Boston Celtics Sold for Record Price

The financing, circumstances, and meaning of this deal are all very telling - let's break them down.

In what is the most expensive purchase of a professional sports franchise of all time, the Boston Celtics have been sold, pending league approval. The Celtics sold for $6.1 at the initial payment and $6.6 in terms of blended valuation.

A group led by William Chisholm has agreed to buy the Celtics in a stepped deal, meaning there will be two separate transactions/payments at two different dates. The Celtics’ current owners get 51% of the sale money now and 49% by 2028. That was apparently a prerequisite of the deal for Wyc Grousbeck. The term “blended valuation” essentially demonstrates the price of the two payment transactions combined. This article by Sportico does a great job laying out these details and others.

Chisholm is a private equity guy from Georgetown, Massachusetts (north of Boston). He attended Dartmouth College and is the co-founder and managing partner of Symphony Technology Group.

The Celtics have been owned by a group of owners led by Irving Grousbeck and his son Wyc, and Wyc’s name is the one you’ve likely heard the most. While he actually owns only 3%, he’s been the front-facing, controlling owner of the team. This group bought the team for $360 million in 2002, which would be about $650 million today.

That means that Grousbeck’s group is getting roughly 10x on this deal, adjusted for inflation. Make no mistake, this transaction is a sign of just how much sports franchise valuations have risen by astronomical values this century.

What makes the deal even crazier is that the Boston Celtics don’t actually own their own arena, and only own 20% of the Celtics’ local TV network, NBC Sports Boston, according to the Sports Business Journal. The stadium is the bigger deal, as you’d usually expect the stadium to be a part of the package if the selling price for a team trumps the valuations by that much.

And that’s the thing here - this is yet another sale of a professional sports franchise that beat the valuation. Forbes values the Celtics at $6 billion, whereas Sportico values them at $5.66 billion. Last year, I wrote about this impending sale when it was announced that Grousbeck was selling, and I wasn’t even sure that it would eclipse $5 billion (though the Forbes/Sportico valuations were lower back then, as the Celtics won it all last summer). My reasoning was that former Dallas Mavericks owner Mark Cuban, who made his money by knowing when to get out of a bubble, sold the team for slightly cheaper than what would have been expected. It seemed like it was possible that NBA valuations were hitting a bit of a (soft) ceiling.

Well, that’s clearly not the case. Chisholm and the rest of his partners just got the team for a record price despite the fact that the stadium isn’t attached to the deal and that they don’t get full control for three years. (By the way, the Washington Commanders were sold for $6.05 billion. It’s not a coincidence that the Celtics went for $6.1B and not exactly $6. The old Celtics owners wanted the title of “Most expensive sale of all time.” Just saying.)

Now, onto Chisholm. It looks like Celtics fans should generally be ok with this guy. He’s a local Massachusetts kid with a ton of money, and he wants to be a good owner who learns from Grousbeck for the next three years, according to the reports.

With that said, as a Celtics fan, I’m not as happy with this as I would have been with another choice. There was another offer by an ownership group led by Steve Pagliuca, who is currently a minority owner of the Celtics. Pagliuca has been a part of this Celtics ownership group that has routinely spent as much money on the Celtics as was necessary to build a contender, and Pags promised to keep doing more of the same if he was in the head chair.

Pagliuca actually posted on Twitter/X today about this, and his write-up is pretty fascinating. (Don’t believe the clickbait headlines that you’re reading about how he blasted the new ownership group or anything like that.) He did mention, though, that his group’s offer did not include any debt or deferred payments, which he considered an asset.

We have no idea why Grousbeck chose Chisholm’s offer over Pagliuca (though i’d venture to guess that the total money involved was a big part of it… just guessing), but it is entirely possible that Grousbeck specifically wanted a deal that would let him remain as a part owner for three years and that Pags didn’t offer that, based on the phrasing of his tweet. It’s also fascinating that Pagliuca openly said that his ownership group would be willing to step back in if the deal with Chisholm fails, which suggests that he knows that there’s a lot of complicated financing in the winning bid.

Last thing: Chisholm – and any owner of an NFL, NBA, MLB, or NHL team should be willing to spend whatever is necessary for a championship. I know that’s easy for me to say from my own desk and with <0.1% of the money that these guys have, but it’s true. The big four leagues in American sports have made money hand over fist, and they do so because of the fans’ passion that has to do with something more emotional than financial.

I don’t mean to sound too naive or like a sapp, but fans do at least have a right to know that the owners of their favorite teams care about winning, since the potential of winning is what fans spend their money for. I’ve heard the idea that sports teams should be viewed as a work of art, such as a painting, more than a business. I’m no art connoisseur, but apparently, painting collectors admit that roughly 28% of the selling price comes down to some emotional feeling involved in having the painting, rather than the hard line financial worth of the piece of art.

I like this idea, in part because it explains how every team sells for more than the Forbes or Sportico valuations. It also demonstrates why owners should be willing to spend money on trying to win, as a sports team is not just any other business.