The NBA's private equity ownership rules may be tested by the record-breaking Boston Celtics sale, in a way that could have repercussions for future transactions. The big picture: Bill Chisholm, the club's presumptive new control owner, has committed less money to the two-part deal than has Sixth Street Partners, according to three sources. That is not allowed by the NBA, per regulations first established in 2021. Instead, a PE fund can have the lesser of 20% or below the percentage held by the control owner (who must hold a 15% minimum stake).
Behind the scenes: There seem to be two options for Chisholm, whose deal was announced before it was fully financed. One is that he pulls in so many new investors that Sixth Street's full check is no longer needed — and the firm allows itself to fall below Chisholm in the cap table. This remains possible before other owners vote in June, particularly if some existing minority investors roll over their stakes and/or some of the losing bidders join with Chisholm. The other is that Chisholm requests some sort of waiver from the league, guessing that other owners won't reject a deal with so high a price tag. Spokespeople for Chisholm's group, Sixth Street, and the NBA all declined comment.
The bottom line: Private equity firms not involved with the Celtics will pay very close attention to how this plays out. If Chisholm and Sixth Street do get a waiver, they'd be emboldened to try something similar — and maybe even believe there's legal precedent to do so.
New Celtics owner Bill Chisholm’s time in relative anonymity appears to be coming to an end as he attended Monday night’s Celtics-Kings game in Sacramento after agreeing to purchase the team last week, according to Adam Himmelsbach of the BOSTON GLOBE. Celtics fans at the Golden 1 Center yelled down to Chisholm as he stood on the court, offering support and fist pumps. On April 2, Chisholm will attend the Celtics’ game against the Heat at TD Garden.
Chisholm has mostly stayed out of the spotlight during his career in private equity, and little was known about him when he emerged as a finalist this month to buy the team. Himmelsbach wrote the appearance this week was essentially Chisholm’s orientation. He had a lengthy chat with President of Basketball Operations Brad Stevens in front of the Celtics’ bench, and F Jayson Tatum and G Jaylen Brown stopped to talk with him after concluding their pregame workouts. Chisholm and Stevens spoke extensively last week.
Chisholm made it clear he has no intention of disturbing a franchise that won an NBA title last season. Tatum and Brown had separate conversations with Chisholm and offered their congratulations. NEW ATTENTION: THE ATHLETIC’s Jay King wrote Chisholm has never gone out of his way to seek the spotlight and might even do his best to avoid it. Chisholm isn’t used to walking around with every eyeball in New England on him. It will be a big deal when he shows up somewhere.
If the team sheds salary this summer, the decision will come with heavy debate and criticism. A Celtics owner needs to deal with all of that noise and still keep the mental clarity to operate in the best interests of the franchise. And those don’t necessarily match what the public wants. King noted, “Sometimes it’s best to pay the public scrutiny no mind. Chisholm will need to learn how to deal with the limelight.”
