franchise and everybody involved.
Tom Wilson, who previously worked for Palace Sports & Entertainment before taking a job with Mike Ilitch, recently talked a bit about what a new arena in Detroit would likely include. He didn't get into too much detail about the possible future arena (or the sale of the Pistons to the Ilitches), but he did mention that one of the focuses would be on technology.
Wilson did not break any news in his remarks, but his musings on what a new arena would be like hinted that a new downtown arena could set a standard much as the Davidson-owned Palace of Auburn Hills did when it opened in the 1980s.
Noting that fans today can get more replays from an iPhone app than from an arena screen, Wilson said, "You have to put a lot of technology in and anticipate what people are going to want." He added, "I think you’re going to see an awful lot more technology in a new building."
Many of the arenas in the NBA and NHL today are based largely on The Palace. Going forward, however, there is a definite need to start moving in a new direction technology-wise. Yes, all of the new arenas today feature lots of flat-screen TVs and a large HD videoboard, but there is a lot of room to get creative with technology. Based on what Wilson said, it sounds like a new Detroit arena would do just that, bringing lots of technology to the likely future home of the Red Wings and Pistons.
In news that may be completely irrelevant -- but probably worth noting given his comments in August about wanting to join the group who buys the Pistons -- Magic Johnson has sold his stake in the Lakers. If that's any indication of things to come, that's certainly the first step to moving on elsewhere as an NBA higher up.
What does this mean? Well, moving up in the NBA executive ranks could mean getting involved with Ilitch in buying the Pistons. Johnson said in August that he wouldn't be the head honcho, that that would have to be somebody like Ilitch and he would entertain the idea of joining forces with him if it was presented. As of then, he hadn't been in contact with the Pistons or Ilitch about the possibility. However, Johnson also recently said that he wants a bigger role in team ownership a la Michael Jordan in Charlotte, "as one of or the main faces of the franchise." The two statements seem to be kind of contradicting, although Magic Johnson back in Michigan would make him a relatively main face anyway, even if he only owned a small percentage of the team.
For what it's worth, the five percent share he had in the Lakers was reportedly worth around $28 million. That's about six percent of the latest going rate for the Pistons. Hey, it's a larger 'role.'
As soon as it was announced that the Detroit Pistons were for sale, speculation immediately pointed to Mike Ilitch as a potential buyer. Ilitch’s status as owner of the Red Wings and Tigers made him a natural choice, but the defection of former Pistons CEO Tom Wilson to Ilitch Holdings, Inc. further fueled such conjecture.
Other potential buyers were mentioned, with California businessman Tom Gores rumored to be a front-runner for a purchase, but it appears that the initial speculation may have had it right all along.
Crain’s Detroit Business is reporting that current majority owner Karen Davidson and Palace Entertainment has entered negotations with the Ilitch organization for the sale of the Pistons and Palace Sports & Entertainment. The deal is expected to be completed within the next 30 days.
Forbes has the Pistons valued at $475 million. Bill Davidson purchased the team for $8 million back in 1974.
UPDATE: Davidson told the Detroit Free Press that the sale is "progressing very well" and expects a deal done by October 27.
I touched on Tom Gores and his business background in my feature of the four potential Pistons buyers back in August, but I'll provide a little more detail from Crain's Detroit Business.
Gores is an Israeli-born immigrant, who graduated from Michigan State in 1968 with a construction management degree. He is now the chairman and CEO of a California-based private-equity investment firm, Platinum Equity LLC. He is listed in Forbes as the 147th richest-American at $2.2 billion and his company is reported to bring in anywhere from $8-12 billion annually in revenue.
He has made hundreds of successful business deals worldwide and is always looking for his next quality investment. He's a shrewd businessman, but his desire to buy the Pistons isn't solely business:
"I grew up (in Michigan). I love living in L.A.; but at the heart of it, I'm a Michigan man at the end of the day," he said.
Gores bid to buy the Pistons isn't the first time he's been interested in a pro sports franchise, though:
Platinum signed a nonbinding agreement in October 2008 with the Arena Football League to invest $100 million to buy 40 percent of the league, but the firm pulled out when the due-diligence process revealed heavier than expected operating losses.
Gores is probably best known in Michigan for his failed bid to purchase the bankrupt Delphi. In the end, Gores was turned down because the former GM parts unit felt they were being undervalued:
"It was a big disappointment for me. We put our heart and soul into it for about three years," Gores said. "(But) I sleep better at night knowing we were a very positive influence on the situation. We woke (the creditors) up and they said, "Geez, we should have been the owner.' "
In 2009, Mergers and Acquisitions Journal magazine made Gores a cover boy as a "Pro of the Year."
And being on the cover of a magazine is somewhat fitting of Gores, who is very stylish and his perma-cocked head in all his professional shots is already garnering a lot of talk over at Detroit Bad Boys.
If Gores is in fact the Pistons' next owner, he'll not only be one of the "cooler" owners, but he also plans to be very active. But not quite Mark Cuban active:
If he becomes the Pistons' owner, Gores said his style would be hands-on, but not to the point of a Mark Cuban, the brashly outspoken (and often-fined) owner of the Dallas Mavericks.
"I'm not looking to be a Mark Cuban. Let's say active, but not that active," Gores said during a telephone interview with Crain's.
A hands-on owner with Gores' CV is something Pistons fans can get legitimately excited about. Gores demands success and he's proved he can achieve it. If the team is going to be sold soon before the season starts, as Mrs. Davidson intends, one has to believe that Gores is the front-runner. After all, it was reported over a month ago that's exactly what he is. We'll know soon enough.
Detroit Pistons owner Karen Davidson says the sale of the team is going well and a new owner could be in place by the start of the NBA season.
Davidson didn't provide any great sound bites during an event with Pistons forward Jonas Jerebko to purchase supplies for Oakland County Schools, keeping her answers mostly to "yes."
Basically, the sale is progressing and there is a "front-runner" to buy the team. Detroit opens the season on Oct. 27, so for Davidson to say the sale could be done by then is a pretty good indication she has an idea who she wants to sell to. The speculation I'll leave up to you.
Ever since Mike Ilitch made it known that he would like to purchase the Detroit Pistons, I think it's safe to say that most have simply assumed that is what would happen. After all, when Ilitch sets his sights on something, he usually gets it, and a new marriage between the Ilitches and another Detroit sports franchise just makes sense.
The problem with simply assuming that the Pistons are Ilitch's team to lose is that they aren't. In fact, according to The Detroit News, Flint-area native and Michigan State graduate Tom Gores is actually the current favorite to buy the team right now.
Flint native Tom Gores has emerged as the "front-runner" to become the Pistons' new owner, according to sources close to the situation. [...]
Gores, 46, and his group have made two visits to The Palace the past two weeks, the only interested group to do so. Gores made another visit Wednesday, but has not yet made a bid.
Gores, who owns Platinum Equity, went to Michigan State and sold computer software before moving to California to go into business with his older brother, Alec. He owns a home in Grosse Ile. According to Forbes, Gores is worth $2.2 billion, making him the 147th-richest American.
For me, I want the Pistons' new owner to be someone with local ties and someone who has a legitimate interest (and knowledge) of sports. Gores fulfills both of those things, as he grew up in this state and still has a home here, and he definitely is a sports fan based on reading the profile of him in The News' article. While I would like to see Ilitch get the team just because he has a proven track record for success, Gores doesn't seem like a bad alternate option by any means.
How much the Pistons are worth varies depending on who you ask. Forbes, for examples, values the franchise at $479 million, whereas some analysts think they are worth less than $400 million due to the state of the economy. Citibank, however, is reportedly asking for even more than that from potential buyers.
The bank hired to broker a sale of the Detroit Pistons and Palace Sports & Entertainment Inc. is seeking $500 million from potential buyers — a price industry insiders and likely bidders consider inflated by $100 million in this market, a source familiar with the situation said.
This same source told Crain's Detroit Business that Mike Ilitch "likely would pay less than $400 million" for both the Pistons and Palace Sports & Entertainment. While many seem to believe that is a possibility, the one thing that could drive up the price is if a couple prospective owners get into a bidding war over the team. With at least four potential buyers out there right now, that is one thing to consider going forward.
The Detroit Free Press is reporting that four people or groups of people have emerged as possible future owners of the Pistons.
The Free Press has identified four potential buyers of the Pistons: [Tom] Gores, who grew up near Flint, graduated from Michigan State, lives in Los Angeles and maintains a residence in Grosse Ile; Mike Ilitch, who owns the Red Wings and Tigers and who announced his intentions last week; George Postolos, a former NBA and Houston Rockets executive who e-mailed last week that he was "bullish" on the Pistons and PS&E, and a foreign group based in Dubai, which has interest in other franchises, too. Postolos and the Dubai group met with the Pistons last week.
As the quote says, Postolos and the group from Dubai have already met with the Pistons, and it has been reported that a group representing Gores met a second time with officials from Palace Sports & Entertainment on Wednesday.
It doesn't appear that any of the four potential buyers has emerged as a favorite to own the team yet, but things are definitely moving quicker this month. Just a couple weeks ago it seemed like there was very little interest in the team, but as soon as Mike Ilitch announced his intentions, business has picked up. Now there are four potential known buyers, confirming the statement released by the Pistons and Citigroup last week.
"The Davidson family and its constituents, working together with Palace Sports & Entertainment (PSE) management and Citi Private Bank, have instituted a robust process that is well under way. We are extremely pleased at the level of serious interest from multiple potential buyers in purchasing the Pistons and PSE. We will proceed with the best interests of the Davidson family, the Pistons, and PSE. At this time, we plan no further comment."
The original hope was for the Pistons to be sold before the start of the season, and although that would require things to happen very quickly over the next month or two, it's certainly possible that things could get moving quickly enough for that to happen. It's not necessarily likely, but with the way this process has picked up speed lately, I wouldn't rule it out.
A few people have expressed interest in buying the Pistons over the last couple of weeks, but one person who has no interest is Compuware CEO Peter Karmanos. The Detroiter owns the OHL's Plymouth Whalers and the NHL's Carolina Hurricanes, but he does not have any interest in adding a basketball team to the list.
"No," Karmanos said, laughing. "I don't like basketball. And I especially don't like their Collective Bargaining Agreement. They're going to have to do some hard work around that sport to get it back in line where it's reasonable to own a team. ... Even with some decent TV contracts, they're just bleeding red ink as a league."
Karmanos did talk a bit about the "conundrum," as he called it, with the arena situation for the Red Wings and Pistons.
Said Karmanos: "I've looked at this whole Pistons and Red Wings and Joe Louis Arena and The Palace situation, and it's a real conundrum, because a lot of the Pistons' value is tied up in The Palace. But The Palace could end up being a white elephant like the Silverdome is, except that the team owns the building."
Karmanos is correct in saying that this is a conundrum, because there doesn't appear to be a solution that will please everybody right now. If the Pistons are moved to Detroit, then you have an empty arena that is still more than functional sitting in Auburn Hills, but at the same time, a new arena isn't going to be cheap and the Joe is only going to last so long. Making things even more problematic, as Karmanos went on to say, is that the Red Wings can't be moved out of Detroit, as that could alienate its downriver and Canadian fan base.
His dislike for basketball aside, I'm sure Karmanos is glad to not be in Mike Ilitch's shoes, as purchasing the Pistons will definitely force some tough decisions to be made.
NBA Hall-of-Famer Magic Johnson, who hails from Lansing, MI, told Scott Howard-Cooper of NBA.com today that he’s interested in buying the Detroit Pistons. From Howard-Cooper’s Twitter account:
Magic Johnson tells NBA.com he is interested in being part of a group that buys the Pistons or joining the front office. Link to follow.less than a minute ago via TweetDeckScott Howard-Cooper
Johnson currently owns a minority stake in the L.A. Lakers and would have to give that up to take any position with the Pistons.
UPDATE: Johnson's comments to NBA.com's Scott Howard-Cooper (via Detroit Bad Boys):
Johnson stressed he has not had any formal talks about either possibility, with other potential suitors or the Davidson family that put the team on the market, and that he would not be a majority owner because it would mean relocating from Los Angeles, the very reason some close to him note the Pistons are not a realistic match. But Johnson told NBA.com at the press conference leading up to Hall of Fame ceremonies tonight that "some people had called me and wanted me to [know] if I'm interested in being a part of a group to own the Pistons." [...]
[...] "Somebody back there has to be the majority owner. Be the owner," said Johnson, who would have to sell his interest in the Lakers to work for or own another team.. "That wouldn't be me. But if Ilitch or somebody -- you've got a good guy back there already in Joe Dumars. If somebody said, 'Hey, can you come and think about helping Joe Dumars?' then I would think about it.
According to the Detroit Free Press, Red Wings and Tigers owner Mike Ilitch has notified the Pistons that he'd like to purchase the team (which will most likely come with all of Palace Sports & Entertainment):
Sports and pizza boss Michael Ilitch said today he wants to buy the Detroit Pistons basketball team and move them to a new arena in downtown Detroit.
The following is from Ilitch himself, although it mentions nothing of moving the team (via MLIVE):
"Marian and I grew up here, we raised our family here and we built our businesses here. Detroit is our home. When I read in the paper there was the chance that this great sports town could lose one of its professional sports franchises, I just didn't see how we could let that happen. The Pistons, just like the Red Wings, Tigers and the Lions, have a rich and storied tradition in this community and they've brought pride to fans and our community. You all know I love sports – all sports, from amateur sports to the various pro sports we've had the privilege to be involved with, and like a lot of others I'm sure, I really want to see the Pistons remain the Detroit Pistons."
"We talked about it internally and when you take our 33 years of experience in professional sports, our commitment to this community, our passion for winning and pursuing championships, and you couple that with the opportunity to have a local, engaged owner for the Pistons, we decided to take a run at it. We believe we could bring a lot to the table that could be tremendously positive for the Pistons franchise, the NBA, and the fans of this community. So, today, we formally notified the Detroit Pistons that we have interest in purchasing the team. This is a required first-step and we look forward to the opportunity to move forward in the process."
This is (should be) very exciting news for Pistons fans, so stay tuned.
UPDATE: More from Ilitch's statement is below.
“No one should get too excited just yet, because this is the first step in what could be a long process,” the Ilitch statement read. “There is a lot of due diligence to take place, and who even knows if the Pistons would accept any potential future offer.
“But I can tell you that we are serious about this, we’ll be aggressive in the process, and we’re going to take a real hard run at it because it makes sense for our organization.”
The statement added, “Whether or not we end up buying this Piston team, we remain focused on a new arena in the city of Detroit, and that will serve as a great catalyst for future economic development in the city.”
Although Karen Davidson has made it known that she would like to sell the Pistons before the start of next season, right now it doesn't seem all that likely. Aside from the fact that there are labor issues in the NBA and the market itself isn't doing well, it's not a good sign that there seems to be so little interest in the team right now, according to one person in the know.
One businessman frequently involved on the side of both sellers and buyers of NBA franchises said the fact that he has not heard of a single legitimate purchaser, at this stage, is not a good sign.
"I certainly would have heard, or someone I know certainly would have heard, by now," said the consultant, who asked not to be named because of his frequent involvement in NBA deals. "The fact that no one has heard means that bid deadlines have probably come and gone without a significant offer."
If this apparent lack of interest continues, it's possible that Davidson will have to decide to sell the team for a lower asking price than she hoped. Then again, the thing that complicates this sale the most is the fact that the Pistons are simply one piece of the for-sale Palace Sports & Entertainment, so chances are that will have a big effect on the sale of the team itself.
On Wednesday, the Las Vegas Sun reported that an NBA team is "under contract" with an investment group that has plans to move the team to Las Vegas. The plan is contingent on a few things, including approval for the building of a new arena in Las Vegas. The team involved in this supposed deal was unnamed, but that didn't stop speculation about the Pistons being the mystery franchise since they are for sale.
With speculation getting a bit out of control on Wednesday, both the NBA and Pistons released a statement on Thursday to clear things up a bit.
The NBA flat out denied the story.
“We categorically deny that there is an NBA team under contract,” NBA spokesman Tim Frank told the Free Press today.
The Pistons obviously can't speak for what other teams are doing, but they made it clear that this investment group is not involved with them and there are no plans for the team to move.
"While there is no substantive news to report regarding the sale of the Detroit Pistons, our ownership group has absolutely nothing to do with any proposal that would move the team to Las Vegas," the statement read. "As stated since the beginning of this process, the preference is to find an ownership group that is committed to Detroit and the surrounding area."
Considering there seems to be quite a few local people/investment groups interested in buying the Pistons, I wouldn't be too concerned about the possibility of losing the team just yet. Now, if some out-of-towner comes in and buys the team, then I would worry a bit just because you don't know how committed he would be to keeping the team in Michigan. Anybody local, however, would undoubtedly have no plans for the Pistons to move unless it was to downtown Detroit, and even then that would probably only happen if the Ilitches were involved in buying the team. Basically, the chances of the Pistons leaving Auburn Hills anytime soon is not likely.
The one unknown in all of this talk about the sale of the Pistons is what the Ilitches' interest is in the franchise. There have been reports that Mike Ilitch isn't an NBA fan and wouldn't be all that interested in buying the team, but at the same time, other rumors have suggested that buying the Pistons is in the cards because it would give the Ilitches control of rival Palace Sports & Entertainment and allow for a new downtown Detroit arena to be built. So far nothing substantial has been reported either way, but this tidbit from a Crain's Detroit Business article is very interesting:
Sam Simon, president and chairman of Taylor-based fuel distributor Atlas Oil Co., is the latest name thought to be interested in the Detroit Pistons.
Sources familiar with the situation told Crain's that Simon would be part of an investment consortium led by Detroit's Mike and Marian Ilitch, the Little Caesars Enterprises Inc. pizza founders who also own the Detroit Tigers and the Detroit Red Wings.
This is also very interesting:
In a legal squabble that erupted this month between Ilitch-owned Olympia Entertainment Inc. and Palace Sports over documents taken by former PS&E employees who left to work with Wilson, it was noted that Wilson had approached Davidson on behalf of the Ilitches about buying the Pistons and the entertainment company.
I've long thought that Tom Wilson's hire was more about getting a new arena for the Red Wings built, but perhaps it does have something to do with buying the Pistons as well. I didn't think the Ilitches were all that interested in them, but perhaps the fact that this is about more than just the Pistons (all of Palace Sports & Entertainment is for sale) is why they could end up owning three Detroit teams.
Some other names reported to possibly be interested in buying the Pistons include former Cavaliers minority owner David Katzman and Rochester businessman Andy Appleby.
Karen Davidson, the current owner of the Pistons, briefly spoke about the future of the franchise yesterday, saying that it is expected to be sold by late October. In other words, a new owner is expected to be in place before the start of the 2010-11 season, which would give the franchise some stability before tipping off the new slate of games.
Davidson also called the Pistons a "premier franchise" and said Joe Dumars is not facing any financial restrictions this summer. That is important because often times when a franchise is in limbo, general managers will be forced to deal with a cap on spending. The Texas Rangers, for example, are very much in limbo right now, and although their situation is a bit more complex than the Pistons', it may be tough for them to make any big moves at the trading deadline because of their up-in-the-air status.
For the Pistons, it seems that there is a decent amount of interest in the team. However, the question becomes whether or not that interest will translate into a sale that gives Davidson what she is looking for. She probably isn't going to just unload the team to the first respectable bid, so it will be interesting to see how this develops over the summer and in the months leading up to the season.
The Detroit Pistons ownership crisis may be coming to an end.
Karen Davidson, the widow of former owner William Davidson has hired Citi Private Bank Sports Advisory to advise the sale of the team to a new owner.
The Pistons have been in limbo ever since Davidson's death in 2009. Karen Davidson has made no secret about her desire to sell the team, and this is the first official step toward doing so.
There are no known front runners for buying the team as of right now, but there has been plenty of speculation. At the top of the list is current Red Wings and Tigers owner Mike Ilitch, who also owns the Little Caesars Pizza chain. With the Red Wings looking for a new arena, Ilitch may be interested in buying the Pistons and building a new arena for both teams.
Other rumored suitors have included Compuware CEO Peter Karmanos, who also owns the Carolina Hurricanes, and Cleveland Cavaliers owner Dan Gilbert.
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