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Deadline nears in sale talks for Wizards
"It's important that you all know that Mr. Pollin was very careful and wise when he planned for this day," according to the memo, a copy of which was obtained by The Washington Post. "He put a specific transition plan in place, so that, when this time came, there would be an orderly transition.
"When Ted Leonsis and his partners purchased the Washington Capitals and a minority interest in Washington Sports & Entertainment Limited Partnership in 1999, Mr. Leonsis was also granted an option to purchase the remainder of Mr. Pollin's interests in Washington Sports," according to the memo. "At the time of the 1999 purchase, a process was established for the exercise of this purchase option. That process will begin now and it will move forward as expeditiously and prudently as possible while respecting the Pollin family."
The transaction is expected to be closely watched in professional sports circles because the price could influence the value of NBA franchises.
Both sides have hired investment bankers to advise them. Leonsis retained Steve Greenberg of Allen & Co., a New York boutique investment bank. Greenberg's portfolio includes working on the sale of baseball's Milwaukee Brewers in 2004 and the sale of the NBA's Cleveland Cavaliers in 2005. Greenberg declined to comment.
The estate's trustees -- Pollin's widow, Irene; their son, Robert; and Abe Pollin's longtime attorney, David Osnos -- have hired Goldman Sachs.
While negotiations continue, Washington Sports has installed a management structure that makes Irene Pollin principal owner. Robert Pollin is chief executive. Another son, James Pollin, is president. Osnos and Richard Brand are legal counsels to management.
When Leonsis bought the Capitals, according to interviews at the time, it was agreed that he would have 10 business days from the day discussions began to reach a deal. That means he has until the end of the day Wednesday to reach agreement on a price with Pollin's trustees.
If the two sides do not agree to extend the talks, each side selects an appraiser to estimate what the building and team are worth. If the two appraisers cannot agree on the value for the team, they together pick a third appraiser.
Leonsis can then agree to pay the amount set by the third appraiser, which would also bind the Pollin estate to sell at that price. If Leonsis passes on the third appraiser's price, the Pollin trustees can put the team up for sale on the open market. But Leonsis would still have the right to match any outside offer. He could also sell his 44 percent of the Wizards and Verizon Center to the new buyer.
Through a spokesman, Leonsis declined to comment.
"If Lincoln doesn't pay their price, [the Pollin trustees] can go out and test the market," said an ownership source from the NBA, who spoke on the condition of anonymity because the person was not authorized to speak about the matter.
The sale of the team must be approved by a three-quarters majority of the NBA's 30 owners, which means 23 votes to approve. A spokesman for the NBA declined to comment.