Billionaire philanthropist Antony Ressler leads a group that has reached an agreement to purchase the Atlanta Hawks and Philips Arena for an amount believed to be less than $1 billion. The team announced the definitive agreement Wednesday night. The Atlanta Journal-Constitution confirmed the agreement earlier in the day.
Ressler, 55, will be the clear majority owner of the franchise. He is a co-founder of two private equity firms, Apollo Global Management and Ares Management. He is also a minority owner of the Milwaukee Brewers. According to Forbes Magazine, he is worth approximately $1.43 billion dollars.
“We are honored and thrilled to have been chosen to become the new stewards of the Hawks,” Ressler said in a statement released by the team. “We respect the NBA’s approval process and, accordingly, can say no more other than we are incredibly excited by the Hawks’ success and wish them luck in the playoffs.”
Holding smaller ownership stakes will be former NBA player Grant Hill, co-founder of Marquis Jet Jesse Itzler and his wife Sara Blakely, the founder of Spanx and Richard Schnall, according to the team. The current Atlanta ownership group, led by Michael Gearon Jr., will also retain a percentage of the franchise, the AJC has confirmed.
The NBA Board of Governors still must approve the sale.
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Ressler has begun to reach out to officials in the organization. He will work closely with Hill, who was seen at Philips Arena offices earlier this week. Hill will have a primary leadership role in the franchise.
Two other groups were considered finalists earlier this month when final bids were due. A group led by Grizzlies minority owner Steve Kaplan and a group led by Lionsgate Entertainment’s Mark Rachesky were prominently involved. However, recently Ressler replaced Rachesky and the new group worked quickly on the successful final bid.
Ressler was ranked as the 1,250th richest person in the world and No. 418 in the U.S. by Forbes. Ressler was part of a group, including Hill, that tried to buy the Los Angeles Clippers following the Donald Sterling controversy the resulted in the sale of the franchise to Steve Ballmer in August. Ressler’s group reportedly bid $1.2 billion and lost out to Baller and a $2 billion price tag.
“We are excited to welcome this new ownership group and are deeply gratified by its commitment to the Hawks and the Atlanta community,” Hawks CEO Steve Koonin said in a statement. “We are pleased that the group is committed to continue building on the franchise’s storied history and recent success.”
The office of Atlanta Mayor Kasim Reed would not comment on the pending sale.
The sale figure is believed to be about $750 million but that figure could fluctuate depending on how much debt is absorbed by the new ownership group.
“Eight hundred and fifty million is a good price for this team,” said Irwin Raij, sports attorney at the law firm Foley and Lardner. “Putting it into context, not that long ago you could buy a piece of the Hawks at an enterprise value below 400 million. Although the Atlanta media market has certain strengths, the team has a checkered level of success at the box office.
“Last year, the Milwaukee Bucks sold for a number between 500 and 600 million. The price reflects the strength of the NBA product right now and views as to what they think the market can become. This takes into account the national and local media deals and the trend of increasing NBA team valuations.”
At his press conference prior to Wednesday’s Game 2 of the Eastern Conference first-round playoff series against the Nets Wednesday, coach Mike Budenholzer said he is aware of the reports of the pending sale of the franchise but would only answer basketball-related questions.
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 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 racist 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 groups agreed to sell their shares in the franchise. The Atlanta-based group of Michael Gearon Jr. and 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 Washington- and New York-based groups will be completely out following the finalization of the sale, which has been handled by Goldman Sachs and Inner Circle Sports.
NBA Commissioner Adam Silver confirmed at the NBA All-Star Game in February that the league recently changed its rules concerning team ownership. In a rule passed by the Board of Governors, ownership groups cannot be comprised of more than 25 individuals. Also, each individual must own at least one percent of the team.
There are several issues within the organization that need to be resolved with new ownership. The status of general manager Danny Ferry remains up in the air as he has been on indefinite leave of absence since September. Ferry and Hill both played for Duke University but were two years apart. The organizational structure of the franchise could also face changes, including the role of Koonin. The three-year contract of Budenholzer, who was just named the NBA Coach of the Year, expires after next season. Budenholzer has been working with the current basketball operations staff to run the team. The Hawks also have two key unrestricted free agents this summer in Paul Millsap and DeMarre Carroll.