Atlanta Hawks Are Off The Market, For Now
The sale agreement between California businessman Alex Meruelo and the Atlanta Spirit Group (ASG) has been called off according to a statement issued by Atlanta Hawks owner Bruce Levenson.
The pending sale arrangement was terminated by mutual agreement.
“The Atlanta Hawks are no longer for sale,” Levenson added in the statement. “We’re excited to remain as owners of the Hawks and are committed to building on our string of four straight playoff appearances.”
Meruelo was set to become the first Hispanic majority owner of a NBA franchise when the tentative agreement was announced in early August.
As part of the deal Meruelo had agreed to purchase a majority stake in the Hawks, as well as the operating rights to Philips Arena. The stake in the team was believed to be 80 percent at an estimated price tag of $300 million.
The deal required approval from 75 percent of the NBA’s Board of Governors and the passing of an extensive background check was also required to make the sale official.
However the vote for the sale never occurred.
The original delay in getting the deal approved was thought to be caused by the ongoing labor dispute which has led to the cancellation of all November regular season games, but the NBA Board of Governors unanimously approved the sale of the Philadelphia 76ers from Comcast-Spectacor to a group headed by billionaire Joshua Harris in late October.
This led to speculation that the deal was showing the early signs of trouble.
An ESPN report said that there were major concerns amongst league officials and within the Hawks’ current ownership group on whether Meruelo had sufficient funds in order to purchase a majority stake and efficiently operate the franchise.
Meruelo promptly issued a statement declaring he had “ample resources” to run the organization in a “first class” manner.
Now, with the deal officially off the table ASG, led by Levenson, Ed Peskowitz and Michael Gearon, Jr., will remain as the owner of the Hawks.
What Does This Mean? When a franchise is placed on the market it typically means the current owner(s) will keep operations running at a stable pace or attempt to reduce expenses to lure an investor and make the asset more attractive.
ASG has been entertaining the prospect of minority stakeholders in the team for quite some time.
Most believe stability has been the primary reason the Hawks have been content to rely on their core trio of Al Horford, Joe Johnson and Josh Smith instead of making any drastic changes – even after playoff disappointments the past few years.
When the sale to Meruelo was announced many close to the organization believed a new owner would embrace pulling out all of the stops in shaking up the roster to make deeper playoff runs and truly contend for a title.
While the official statement is the Hawks are no longer on the market, there are those who believe that once a new collective bargaining agreement is ratified, one which will heavily favor owners’ ability to turn larger profits, that ASG stands to make more money down the road if a new suitor shows up with an offer current ownership couldn’t possibly refuse.
The way things stand currently in the ongoing lockout negotiations league owners could potentially receive up to $2 billion or more in revenues from player rollbacks over the life of a new CBA deal.
With the same ownership group in place, once the 2012 season begins Hawks fans can expect the same steady front office approach which favors team chemistry and subtle roster turnover over major moves.
It doesn’t appear that ASG is in a hurry to leave the realm of NBA ownership, just analyzing the viability of all lucrative offers which are thrown their way.
More to come.