????In 2005, private equity firm Bain Capital offered to buy all 30 National Hockey League teams for $3.5 billion. The league was in the midst of a season-long player lockout, after claiming $500 million in losses over the previous two years. But most team owners weren't ready to turn over their keys, quickly rejecting Bain's offer and eventually restructuring on its own (including the implementation of a salary cap).
????It was the first and last time that private equity had bid on an entire U.S. sports league. But, team by team, it slowly seems to be taking over the National Basketball Association.
????The latest example is in Philadelphia, where Apollo Global Management (APO) co-founder Josh Harris yesterday agreed to buy the 76ers for a reported $280 million. His partners include David Blitzer of The Blackstone Group (BX) and hedge fund manager Art Wrubel.
????"We are honored to have the opportunity to be affiliated with this storied franchise," Harris said in a prepared statement. "As a basketball fan who attended college in Philadelphia, and with family roots here, I have always felt a strong connection to this City and the 76ers."
????This is the fourth time in recent years that private equity executives have purchased an NBA team. The first was in 2002, when the Boston Celtics were acquired for $380 million by a group led by Steve Pagliuca (Bain Capital) and Wyc Grousbeck (Highland Capital Partners). Minority partners on that deal included Glenn Hutchins (Silver Lake Partners), Michael Marks (Riverwood Capital) and Jim Breyer (Accel Partners).
????Next up was the Golden State Warriors, acquired last year for $450 million by venture capitalist Joe Lacob (Kleiner Perkins). Lacob actually was a minority owner in the Celtics, and beat out fellow Celtics investor David Bonderman (TPG Capital) for the Bay Area club.
????The Toronto Raptors are controlled by the private equity investment arm of Ontario Teachers' Pension Plan.
????Most recently Tom Gores and his firm Platinum Equity purchased the Detroit Pistons, in a transaction marked by its unusual structure (the team technically is majority-owned by the firm, but since Gores controls the firm...).
????Now we have the Philadelphia 76ers going to Harris, and I've heard word that another group of PE execs is beating the bushes for their own NBA franchise. Not quite the bold front-door takeover that Bain had envisioned for the NHL, but the backdoor seems to be working just fine for the NBA.
