Celtics sale story, not a story book ending for Wyc?

Report: Dispute over Boston Celtics ballooning payroll triggered sale of team
Justin Quinn
Celtics Wire

Jul 11, 2024; Los Angeles, CA, USA; Boston Celtics majority owner Wyc Grousbeck and his wife Emilia Fazzalari arrive on the red carpet before the 2024 ESPYS at Dolby Theatre. Mandatory Credit: Kiyoshi Mio-USA TODAY Sports
Could the Boston Celtics' potential sale of the shares owned by majority owner Wyc Grousbeck be more closely tied to the exigences of the league's new collective bargaining agreement (CBA) than we were previously led to believe? If the reporting we are seeing from the New York Post's Josh Kosman is accurate, it very well could be the case.

Per Kosman, the Celtics' rapidly ballooning payroll was the catalyst that sent the Grousbeck family down the path to selling their cut of the storied ball club. And with the new CBA's especially punishing tax hits on teams like Boston (to say nothing of the other penalties levied on so-called "second apron" teams), the dots appear to be connected.


"Irving Grousbeck, a 90-year-old Massachusetts-born entrepreneur who owns a controlling roughly 20% stake in the team, balked at funding big losses on the horizon from the massive contracts that helped the Celtics capture a record 18th NBA championship in June," writes the Post reporter.


"To win that title, his 63-year-old son Wyc Grousbeck put together the league’s priciest roster – one that is projected to cost around $500 million for the 2025-26 season after shelling out big-buck contracts this summer to lock up its stars," he adds.

According to Kosman, the team "barely broke even" last season, and is looking at a potential $80 million loss this coming season, one which will grow substantially when the 2025-26 season arrives. While all such chatter around the team ought to be taken with a grain of salt, this reporting raises some interesting questions about how it might affect the Celtics' season -- and sale -- over the next few months.

All gloom and doom!

Things are so bag that Pags still wants to be an owner.  

There will be 2 years 24-25 and 25-26 where the Celtics are very likely to lose money.  But if you look at prior  years they made money.  They are no different than any other business when it comes to profit and loss.  The future remains bright.  

A company invests money to improve their product and that investment may not pay dividends immediately.  Companies write off losses on their taxes.

The Celtics are in fact way ahead of the curb because they made investment in the players instead of creating uncertainty.  They invested the money knowing full well that a big tax bill would negatively impact their  operating income for a few years.  There are a lot of ways to manage that.  For example they could take out a loan to cover the increase costs associated with the draconian NBA tax.

We know that there will be expansion coming down the pike in 2-3 years.  It is going to happen.  I would estimate that the franchise fee will be somewhere in the $5-6 billion range.  Multiple that times 2 new teams and then split the money up between 30 teams.  

The new TV deal will impact revenue for every team.  Although the cap is expected to only increase by 10% each year, the compounding effect will be substantial.  

The Celtics are well positioned for the future.  When star players from other teams are resigning new contracts the price will be significantly higher than the contracts signed by Celtics players.  New money will be more than old money.

My only thought is, in reality, I think from the way he has always been, that this is not what Wyc envisioned happening. He loves the Celtics, I could be wrong, dead wrong, but I just wonder. I do not know about Steve Pagliuca, haven't heard a word about him lately. Maybe this is a good thing?? Maybe he is quietly building his own team of buyers? But the names we are hearing up here are big money guys, the Amazon guy has supposedly said he is not interested but his name is still out there, Steve Wynn, and ugh, The Fenway Group (even with denials from them I do not trust them) I hope Pags is able to pull it off, and yes, we are okay for a while, it was just comforting having an ownership that we thought would be around for a few runs. Spoiled I guess

So Irving is tight and doesn't want to take the financial hit.

It's Monopoly money to us fans, his stack will still be higher than ours after it is all said and done.

Cry me a river.

Are you telling me you don't have a stash someplace like Irv??? oh well, as I have said many times, it is what it is. Lifestyles of the rich and famous!!

It's a heavy price, but if you're a winning team, you may as well try to win as many titles as possible while you can.

KJ

Hey KJ. Hi, how are you doing?? Family growing???? Dad keeeps us up to date every now and then. Good to hear from you!!!!

Help me do the math.  Team was purchased for around $350M.  IRV was the big money guy but lets assume a 20% stake for the family.  ($70 million investment)

If the team eventually sells for $5 billion the Grousbeck interest would be around a billion dollars.  They made money in most years so they made out great and will realized a tidy sum when they cash out.

dboss wrote:All gloom and doom!

Things are so bag that Pags still wants to be an owner.  

There will be 2 years 24-25 and 25-26 where the Celtics are very likely to lose money.  But if you look at prior  years they made money.  They are no different than any other business when it comes to profit and loss.  The future remains bright.  

A company invests money to improve their product and that investment may not pay dividends immediately.  Companies write off losses on their taxes.

The Celtics are in fact way ahead of the curb because they made investment in the players instead of creating uncertainty.  They invested the money knowing full well that a big tax bill would negatively impact their  operating income for a few years.  There are a lot of ways to manage that.  For example they could take out a loan to cover the increase costs associated with the draconian NBA tax.

We know that there will be expansion coming down the pike in 2-3 years.  It is going to happen.  I would estimate that the franchise fee will be somewhere in the $5-6 billion range.  Multiple that times 2 new teams and then split the money up between 30 teams.  

The new TV deal will impact revenue for every team.  Although the cap is expected to only increase by 10% each year, the compounding effect will be substantial.  

The Celtics are well positioned for the future.  When star players from other teams are resigning new contracts the price will be significantly higher than the contracts signed by Celtics players.  New money will be more than old money.

+1 Dboss

It's not all gloom and doom. There are revenue sources on the horizon as you stated. I have a feeling Wyc will stay in the game.

Celtics17

They will get through it.   

If they held back resigning players we would be having a different conversation.   

By the time the sale which appears to be staggered is completed they will be out of the 2nd apron and moving to becoming below the 1st Apron.

The Jays should still be here in 3 years.  In the interim this team is built to win a few more titles before they may part with KP and maybe Jrue.