Deadline for Atlanta Hawks sale is approaching.
Photo: Kevin C. Cox
Photo: Kevin C. Cox

Front-runners emerging in Hawks ownership bid

Two front-runners for ownership of the Hawks are emerging as the lengthy process to sell the franchise and Philips Arena continues into its seventh month.

There is a deadline of April 10 for final bids. However, that date could be moved, as one or more bids are still being considered.

Several people with knowledge of the situation told The Atlanta Journal-Constitution that two groups are considered finalists. Current Hawks ownership and prospective buyers have signed non-disclosure agreements that prevent them from speaking publicly on the sales process.

One leading group is led by Grizzlies minority owner Steve Kaplan, who is joined by Indonesian billionaires Erick Thohir and Handy Poernomo and former Grizzlies CEO Jason Levien. Braves great Hank Aaron also has been associated with the group.

The other leading group is led by Lionsgate Entertainment’s Mark Rachesky, who is joined by New York investment banker Steve Starker. Jesse Itzler, who has done consulting work for the Hawks and attends many games, is also associated with the group. He is married to Spanx founder Sara Blakely.

The Hawks hired Goldman Sachs and Inner Circle Sports to handle the sales process. Interested groups have had meetings in Atlanta after preliminary bids were due Feb. 24.

At least one group considers itself out of the running after having no contact with the search firms for some time.

The entire process may take until June to complete. The sales process began in September when controlling owner Bruce Levenson announced his intention to sell his stake as part of a firestorm of controversy that engulfed the franchise.

The Hawks have clinched the top seed in the Eastern Conference are a poised for what could be a lengthy playoff run. It’s possible, should the Hawks go on to win the NBA championship, that Commissioner Adam Silver could hand the Larry O’Brien trophy to current ownership.

“It’s amazing how long this has taken,” one person familiar with the situation said.

At least one of the prospective ownership groups has concerns with Philips Arena, according to a person familiar with the situation. The group feels the team’s practice facility is subpar and could be a hindrance in attracting free agents. The weight-room facilities also are considered below NBA standards, and the group has expressed a concern over the setup of the arena luxury boxes.

The Washington-based group, led by Levenson, announced that it would sell its 50.1 percent stake following the discovery of a racially inflammatory email. An independent investigation discovered an e-mail Levenson wrote in 2012 that included remarks about the fan base and game operations. Levenson’s partners Ed Peskowitz and Todd Foreman are also stakeholders in the original group known as the Atlanta Spirit.

Several months later, the remaining ownership partners agreed to sell their shares in the franchise. The Atlanta-based group of Michael Gearon Jr. and Michael Gearon Sr., Rutherford Seydel and Beau Turner will sell their combined 32.3 percent of the franchise. In addition, the New York-based group, led by Steven Price, has agreed to sell its 17.6 percent stake.

The organization has also been operating with general manager Danny Ferry on an indefinite leave of absence. The independent investigation that discovered Levenson’s email was conducted after Ferry made a racially insensitive remark about free-agent target Luol Deng in a June conference call with ownership and management.

The Hawks issue surfaced just months after the NBA had to deal with racist comments made by Los Angeles Clippers owner Donald Sterling. He was forced to sell the franchise, which sold to Steve Ballmer in August for a reported $2 billion. The Milwaukee Bucks were sold last April for a reported $550 million. The Hawks and Philips Arena are expected to be sold for upward of $800 million.

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Staff writer Scott J. Trubey contributed to this article.