Co-governor Wyck Gruesbeck savoured the joy of victory when the Celtics won their 18th championship last month, a smooth season that ended with top honors and a future that looked promising.
And on the same day the team signed Jayson Tatum and Derrick White to big-money contract extensions, it announced it was for sale. Co-governor Steve Pagliuca released a statement shortly after confirming his intention to participate in the bidding process and retain ownership.
But it's unclear why Grousbeck, who has been the face of the franchise's title contenders, is stepping down now. He broke his silence on Monday, bringing the Larry O'Brien Award trophy into CNBC studios in New York.
Grousbeck joined the TV business network that specializes in buying and selling stock in billion-dollar companies, so when his CNBC “Closing Bell” interview began with questions about how he'd been doing in recent weeks, he didn't mention the sale, allowing him to display his charisma next to the sports holy grail and indirectly give potential buyers a sense of what it would be like to own an NBA champion.
“It's been a dream,” Grousbeck said. “When you carry the trophy around, it's heavy. We've put it here at the (New York) Stock Exchange. We put it in the Hamptons last week. Wherever it is, people flock to it. I love feeling the Celtic pride and championship atmosphere. It's a great feeling.”
He later talked about how it felt to carry the trophy down Causeway Avenue in the championship parade in June, which was Boston's 13th this century. “To me it's not just about the Celtics, it's about everybody,” he said.
So why sell the team now? According to the Celtics' announcement, the controlling family of the ownership group decided to sell the team due to financial and family planning considerations. Grusbeck detailed the family's ownership structure:
Boston Celtics Governor Wyck Grusbeck discusses his and his family's surprising decision to sell their ownership stake. https://t.co/RsigWelpvX pic.twitter.com/5k4ntrIyOo
— CNBC (@CNBC) July 8, 2024
“Just to be clear, this is not my majority stake. My family has control over the team,” Grousbeck said. “So there's the family that I'm a part of, there's the Celtics family that I'm a part of. So there's an intersection there, there's involvement. The family has been involved for 22 years. We've had discussions and we've looked at estate planning, family planning.”
Grousbeck did not disclose what aspects of his finances or family planning contributed to his decision to sell the team. The original announcement of the sale also stated that Grousbeck intended to remain with the team through 2028, despite the sale process beginning soon.
“I hope and expect that to happen,” he said. “We'll see what happens and go from there. The plan is to sell the team in two parts – 51% to be sold immediately and 49% to be sold in a second sale in 2028. I plan to stay until '28 and will be bringing in bankers and advisors and it will be a significant bidding process.”
Boston's total payroll is set to exceed $200 million a year from now, and a luxury tax bill could more than double the team's expenses. Franchise valuations have risen significantly recently, making the Celtics the largest franchise to enter the NBA market in some time.
“If we don't sell, that's OK,” Grousbeck said of the market expanding with the same program in January 2023. “But it works that way. But we get paid to have fun, and we love that, so that's really true. But these (franchises) are becoming more valuable than I ever expected. This is an opportunity to be on the world stage and compete.”
Now, a little over a year later, his family is opening up bids to the public, and while Pagliuca intends to remain with the future ownership group, new investors could come forward.
“Steve has been a great lead partner and in many ways a lead co-owner,” Grousbeck said Monday, “and he brought Danny Ainge to the table at the time we were looking for a general manager. Steve is a great guy and a great character, and we welcome him into the bidding process.”
One new feature of the public bidding process is that sovereign wealth funds could potentially buy up to 20% of a franchise – the NBA implemented a 20% cap on sovereign wealth funds in 2022, meaning sovereign wealth funds cannot take a controlling stake in a team.
“I was part of the committee that looked at it and voted in favor,” Grousbeck said in a January 2023 interview. “I feel like you need the entire core to do this kind of evaluation, not just the lead owner. I have 20 great partners that I've worked with for 20 years, and we're a group. It takes a lot more than 200 equity (partners) to bring that group together today. We're kind of global, and we're an investment class that's become more respected and valued by investors as a mostly countercyclical, mostly secular play. We welcome sovereign wealth.”
Earlier this season, the Celtics inked a deal to play the Denver Nuggets in Abu Dhabi in October. The Nuggets' Public Investment Fund was reportedly part of an unsuccessful bid to buy the Phoenix Suns and Mercury. Those franchises were sold to Matt Ishbia for $4 billion in December 2022.
Mark Cuban sold a majority stake in the Mavericks to the Adelson family for a valuation of more than $4 billion, retaining 27% ownership, in December 2023. Cuban, the most involved owner in the league, had long stated he had no intention of selling the team, but like Grousbeck, the time to sell had finally come.
Grousbeck has long been the outspoken energy while Pagliuca has played a larger role behind the scenes, and for a Celtics team characterized by ownership and front office stability, this would be a big change for the franchise.
“At the end of 22 years, or 25 or 26 years, you're going to find somebody else who has the energy to come in,” he said. “We're going to try to find the right buyer.”
(Photo by Billy Weiss/Getty Images)
