HoopsHype Karen Davidson rumors

June 1, 2011 Updates

Investor Tom Gores is now officially the owner of the Detroit Pistons. The team says the sale was formally completed Wednesday, one day after NBA Commissioner David Stern said the league's Board of Governors had approved Gores' purchase of the franchise. Gores takes over following a drawn-out sale by owner Karen Davidson that stretched back before the season. SI.com

May 19, 2011 Updates

With the current Pistons faltering and feuding infamously on the court and in the locker room juxtaposed vividly with the glories of the past, and details about any progress of the sale still spare after months of talks between bidders, the fans took out their frustrations on Davidson. They booed the woman who inherited the team when her husband died. "I thought it was just fine," an upbeat Davidson said Wednesday during the first round of interviews she has given since deciding to sell the team. "As one of my friends said to me, the word fan comes from fanatic and I like passion like that. "I did not take it personally." Detroit News

May 18, 2011 Updates

Current Detroit Pistons owner Karen Davidson says she'll retain part ownership of the NBA franchise, its arena and Palace Sports & Entertainment after the sale to Beverly Hills, Calif., billionaire Tom Gores is complete. The Detroit News and Detroit Free Press report Wednesday that Davidson won't say how big a minority stake she'll keep or if stepson Ethan Davidson will keep a piece, too. The Associated Press left messages Wednesday seeking comment from lawyers involved in the deal. ESPN.com

Detroit Pistons majority owner Karen Davidson and her advisers are optimistic that they can finalize the sale of the NBA franchise to Los Angeles billionaire Tom Gores in the next two weeks, attorneys for Davidson said today. “We’re shooting for the end of May,” Adam Klein, who heads the sports business practice of Chicago law firm Katten Muchin Rosenman, told the Free Press in a telephone interview. “Could it slip into June? Sure, it can,” he added. “But we’re well on our way.” Detroit Free Press

While not revealing the specific ownership split — nor the size of a small stake Davidson is expected to retain — Klein said it is “safe to assume” that Gores “will put in a majority.” Davidson indicated 16 months ago that she would be selling the team, along with the Palace of Auburn Hills and DTE Energy Music Theatre. “Mrs. Davidson decided that since she is not a business person, it would be best for the organization and for the (Davidson family) trust for a strong and successful business person took over, and that’s what Tom Gores is,” Labe said. Detroit Free Press

Additionally, New York-based Citi Private Bank Sports Finance and Advisory was selected last year by current Pistons owner Karen Davidson to broker a sale of the franchise in part because it was willing to subsidize the team's operations. "We were looking to see if the investment banker would finance the operation of the team," Joseph Aviv, co-managing partner of Bloomfield Hills-based Honigman Miller Schwartz and Cohn LLP, told the trade publication Michigan Lawyer's Weekly this month. He was part of the Honigman team retained by the estate of the William Davidson, who bequeathed the team to wife Karen Davidson after his March 2009 death. Crain's

Karen Davidson owns 76 percent of the Pistons. The remaining 24 percent was split among several people, who agreed to sell their shares when Davidson sold the majority. A source familiar with the situation said Davidson will retain an equity stake in the team and Palace Sports & Entertainment Inc. That stake will decrease as Gores, whose made his money via turnarounds, continues to pay for his increasing share of the franchise. Palace Sports is the umbrella corporation for the Pistons, The Palace of Auburn Hills and DTE Energy Music Theatre and holder of the contract to manage Meadow Brook Music Festival for Oakland University. Palace Sports was said to earn about $70 million annually in revenue. The venues collectively host 300 events for 3.5 million people annually. Gores, 46, owns Los Angeles-based Platinum Equity LLC. A source familiar with the situation said Gores is paying for much of the transaction with his own money. Crain's

April 11, 2011 Updates

A source familiar with the situation said that Davidson will retain an equity stake in the team and Palace Sports & Entertainment Inc. That stake will decrease as Gores, a Los Angeles private-equity billionaire who focuses on turnarounds, continues to pay for his increasing share of the franchise. What will be difficult, without a copy of the sale agreement, is figuring out what is apportioned in the sale price to the team and to the venues. There also is value in lesser-known aspects of the assets, such as the full TV studios inside The Palace of Auburn Hills. Crain's

April 9, 2011 Updates

The last time a self-made businessman in the prime of his life bought the Pistons, it worked out pretty well for all concerned. Bill Davidson was 52 when he struck a handshake deal on a Florida beach with Fred Zollner in 1974, and his stewardship of the franchise that Zollner brought to Detroit 17 years earlier produced three NBA titles and elevated the Pistons to elite status. Pistons owners tend to sink roots and stick around. With Friday’s news that Mr. D’s widow, Karen Davidson, and Tom Gores, 46, have struck a deal – pending the NBA’s expected formal approval – the Pistons are poised to have just the third owner in the 54 years of their existence in Detroit. NBA.com

April 8, 2011 Updates

Tom Gores has reached an agreement to purchase the Detroit Pistons. Pistons owner Karen Davidson and Gores issued a press release today announcing that they had come to an agreement on the sale of the Pistons -- along with Palace Sports & Entertainment -- from Davidson to Gores. Booth Newspapers

"We are pleased to welcome Tom Gores as the new owner of the Detroit Pistons and Palace Sports and Entertainment," Davidson said in the release. "Just as my late husband, Bill Davidson, was the face of the Pistons, I am confident that Tom will bring the same energy, dedication and love to the organization. I look forward to seeing Tom follow in Bill's footsteps and carry on his legacy." Booth Newspapers

April 7, 2011 Updates

Despite long silences in recent weeks, the sources told The Detroit News the process is advancing. The sides continue to talk, and believe they are nearing an agreement. But while there is some possibility a deal could be reached in time for the last NBA Board of Governors meetings this season, beginning Thursday, April 14, the sources say it is unlikely. Detroit News

How can something be both "close" and yet potentially anywhere from a week to several months from occurring? "It's the complex nature of the deal," a person close to the negotiations said Wednesday. "People of the best intentions are saying, 'How can this possibly be taking so long?' The best answer, simply, is: It just does. "There is no agreement in place. It might happen more quickly, but it also could take a while. That said? We still think we'll get there." Detroit News

April 2, 2011 Updates
March 31, 2011 Updates

Tom Gores repeatedly asks for more financial information from the Pistons. Karen Davidson tells friends she believes she has lost control of the process. NBA officials twice express confidence the end of negotiations for the purchase of the team is at hand, while league officials simultaneously push for a higher selling price. Hopes for an agreement to buy the team are raised, and then dashed. Detroit News

Nearly 15 months after Bill Davidson's widow began talking about selling the Pistons, Gores and her agent, Citi Private Bank, still are negotiating. In fact, some close to the negotiators say that not only is no agreement imminent, Karen Davidson's fatigue and frustration are growing. One source close to Davidson last week said the process is so utterly problematic, she feels as though she has lost control of it. Her concern, in part, is that while Gores continually requires more information, too few details of an agreement are in place, despite more than two months of exclusive negotiations. Detroit News

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