A few weeks ago, Bill Chisholm told partners at his private equity firm that he was going to buy a basketball team. It wasn’t just any basketball team, mind you – it was the Boston Celtics.
The partners at his firm, Symphony Technology Group, were concerned. Where would he get the money? Surely not from their smallish PE fund based in Menlo Park, Calif., with just $10 billion in assets?
His answer was emphatic: He and his investors — a slew of rich dudes as well as another, larger private equity house – had put together the money even if most of it isn’t his. And as of last week, Chisholm is said to have convinced skeptical partners at Symphony that he actually can buy the Celtics in a record-setting, $6.1 billion deal.
Yet, nearly a week after revealing his stunning bid, he has yet to convince many in the sports business world, on Wall Street and even among his dealmaking colleagues in Silicon Valley. Symphony is known for mid-sized buyouts and investments. Chisholm himself is scarcely known on Wall Street or in the sports business.
Then there’s the strict rules for buying a team imposed by the NBA.
A prospective owner – or so-called “control person” – must come up with cash, not debt. It must be 15% of the deal price, half of which needs to be delivered immediately, and the other half in three years’ time. That means Chisholm would need to plunk down at least $450 million in cash now, and the rest later – no small chunk of change for anyone who’s not a billionaire several times over.
For comparison, buyout baron Josh Harris, one of the co-founders of PE giant Apollo Management, set the previous record price for buying NFL’s Washington Commanders for $6.05 billion. He’s worth more than $10 billion.
Other nagging questions linger. Chisholm lives in California, not Boston. He isn’t even a season ticket holder. (An associate says he grew up in the Boston area and watches nearly every game on TV).
One NBA owner told The Post “I have no clue who he is.” A banker who knows him from Silicon Valley deal making says: “This doesn’t add up.”
One of those skeptics also appears to be Steve Pagliuca, a senior adviser to the giant PE firm Bain Capital, and a minority owner of the team (Pagliuca did not return a request for comment).
“Pags,” as he is known locally, is a voluble presence on the Boston sports scene. Recently, he tried to throw shade on Chisholm’s bid, posting on X that his own bid “was a fully guaranteed offer at a record price…we had no debt or private equity money that would potentially hamstring our ability to compete in the future.”
The Celtics, it should be noted, have one of the highest payrolls in the NBA, and high debt levels from the new owners could make that difficult to meet.
The 56-year-old Chisholm declined to comment on any of this. But people who know Chisholm and bankers representing the current owners, the father-and-son team of Irv and Wyc Grousbeck, say he meets all of the league’s requirements.
One associate says he is worth close to $4 billion, the result of three decades of steady deal making after leaving Dartmouth to embark on a career in private equity. He told his partners in the meeting a few weeks ago he plans to come up with $500 million in cash now and $500 million later to meet the league requirements, sources confirmed to The Post.
Bankers, meanwhile, say his bid fairly bested marquee names in the business of sports – including Pagliuca.
Chisholm hired Goldman Sachs to assemble his equity team, but also worked closely with Grousbeck’s formidable banking ensemble: Gregg Lemkau, the long-time Goldman Sachs dealmaker who now runs BDT & MSD Partners; and Mary Erdoes, the powerful head of JPMorgan’s wealth management business.
“Mary would never give the greenlight to this unless he has the money,” said one top JPMorgan executive with knowledge of the matter. A person close to Lemkau added of Chisolm: “His was by far the highest bid,” adding that “it’s financed” – Wall Street jargon meaning debt to pay for the deal is all lined up.
A person close to Chisholm denies that he put up any debt in the deal himself, though this person also declined to comment on any borrowing by other equity players. In addition to several investors who haven’t weren’t mentioned in the press release for the deal, Chisholm’s money includes a $1 billion-plus commitment from the PE firm Sixth Street, which is well known in sports circles. Sixth Street has the largest single investment in the team.
It doesn’t hurt to know that Lemkau, the banker repping the Grousbecks, and Chisholm go way back. Both are Dartmouth grads and played on the school’s soccer team together. People who know them say they’re not besties but they have stayed in touch over the years and remain friendly.
“There’s a lot of rumors out there about Bill’s bid, but it’s from parties with an agenda,” said one person close to Chisholm. “His money is real.”
Credit: Source link
