Owner Profiles: Central Division
With the lockout in full effect, we here at HOOPSWORLD continue our look at what comprises the “Owners” side of the debate with a look at the men behind the teams of the Central Division. Who are the owners, where did they come from, and what have they done?
While the NBA will debate the validity of these numbers, we will use the 2010 Forbes Magazine NBA valuations as a means of comparing the teams to each other. Forbes doesn’t claim these are 100% accurate – they are estimates – and they may not match an actual bottom line figure, but in the absence of having actual figures Forbes’ numbers are a starting point. Plus, the relative difference in the numbers between teams is still likely accurate.
Chicago Bulls – Jerry Reinsdorf
Ownership Group: Reinsdorf owns a shade under two-thirds of the Bulls and makes all the ownership decisions. The rest is owned by a group of private investors.
Purchase Price (year): $10.2 million (1985)
2010 Forbes Valuation: $511 million
2010 Forbes Revenue: $169 million
Education: Bachelor’s, George Washington University; J.D., Northwestern University
Other Business Interests: Made his first money in a real estate partnership, which he sold in 1973 and formed Balcor, a company that raised money for buildings under construction. He sold that company to Shearson Lehman Brothers in 1982 for $102 million. Also owns MLB’s Chicago White Sox, which he bought for $19 million in 1981 and Forbes now estimates to be worth $526 million.
Notable Team Achievements: The Bulls won six NBA titles behind Michael Jordan, Scottie Pippen, and Phil Jackson in the 1990s. Three other times, including 2011, they have fallen in the Eastern Conference Finals, and since 1985 have reached the NBA Playoffs in 20 of 27 seasons.
Ownership Philosophy: Reinsdorf was blamed for breaking up the championship Bulls and called cheap because he didn’t feel exorbitant contracts to keep the team together were warranted. After the 1998 lockout he simply decided to start over. Recently he has started approving bigger contracts to the likes of Ben Wallace, Carlos Boozer, and the extension for Joakim Noah. Reinsdorf stays involved in decisions and it seems will pay the costs for a product he believes in.
Cleveland Cavaliers – Dan Gilbert
Ownership Group: Dan’s brother Gary, recording star Usher Raymond, and former Cavs’ owner Gordon Gund each have a minority ownership piece. Dan Katzman, an original investor in the group, reportedly sold his 15% stake to Dan Gilbert last year.
Purchase Price (year): $375 million (2005)
2010 Forbes Valuation: $355 million
2010 Forbes Revenue: $161 million
Education: Bachelor’s, Michigan State University; J.D., Wayne State University
Other Business Interests: Gilbert found Rock Financial in 1985, which was bought by Intuit, Inc in 2000 and it was re-named Quick Loans. Two years later Gilbert bought Quick Loans back from Intuit and remains the chairman. He is also a founding partner of Rockbridge Growth Equity LLC and venture capital firm Detroit Venture Partners. Gilbert is also invested in Fathead, Veritix, Xenith, ePrize, Stylecaster, and Quizzle. Gilbert has a reported net worth of just under $1 billion.
Notable Team Achievements: Since Gilbert bought the team, during the time of LeBron James, the Cavs reached the NBA Finals once, the Eastern Conference Finals two more times, and two additional times the second round the playoffs. Without James last season they won only 19 games.
Ownership Philosophy: Gilbert is not a hands-off owner, as his post-Decision letter to the world made clear. He is emotionally invested in his team and will spend the money needed to make the team better if possible – one example of this is taking on the contract of Baron Davis to also get the L.A. Clippers’ top pick in 2011, which turned out to be #1 overall and point guard Kyrie Irving. It’s unlikely he will allow the bad times that followed LeBron leaving to last long.
Detroit Pistons – Tom Gores (Platinum Equity LLC, of which Gores is chairman and CEO)
Ownership Group: None
Purchase Price (year): $420 million (2011)
2010 Forbes Valuation: $360 million
2010 Forbes Revenue: $147 million
Education: Bachelor’s, Michigan State University
Other Business Interests: Founded Platinum Equity LLC in 1995, a firm specializing in rebuilding stressed companies to sell for profit, and today it manages 33 entities, including Palace Sports and Entertainment. Gores is reportedly worth in excess of $2 billion. The Pistons’ deal also netted him The Palace at Auburn Hills and DTE Energy Music Theater.
Notable Team Achievements: The Pistons failed to make the playoffs this year.
Ownership Philosophy: It’s still very early, but Gores appears to be trusting Joe Dumars to make decisions, at least for a little while longer. Having not been through a free agency period it’s hard to figure if he will be a spender or not. At Platinum Equity his firm built their portfolio based on a policy of operational intelligence, allowing experts in their field to do what they do best. Based upon that, it seems as if Gores will likely trust basketball people to make basketball decisions, but also won’t hesitate to replace them when they fail to live up to standards.
Indiana Pacers – Herb and Mel Simon
Ownership Group: N/A
Purchase Price (year): $13 million (1983)
2010 Forbes Valuation: $269 million
2010 Forbes Revenue: $95 million
Education: City College of New York (Herb); Bachelor’s, City College of New York (Mel)
Other Business Interests: Herb and Mel Simon founded Melvin Simon and Associates, which specialized in mall construction. Simon Property Group went public in 1995 and merged with DeBartolo Realty Group in 1996. Perhaps the company’s most well-known project is the Mall of America in Minneapolis. Herb Simon bought Kirkus Reviews last year.
Notable Team Achievements: Since 1983 the Pacers have lost in the NBA Finals once, the Eastern Conference Finals five times, and made the playoffs 18 times in all.
Ownership Philosophy: The Simons are fairly hands-off when it comes to the Pacers, allow good decision makers like Donnie Walsh, Kevin Pritchard and Larry Bird to run the team. They will spend to keep players who fit the core but have no interest in flirting with the luxury tax.
Milwaukee Bucks – Senator Herb Kohl
Ownership Group: None
Purchase Price (year): $19 million (1985)
2010 Forbes Valuation: $258 million
2010 Forbes Revenue: $92 million
Education: Bachelor’s, University of Wisconsin-Madison; M.B.A., Harvard University
Other Business Interests: Senator Kohl has represented Wisconsin in the Senate since 1989 and has announced he will not seek re-election in 2012. He and his brother were heirs to the Kohl’s retail and grocery chain, which merged with Batus, Inc. in 1972. He was president of the corporation until 1979, when it was sold. Before that he had his own company, Kohl Investments, specializing in stocks and real estate. His net worth is estimated to be around $230 million. According to Forbes’ most recent NBA team valuations, the Bucks are the least valuable.
Notable Team Achievements: Since 1985 the Bucks have reached the playoffs 13 times. Twice they reached the Eastern Conference Finals and two more times they lost in the second round.
Ownership Philosophy: The Bucks are, for the most part, forced to be fiscally responsible because of their situation. They don’t own the Bradley Center – the state does – and they get only a percentage of ticket sales and concessions. Senator Kohl does not have the deep pockets to lose money, so if the Bucks make bad decisions they are forced to deal with him. Kohl stays in the background when it comes to running the team.
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