Two months after Los Angeles businessman Alex Meruelo’s deal to buy the Hawks was announced, he continues to await the NBA’s decision on whether to approve the transaction.
The NBA approval process, which typically moves slowly, might be further decelerated in this case by the league’s more pressing business: a labor dispute that threatens the start of the season.
A 75-percent vote of the league’s Board of Governors is required to ratify a team sale, but the vote — not yet scheduled — comes at the end of a lengthy process. The league declined to say how far along the Hawks matter has gotten.
“All I would say to this is that the review process is ongoing,” NBA senior vice president of communications Tim Frank said.
Meruelo declined comment on the approval process through a spokesman, citing NBA rules.
Meruelo’s agreement to buy a majority stake in the Hawks, as well as the Philips Arena operating rights, from current owner Atlanta Spirit Group was announced Aug. 7. In the two months since, Meruelo has made several trips to Atlanta, acclimating himself to the city.
“When Alex made the announcement he was purchasing the team, pending NBA approval, he said he wants to be a part of this community,” Meruelo Group spokesman Ruben Gonzalez said. “And so he is proving it, meeting with business leaders, community leaders and elected officials. He is making an effort to follow through and really be an excited and involved member of the Atlanta community.”
Meruelo has had introductory meetings with Georgia Gov. Nathan Deal and Atlanta Mayor Kasim Reed. He attended a reception with Hawks sponsors and another reception held by The Latin American Chamber of Commerce of Georgia. On his most recent visit to Atlanta, he attended last weekend’s Latin Fever Ball, an annual black-tie gala held during Hispanic Heritage Month.
If the sale is approved, Meruelo would become the first Hispanic majority owner of an NBA franchise. The Hawks’ current ownership group, including Bruce Levenson, Ed Peskowitz and Michael Gearon Jr., would retain a sizable minority stake for at least a period of time, believed to be five or six years. Meruelo would control ownership decisions and be responsible for any financial losses.
The NBA approval process typically includes extensive vetting of a prospective owner, a meeting between the buyer and a committee of league owners (which is not believed to have occurred yet with Meruelo), and the negotiation of an “undertaking agreement” that spells out the buyer’s commitments and obligations to the league.
The process can get complicated. When Atlanta Spirit bought the Hawks and Thrashers in 2004, the sale was stalled for months as the leagues — particularly the NHL — sought tens of millions of dollars in personal financial guarantees from the buyers to cover potential future losses.
The NBA doesn’t put a timetable on the approval process. The 2010 sale of the Charlotte Bobcats to Michael Jordan was approved less than a month after a proposed deal was announced, but it’s more typical for the process to take several months or longer.
The Hawks’ current owners and management already have brought Meruelo into the loop on major issues, although there haven’t been many such matters with the NBA in a lockout and no player-personnel moves permitted.
Bob Williams, the president of the Hawks and Philips Arena, continues to run the organization. Hawks fans received a letter this week, signed by Williams, updating them on lockout developments. Such a letter might have been signed by one or more of the owners in the past.
