Even Worse than KG's Injury: Celtics' Owners in Poor House?

[TheSheriff]

Frankly, none of us knows the cs financial situtation, nor that of the Cs ownersahip. So we can't make assertions one way or the other. All we know is that the Cs apparently need an emergency loan to make their payroll. Lots of other teams are in the same boat, but just as many are not in the same boat. I'd rather be in the boat that can make payroll without an emergency loan, expecially when the team is one of the top revenue generating teams in the league.

That, alone, is distressing. That is all we have to go on. A little clarification from Wyc would be nice.

Elrod, you are making a jump in logic here...

Facts:

The league has provided a line of credit

the team is utilizing that line of credit.

its quite common for a company to utilize and existing line of credit instead of their own hard cash resources - especially in a time of recession.

When an outside source of credit is available and may not be down the line, utilizing said resource gives a team options that can actual expand their payroll capabilities, not restrict them.

The team may be more fiscally prudent or selective with their expenditures, but knowing that they are tapping into a credit resource does not mean the team is in dire financial straights.

My company is doing fine and we are utilizing our line of credit in order to maintain our cash reserve in the advent that this recession makes it a necessity to utilize.

Don't jump to conclusions - this may very well be a business decision, not a desperation move...likely actually...David Aldridge is awesome, but he's a reporter, not a business analyst...he could easily be reporting a story and making an assumption in his head that isn't accurate...

Exactly. Not a big deal. Nothing the ownership or team has done or said implies that they are going to be cutting payroll. They moved a couple of small contracts and saved money, but those guys probably would have been released anyway.

The ownership is not going to make significant cuts to payroll because right now they are selling out every game and making larger profits than they did 2 years ago in a good economy. If they cut payroll and stop being a contender they will lose revenue and their profits will go down, so that is not something they are going to do.

Maybe because of the economy the Celtics don't give a Mark Blount another massive contract, and that is fine by me.

[DEEP3CL]

Stop overreacting. Every franchise in the NBA is more careful about the economic side of basketball. Why do you think lakers traded Radmanovic? Why didn`t the blazers or cavs take on a big contract? Every owner is hurting right now and the celtics are no exception...If anything we are in a much better position then majority of teams, IMO.

I agree here 100% birdman, I wouldn't be surprise one bit if my Lakers are in that group that needs to borrow cash too. For a long time Dr.Buss was a one man owner but just before moving to Staples Center he sold 49% of the team to Phillip Anshults of AEG. And Phillip is a billionaire owner and flat out owns Staples.

But yeah I agree no owner is not going to conduct business if it doesn't benefit his interest. We all have to remember that you don't make money if you can't be shrewed in business, that's just the bottom line.

[ryaningf]

Frankly, none of us knows the cs financial situtation, nor that of the Cs ownersahip. So we can't make assertions one way or the other. All we know is that the Cs apparently need an emergency loan to make their payroll. Lots of other teams are in the same boat, but just as many are not in the same boat. I'd rather be in the boat that can make payroll without an emergency loan, expecially when the team is one of the top revenue generating teams in the league.

That, alone, is distressing. That is all we have to go on. A little clarification from Wyc would be nice.

First, I think this article is completely vague to the point of hardly saying anything. Second, as Elrod points out, none of us knows the Cs financial situation, so there's really no point to speculating too much in one direction or another. What we do know is this: we get sell-outs every night and have lucrative TV and radio deals which were negotiated in good financial times, so our revenue stream from the Celtics as an entertainment group is as steady and lucrative as it's always been. What we also know about the Celtic ownership group is that they are/were venture capitalists, which is one of the riskiest business endeavors out there, and so it's probable that the Cs ownership group has lost a decent-sized chuck of their capital in this current financial meltdown. Again, we don't know how much or how diversified the ownership's portfolio is...but being as successful as each of them were individually it's easy to assume that they're still doing alright relatively speaking, even if they have seen certain areas of their portfolio take big plunges. Last, the fact that the Cs are willing to dip into the NBA's emergency credit line isn't indicative of anything except the fact that the credit market is or will be frozen for a undetermined period of time and the Cs owners have decided to take advantage of that line in this period of financial uncertainty. Again, it says nothing about whether they NEED this emergency line of credit or whether it's simply convenient and/or business-wise. Finally, nothing in this article or none of the things that I've labeled as 'known' lead to the conclusion the Cs won't continue to make the financial expenditures necessary to make this team as competitive as it can be....as always, Danny is leading this team with both financial foresight and player personnel intelligence, getting the best players at the best prices while avoiding expensive contracts for limited or declining players.

[LA Titletown]

The fact that the C's were even contemplating taking on Nocioni and his big contract shows that the owners are still willing to pay for a winner.

Warning for being troll. canman

[Bad-Thoma]

The fact that the C's were even contemplating taking on Nocioni and his big contract shows that the owners are still willing to pay for a winner.

Might as well since they're on NBA welfare.

Welcome to the board ball-boy, and thank you for that insightful addition to our conversation.

JK, you're an ass. Thanks for stopping by though.

[elrod enchilada]

ryaningf captured my concern. Wyc and the owners are venture capitalists. Those guys, as a class, have been devastated over the past year as equity prices have collapsed for venture outfits. We have no way of knowing where the owners stand, but there are legitimate grounds for concern.

A little clarification from Wyc would be nice.

[ryaningf]

ryaningf captured my concern. Wyc and the owners are venture capitalists. Those guys, as a class, have been devastated over the past year as equity prices have collapsed for venture outfits. We have no way of knowing where the owners stand, but there are legitimate grounds for concern.

A little clarification from Wyc would be nice.

Just to elaborate on my earlier post, Elrod, I think it's important to note that the people who own the Celtics are a group of venture capitalists, and not a venture capitalist group. The correct placement of the adjective 'venture capitalist' is important because it denotes where the ownership's money came from and how the Celtics as a business is organized. See, the individuals in the ownership group earned a good portion of their money from venture capitalism and that money allowed them to later form a business group to buy the Celtics, but I think it's a stretch to say that the money now used to run the Cs has also been put at risk in venture capitalism. That is to say, while the individual Celtic owners may have seen their personal fortunes diminish exponentially during these bad financial times (if they are, as individuals, still pursuing highly risky venture capitalist investments), I don't think it's wise to assume that the Celtics--as a business--have similarly put some of their capital in highly risky venture capitalism. Not knowing any particulars, however, I can't say for certain what the nature of the Celtic investments might be, but to my limited business sense, it just doesn't make sense to run an NBA franchise like that and I'm pretty sure the NBA as a governing body has rules in place to prevent such high risk, high reward investing by its teams. Of course, the individual owners may do what they want with their money, but when it's the team's money then I think the NBA might just hold them to a different investment standard.

I also happen to think the Cs ownership group is made up of very intelligent business men who have probably done very well--comparatively speaking--minimizing the impact of the financial decline on their personal fortunes.

[DEEP3CL]

Just curious here guys but how much of a percentage does Wyc own of the Celtics ?

I do know he's part of a group that owns the team, but I'm quite sure his percentage is controling.

[Fencer reregistered]

If the debt is "cheap" enough the businessmen who run the Celtics will grab it whether they need it or not.

In direction this news isn't good, but the magnitude of the news is very small.

[UGA Hayes]

Well I think this is probably a more longterm concern in retaining our owners more than anything. My understanding of NBA finances is that where teams really make a profit is having home games in the playoffs. So, while overall the owners might question the investment of ownership of an NBA team, while they actually have a final worthy team its in their interest financially maintain that they are finals caliber even if it means holding onto expensive players.

[jfs1000d]

Problem is the owners paid a ton for this team. This wasn't cash, it was part financing which in the current climate is getting killed.

The Celts have a ton of debt.

[MyInsatiableOne]

Well, everyone's been hit to an extent by this economy, but when it comes to worrying about pro-basketball's (even the Celtic's) financial woes, I really just can't be bothered. I'll yell at the refs (from my couch), I'll cheer or jeer Danny's moves, I'll watch every game, but the financial problems of the mega-rich pro sports industry just don't have a place in my heart. Even if they affect the team, sad as that may be. I'm a die hard fan, but sports is just sports and there are millions of people out there losing their jobs, and though I am optimistic that we will recover I recognize that we are teetering on the brink of a crisis that could bring back the days of the great depression. I'm not criticizing you with this Elrod, I see where you are coming from, it's just something I refuse to let bother me. If the NBA were to financially collapse tomorrow (it's safe from doing so), I'd care more about the regular joe's who lost their jobs than the owners and athletes who've been making obscene amounts of money for so long. Pro sports could use a shake-up to bring them back to earth a little bit, when athletes need to make 20 mill a year and courtside seats can cost thousands of dollars, well **** their financial problems.

****, amen brother. Even in good time they make too much **** money for me to care THAT much...

[Fencer reregistered]

I worried when I saw that Highland Capital Management was suffering:

http://www.emii.com/Articles/2107460/He ... =EMS248514

Fortunately, it's not the same thing as Highland Capital Partners. The latter is Wyc's firm.

[jfs1000d]

Misguided but understandable.

If the Celtics went under, it would affect regular joe's and janes.

If the Celtics went under then all the arena people, front office people, secretaries, the hundreds of vendors, their employees, people at the tv and radio stations, the restaurants next door and as well as the wait stuff would all lose their jobs.

Think of the parking lots empty. Because of all this, the tax revenue lost would probably cause a tax problem and lead to a further cut of services by the city.

Celtics are big business, and the amount of jobs and money they create is an important part of the economy, especially around Causway street. Ask a bar owner how important the Celtics run to the title was last year.

Popular teams like the Celtics Yankees and Red Sox develop their own economy around them. In a town as big as Boston, it has an effect. While it wouldn't destroy the area if they went under, it would severely impact that area of the city.

[tombattor]

Misguided but understandable.

If the Celtics went under, it would affect regular joe's and janes.

If the Celtics went under then all the arena people, front office people, secretaries, the hundreds of vendors, their employees, people at the tv and radio stations, the restaurants next door and as well as the wait stuff would all lose their jobs.

Think of the parking lots empty. Because of all this, the tax revenue lost would probably cause a tax problem and lead to a further cut of services by the city.

Celtics are big business, and the amount of jobs and money they create is an important part of the economy, especially around Causway street. Ask a bar owner how important the Celtics run to the title was last year.

Popular teams like the Celtics Yankees and Red Sox develop their own economy around them. In a town as big as Boston, it has an effect. While it wouldn't destroy the area if they went under, it would severely impact that area of the city.

I agree. I don't necessarily worry for Wyc's family's next meal, but it sux that even people like that are so severely affected. And personally, it sux that there is a chance the Celtics won't be able to put out the same product we've seen in the past 1.5 years.

[MyInsatiableOne]

I agree with jfs and tombattor that the people working in and around the team would be affected, but in the grand scheme of things I still think it wouldn't be as bad as what's happening to us regular joes (and what is going to happen to us over the next 4 years...YIKES!)

[sully00]

The Celtics are owned by Boston Basketball Partners. The controlling interest belongs to Wyc and his father Irv, as well as his investment Abbey Investment Group, and Steve Pagliuca. They have at least 16 other partners.

These guys are worth tons of money that is not the issue. The problem is the same being faced by every business in the country, how to acquire lines of credit for operating expenses on favorable terms. The Celtics are an extremely leveraged asset, on top that it is not valued near the price that was paid for it. While the owners could use their own leverage to get financing the Boston Celtics franchise may not be very attractive lenders right now. The NBA is very attractive to lenders and so if they negotiate the credit that way then they get better terms.

[MyInsatiableOne]

^^Interesting, although honestly I could care less about the finances of my favorite teams...yes I want them to do well and win consistently, etc, but as has been stated in this thread, at the end of the day, whether these guys are on the last place team or the champs, they go home at night never having to worry about $$ (unless they're idiots who blew it all) while us regular schmoes need to worry how we're going to pay the rent and the water bill, etc...

So honestly I don't give a ****...I'll root like hell for the C's (and Sox and Pats) but I certainly don't and won't get too invested in it, financially or emotionally...

[Banks2Pierce]

I agree with bfb. They are just utilizing a line of credit that may or not be there down the road. And this could be troubling if they are in trouble financially because we can say goodbye to paying anything over the vet minimum for FA's and may have trouble with giving Rondo what he wants. I'm no expert on the cap, but I think this could have an affect on Rondo's extension.

[MyInsatiableOne]

^Yes indeed, it could very well affect them...and just because they are accessing a line of credit doesn't mean they are desperate...this happens all the time in the business world...

No shocker if Aldridge was over-dramatizing it...in fact I'd bet on it...especially since it pertained to the C's and would make them look worse...