HoopsHype Herb Kohl rumors

April 24, 2014 Updates

Herb Kohl tapped the NBA’s revolving loan fund twice in 2009 and three times in 2010, according to personal financial filings from his final year in the U.S. Senate that shed light on his statement that he spent “well over $100 million” keeping the Bucks afloat. “I went into debt,” Kohl told me in an interview. “The league has a credit facility and we got to the limit of what we could borrow. It turned out fine. I have no complaints on the money side.” Business News

After the news April 17 that Kohl agreed to sell the Milwaukee Bucks for $550 million, I asked him about the return on his initial 1985 investment of $18 million to $19 million. Kohl pointed out that he had spent “well over $100 million” keeping the Bucks in business and went into debt with the NBA, but would not give a specific dollar figure. “I didn’t invest for the money and it doesn’t take into account the money I’ve put in over the years to keep the team afloat during the times when the (NBA’s) economic model was broken,” Kohl told me. “It was well over $100 million, so you can just start subtracting from what I received here.” Business News

Kohl’s last day in the Senate was Jan. 2 after 24 years. His sale of the Bucks, of which he is the sole owner, still requires NBA approval. The buyers are New York City investment executives Marc Lasry and Wesley Edens. “Some people will look at it and say, ‘Herb Kohl is making $550 million on this,’” Kohl told me. “I’m saying, ‘Hey, that’s not true.’ It’s a business that has risks. When I bought the team, the NBA was a very small, shaky enterprise. There were many problems in the NBA when I bought this in the middle-’80s. Some of my investments have turned out better, some worse.” Business News

April 21, 2014 Updates

The NBA has the right to buy back the Milwaukee Bucks from incoming owners Wesley Edens and Mark Lasry if a deal to a bring a new arena to the city is not in place by November 2017, according to sources briefed on the situation. Sources told ESPN.com that the sale agreement announced last week to transfer the Bucks from longtime owner Herb Kohl to Edens and Lasry for a purchase price of $550 million includes a provision that allows the league to buy back the team for $575 million if construction on a new building in Milwaukee is not underway by the deadline. ESPN.com

April 18, 2014 Updates

Dallas Mavericks owner Mark Cuban considers the sale price of approximately $550 million for the Milwaukee Bucks to be a bargain, suggesting the true value of NBA franchises is north of $1 billion. Longtime Bucks owner Herb Kohl announced Wednesday that he had reached an agreement to sell the team to hedge-fund billionaires Wesley Edens and Marc Lasry, a deal subject to approval by the NBA and its board of governors. "I think they got off cheap," Cuban said. "I think that was a bargain. I think it's worth a lot more. I think it's worth a lot more than that. I think someone got a bargain. You can't look backwards. You've got to look forward. You don't value teams based off what happened in the past." ESPN.com

April 17, 2014 Updates

The ownership change creates plenty of uncertainty for the Bucks management team led by general manager John Hammond and the players and coaching staff. Hammond and coach Larry Drew both have two years remaining on their contracts, and the Bucks are coming off the worst season in franchise history — a 15-67 effort that has earned the team the best chance in next month's NBA draft lottery of landing the No. 1 pick. "It's life; it's a business," Kohl said. "They understand. Whether we have new management, I would have the same choices to make (if he had remained team owner). "I hope good things happen for everybody, but you're running a business. It involves making choices. By the way, it's never come up. Milwaukee Journal-Sentinel

Edens said pending league approval of the purchase, he and Lasry would begin to speak with the basketball staff and others in the organization. "It's Day 1 for us," Edens said. "And it's a process. We've had a lot of experience in investing in various businesses and successful ones are run by great organizations. We're all about hiring the right people and having the right people in place. "We think there are a lot of terrific people in the organization. We haven't really spent any time assessing people in the organization in any meaningful way. We're going to figure it out." Edens said, "Obviously there's a big draft coming up and there's a talent assessment going into that." "We'll start immediately but it becomes in earnest once we have closed on the transaction." Milwaukee Journal-Sentinel

April 16, 2014 Updates

Bucks owner Herb Kohl was well past retirement age and realized it was time to secure the future of the franchise. He had one big caveat for any potential investors: Keep the team in his hometown of Milwaukee. And he found a buyer. The former U.S. senator is banking on New York investment firm executives Marc Lasry and Wesley Edens to follow through after agreeing to sell them the Bucks for about $550 million. The deal is subject to approval by the NBA and its board of governors. "I wasn't going to live forever. I've approached a time in my life where I have to think about ... how do we think about succession," Kohl, 79, said Wednesday at a news conference in the atrium of the BMO Harris Bradley Center. The deal was announced hours before the team was to play its final game of a dismal season. USA Today Sports

The Milwaukee Bucks won’t be moving any time soon. Today, Herb Kohl reportedly sold the Bucks to hedge fund billionaires Marc Lasry and Wesley Edens for $550 million. Bidding for the team has been open since December, and rumors circulated that the Seattle duo of Steve Ballmer and Chris Hansen were interested in purchasing the team. However, Kohl made a condition of the sale that the team would stay in Milwaukee. The Fields of Green

Forbes recently listed the Bucks as the least valuable franchise in the NBA at $405 million, which means the team sold for a 36 percent premium on their valuation. The Bucks are in the smallest market with one of the worst arenas in the NBA, so why were billionaires lining up to buy the NBA’s least valuable team? The Fields of Green

One reason is that NBA teams have cost certainty until 2017 based on the most recent collective bargaining agreement (CBA). There is a slim chance the CBA could last until 2022. However, that is doubtful due to the NBA’s upcoming new media deal driving up the valuation of small-market teams, such as the Sacramento Kings and (drum roll) the Bucks. The Fields of Green

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