The Milwaukee Bucks aren’t going anywhere. Sen. Herb Kohl, who bought the team for $18 million in 1989, has sold the organization to a hedge fund group headed by Wesley Edens and Marc Lasry for a total purchase price of approximately $550 million. There is a catch: They must keep the team in Milwaukee.
“My priority has always been and will continue to be keeping the Bucks in Milwaukee,” said Kohl. “This announcement reinforces that Milwaukee is and will continue to be the home of the Bucks. Wes and Marc agree, and they share my commitment to the long-term success of this franchise in Milwaukee.”
Making sure the team remains in Milwaukee isn’t a surprise. The surprise is the $550 million price tag. As of January 2014, Forbes valued the Bucks at $405 million – dead last among the 30 NBA franchises – and noted that an “average of only 13,000 households watched Bucks games last season on Fox Sports Wisconsin, which was the second smallest audience for games behind the Charlotte Bobcats.” The Bucks were also the worst team in the league last season and have the best chance at winning the lottery for the first pick in the 2014 draft.
Marc Lasry’s firm currently manages $12.8 billion in assets. In 2008 Forbes listed Wesley Edens’s net worth at $1.2 billion. These are not neophytes when it comes to return on investment yet the duo paid 35.8 percent over sticker for an NBA franchise that stinks so bad no one watches them.
So what could the Washington Wizards be worth?
Ted Leonsis bought his first stake in the DC franchise for $115M in 1999 and acquired the remaining 56 percent stake for $310 million, according to reports. That’s a $425 million investment for a team Forbes values at $485 million.
But now the Wizards are a playoff team for the first time since 2008 and face the Chicago Bulls on Sunday as the fifth seed in the East. Just going by the premium paid for the Bucks, some back-of-the-envelope math using Forbes’ valuation would have the Wizards valued on the open market at roughly $658 million.
Of course, it is unlikely Washington’s NBA team is for sale, however, I hear the hockey side of things is going through a bit of a bear market.
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