Lockout notwithstanding, the NBA announced Tuesday that its Board of Governors voted unanimously to approve the sale of the Philadelphia 76ers. Meanwhile, the league remains quiet on the proposed sale of the Hawks, which appears stalled in the approval process.
“Nothing new at this point,” NBA senior vice president of communications Tim Frank said by email Tuesday.
The Atlanta Spirit Group’s agreement to sell a majority stake in the Hawks, as well as the Philips Arena operating rights, to Los Angeles businessman Alex Meruelo was announced Aug. 7, contingent on approval by the NBA.
Ten weeks later, a decision on approval does not seem close at hand. A vote is not on the agenda for the league’s Board of Governors meetings Wednesday and Thursday in New York, Frank confirmed.
The Hawks will be represented at the meetings by Bruce Levenson, a member of the group attempting to sell controlling interest in the franchise to Meruelo.
The NBA’s labor dispute, which already has resulted in the cancellation of the first two weeks of the regular season, is expected to dominate the meetings.
While Meruelo and Atlanta Spirit decline to comment on the sale approval process, citing NBA rules, the Spirit’s 2004 purchase of the Hawks and Thrashers from Time Warner provides a case study of the complications than can ensnare such deals, particularly when money-losing franchises are involved.
As a condition of approval in 2004, the NBA and NHL required several Spirit partners to put up tens of millions of dollars in personal financial guarantees to ensure liquidity to guard against potential future team losses. The buyers eventually satisfied the requirement, but doing so forced a complex reworking of the deal.
The 76ers were sold by Comcast-Spectacor to a group led by private-equity billionaire Joshua Harris. The completion of that transaction leaves the Hawks as the only NBA team awaiting league action on a proposed sale.
If the sale is approved, the Hawks’ current ownership group would retain a sizable minority stake for at least a period of time, believed to be five or six years. But Meruelo would control all ownership decisions and be responsible for any financial losses.
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