HoopsHype Joshua Harris rumors

October 16, 2011 Updates

The NBA Board of Governors has approved Comcast-Spectacor's sale of the 76ers to a group of investors led by New York billionaire Joshua Harris, an NBA source confirmed. The sale is expected to officially close early next week; the new ownership group is expected to hold a news conference, possibly as early as Tuesday. Terms of the sale were agreed upon in July: $280 million for 100 percent of the franchise. Completion of the sale has been pending league approval for more than two months while the league is mired in a labor dispute with the NBA Players Association. Philadelphia Inquirer

October 15, 2011 Updates
October 14, 2011 Updates

The organization is expected to hold a press conference in Philadelphia sometime next week to formally announce the sale. Though the NBA is currently in the midst of a lockout, Harris will now be able to fill in fans as to what his plans are with the future of the team, at least somewhat. Because of the lockout, Harris will not be alowed to discuss players or team personnel issues. One of the bigger questions surrounding the team is if current general manager Ed Stefanski will hold on to that job title. Stefanski has interviewed with the Toronto Raptors and is said to be a leading candidate for their GM position. Stefanski is held in very high regard by coach Doug Collins, who came in last season and improved the team from 27 wins to 44 in his initial season. Philadelphia Inquirer

The sale price is $280 million and does not include the Wells Fargo Center, where the team will now become a tenant. The arena will remain owned by Comcast-Spectacor, which also owns the Flyers. Harris, a co-founder of Apollo Global Management, bought the team from Comcast-Spectacor and chairman Ed Snider back in July. The new ownership also includes David Blitzer, a senior managing director of The Blackstone Group; former NBA player agent and Sacramento King executive Jason Levien; and Art Wrubel, who runs Wesley Capital in New York. Harris and Blitzer are both Wharton graduates. Philadelphia Inquirer

Comcast-Spectacor's sale of the 76ers to a group of investors led by New York billionaire Joshua Harris is expected to close early next week, according to a source close to the situation. Terms of the sale were agreed upon in July, but the deal has been pending approval of the NBA's board of governors for more than two months. The NBA has been mired in a lockout since July 1. On Monday, the league canceled the first two weeks of the 2011-12 regular season. The new ownership group is expected to speak publicly for the first time next week, assuming the sale is officially approved, as expected. Philadelphia Inquirer

September 20, 2011 Updates

By the end of the month, Comcast-Spectactor should be out of the basketball business when the NBA is expected to approve the sale of the team to buyout specialist Joshua Harris. Snider inherited one of the worst teams in the league in 1996 and had the Sixers in the NBA finals in 2001. The Sixers were mired in mediocrity for most of the last decade, and sagging crowds and massive financial losses led Comcast-Spectactor to pitch a "for sale" sign and strike a tentative deal to sell in July. "It was mostly economics," Snider said of the decision. Losing money? "A lot," Snider said, declining specifics. "We felt that we had given it our best shot and it was time for someone else to take over." MSNBC.com

July 31, 2011 Updates

Harris, head of the investment group whose ownership of the 76ers is pending approval by the NBA board of governors, seems like a man with few weaknesses: He's a billionaire, a respected businessman, a family man, and an athlete - not necessarily listed not necessarily in order of importance. He ran the 2010 New York City Marathon in a time of 3 hours, 53 minutes///, and 41 seconds///. He has five kids with his wife, Marjorie. According to Forbes, he's worth $1.2 billion. He recently attended his 20-year reunion for Harvard Business School and came across as the same guy he was when M.C. Hammer was cool and when he couldn't buy a small country: kind, down-to-earth, charming, clearly the smartest in a room filled with intelligence. Philadelphia Inquirer

July 14, 2011 Updates

This is the fourth time in recent years that private equity executives have purchased an NBA team. The first was in 2002, when the Boston Celtics were acquired for $380 million by a group led by Steve Pagliuca (Bain Capital) and Wyc Grousbeck (Highland Capital Partners). Minority partners on that deal included Glenn Hutchins (Silver Lake Partners), Michael Marks (Riverwood Capital) and Jim Breyer (Accel Partners). Next up was the Golden State Warriors, acquired last year for $450 million by venture capitalist Joe Lacob (Kleiner Perkins). Lacob actually was a minority owner in the Celtics, and beat out fellow Celtics investor David Bonderman (TPG Capital) for the Bay Area club. CNN.com

Joshua Harris, leader of the Wall Street group that has reached a deal with Comcast-Spectacor to buy the 76ers, is a billionaire bottom-feeder who buys damaged assets cheaply and sells them at a profit. That's how Harris, 46, who grew up in suburban Washington and graduated from Penn and Harvard, has made his bread since the end of the 1980s, when he escaped the former junk-bond giant Drexel Burnham Lambert. That was after Harris' fellow Wharton graduate Michael Milken wrecked the firm with illegal deals and went to prison. Philadelphia Inquirer

Will Harris use his buyout expertise to cut costs and jack up sales for another underperforming asset, the Sixers? Don't count on it, says David Niles, a New York business strategist who counts pro sports teams among his past clients. "There are a lot of buyout financiers who own teams," he said. Mark Cuban, owner of the champion Dallas Mavericks, made his money in private equity. Cuban was initially an activist manager but in recent years has stood back while his pros ran the club, Niles said. Philadelphia Inquirer

Harris and his colleagues made a killing from the biggest financial calamity of our time: the bursting of the subprime mortgage bubble that forced millions of Americans from their homes and froze the economy. Apollo was an owner of WMC Mortgage Corp., a mortgage lender to subprime borrowers, which it bought in 1997 as the real estate bubble was gathering steam, and sold at a profit of nearly $500 million in 2004, as the market neared its peak. Since the crisis, Apollo has acquired, at deep discounts, nonperforming loans, bad debt, and other "distressed and buyout investments." The acquisitions originally were worth more than $45 billion, and were purchased from "motivated sellers," Apollo told the Securities and Exchange Commission in a report. As the U.S. bank bailout took hold and values recovered, Apollo estimated its profits from those investments, for 2009 alone, at more than 50 percent. Apollo has left a trail of litigation. Investors in Linens 'n Things, the bankrupt retail chain, are suing Apollo, "alleging violations of the Federal Securities Laws and the making of negligent misrepresentations." Philadelphia Inquirer

July 13, 2011 Updates

Comcast-Spectacor agreed Wednesday to sell the 76ers to a group led by New York City billionaire Joshua Harris. The deal, worth a reported $280 million for 90 percent control, still has to be approved by the NBA’s board of governors. The deal does not include the Wells Fargo Center or the Philadelphia Flyers, although the Sixers will remain a tenant of the building. Comcast-Spectacor chairman Ed Snider will retain 10 percent of the team, but will not have control over the team’s operations. Delaware News Journal

Harris, who is worth $1.5 billion, according to Forbes magazine, is a graduate of the University of Pennsylvania’s Wharton School of Business. “We are honored to have the opportunity to be affiliated with this storied franchise,” Harris said in a press release. “As a basketball fan who attended college in Philadelphia, and with family roots here, I have always felt a strong connection to this city and the 76ers. We look forward to helping the 76ers organization build on this past season’s accomplishments in the years ahead. The ownership group also looks forward to a long and mutually beneficial relationship with Comcast-Spectacor.” Delaware News Journal

Sources have put the value of the deal at $280 million for a 90 percent share of the team. Comcast-Spectacor and owner Ed Snider will retain 10 percent of the team, but will not retain operational control. Also, the deal does not include the Wells Fargo Center, which currently houses the Sixers and the NHL's Flyers. The Sixers will become a long-term tenant of the Wells Fargo Center, which should ease worries that Harris has any intention of moving the team. According to Comcast-Spectacor's press release: "The team will remain a long-term tenant of the Wells Fargo Center and will have a long-term cable broadcast agreement for its games with Comcast SportsNet Philadelphia." Philadelphia Inquirer

Now the deal must be approved by the league's board of governors. The NBA needs to approve the sale and they will be thorough in their investigation. It is difficult to say exactly how long that will take but according to Adam Silver, the NBA’s deputy commissioner, the process can be lengthy. “It's difficult to say how long the process would take before we see what the actual deal is but the process usually takes about two months,” he explained in an e-mail. “But it could be longer depending on how many background checks need to be conducted, the type of financing the buyers are using, etc. Approval does not have to be done in person but a group of owners would need to interview the buyers at some point before the board votes.” CSNPhilly.com

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