A family disagreement over the Celtics‘ rising payroll was behind Wyc Grousbeck’s decision to put the majority stake in the team up for sale, sources tell Josh Kosman and Brian Lewis of The New York Post.
Ninety-year-old Irving Grousbeck controls about 20% of the franchise and is unwilling to absorb the projected financial losses that will be necessary to keep the team in title contention, according to Kosman. After winning the championship in June, Boston handed out several new contracts that will bring the total cost of the roster for the 2025/26 season to about $500MM in salary and tax payments.
“That’s what happens when dad puts in most of the money,” a source told Kosman.
Kosman cites another source close to the sale process who says the team is projected to lose about $80MM this season. That amount will be much higher in the following season when repeater tax penalties become harsher.
The Celtics handed out a record-setting contract to Jaylen Brown last summer, and then topped that with a five-year, $314MM super-max extension for Jayson Tatum in July. Jrue Holiday also received an extension and several players were re-signed, pushing the total 2025/26 team salary north of $225MM and setting up a projected $280MM luxury tax payment.
“Wyc says we’ll spend whatever it takes, but dad wasn’t into losing money,” another source told Kosman, who hears that the team barely broke even last season while winning its 18th NBA title.
The Grousbeck family claimed it was unloading its share of the team for “estate planning purposes” when the surprise announcement was made in early July. Wyc Grousbeck reiterated that stance in a statement to Kosman.
“The Grousbeck family is selling the team for estate and family planning considerations. To say the sale is in any way related to losses is completely incorrect,” he stated. “There has not been a capital call from ownership, or any additional investment of any kind, in the 22 years since Boston Basketball Partners bought the team and we don’t anticipate there being one.”
The NBA is hoping to have the Celtics valued at a record-setting $6 billion for the sale, but there are complications in reaching that figure. Sources tell Kosman that the team’s projected losses and the fact that it doesn’t own TD Garden to provide revenue from other events could make prospective buyers reluctant to bid that high.
The Grousbecks are hoping to sell a 51% stake either later this year or early in 2025 and then continue to run the team until the full sale is completed in 2028.
There has been little movement toward a sale in the two-and-a-half months since the Grousbecks announced that the team was available, according to Adam Himmelsbach of The Boston Globe. Banks helping with the transaction are still reviewing the team’s assets and liabilities to provide an accurate report for interested buyers, which Himmelsbach says is typical in this type of transaction.
Oh the whims of those with too much money abd not enough sense…
“losing money” is being viewed in incorrect context here, the franchise’s overall valuation will always dwarf any year end losses. This man is an idiot.
Lmao I really hope you’re joking
Teams shouldn’t be punished the same for paying homegrown players. The fact that they drafted Brown and Tatum should be rewarded not penalized. The other players, I get. It’s similar to what happened with OKC. That teams would have 5 championships by now if they could have afforded to keep all their players back in the day
Hey there bud. The Celtics aren’t being financially punished for Brown and Tatum. They’re being punished for everyone else they put around them. It really isn’t that crazy of a concept. The league is dying to expand and stacked rosters like what they have in Boston or OKC prevents that. Welcome to reality. Grab a seat and learn something.
Bigeasy , Celtics (or, it sound like, Wyc) is spending on players that is WAY beyond the team’s financial means, indeed, WAY beyond the limits that the league has set with new aprons.
Wyc lost $85M this year, and will lose $225M this year. And he has obligated the Celtics to a still greater loss in 2025-26. It makes no sense.
They have the he highest payroll by far Rd in the league ovWhen you lose $80M and
Imagine being a 90 year old billionaire and being that concerned about a financial loss.
Imagine looking at someone who’s made billions of dollars and being confused why they dont want to gamble $80 million.
Some people are destined for a life of financial hardship. Good thing FanDuel exists right?!?
He’s 90 and worth $2B. His kids want to continue the legacy and are fine losing money that’s going to be theirs any day now.
How interesting. You seem to not only know a lot about Irving Grousbeck, but also know the motives of his children!
They’re on the record lmao it even says what Wyc wanted in the article. Just Google it if you want to know more. Not sure why you’re so pressed about this, replying to everyone in the thread lol
I reply to people like you who sees someone has a lot of money and just inserts your own lack of monetary care or urgency and can’t fathom why someone who’s already rich doesn’t like to lose money.
It’s a very eat the rich tone. Very victimized point of view. Very “im waiting for an inheritance I haven’t done anything to deserve”. THATS why I reply.
It’s always so weird to me when posters’ make inferences about others’ financial statuses on here. If I told you I was wealthy, you wouldn’t believe me. If I told you I sold 10,000 shares of a start up at 15x the price, you wouldn’t believe me because you’ve already made up your mind that I’m “eat the rich” and waiting for some imaginary inheritance when my only point is he’s 90, almost dead, and can’t take it with him. If he was 70, I wouldn’t have posted a thing lmao
So because you believe he’s going to die tomorrow you’re deciding his beliefs for him. Thats the whole point here bud. You’re suggesting his kids are hoping and praying their father dies any day now because they stand to gain financially.
It’s sick. It’s praying on those weaker than you for your own gain. You’d make a great owner lmao.
Lmao stop stretching things, bonercats. I never once suggested they hope he dies lol. I’m convinced you’re trolling now simply based on the mental gymnastics it takes to get to thinking that. I’m also not deciding his beliefs for him, I’m just saying it’s crazy to not want to spend your money that you can’t take with you when you have limited time! That’s what it’s for. You’re thinking way too deeply about an innocuous comment.
And yeah, I would make a fan-friendly owner for sure because I like to spend my money since it’s that’s what it’s for. That’s why we’re putting in a pool next spring! I’m glad you’re so concerned for him though!
You support a 100% Estate Tax then, right?
myaccount2 , you don’t need to know the family or have inside information to understand why you’re wrong.
Every NBA franchise must be operated to be profitable. It’s part of the NBA charter. The Celtics lost $80M this year, and based on public financial information that indicates revenues and to try Al business expenses, will lose ~$225 this season and $400M the next. (Read about the repeater and multiplier penalties if you don’t understand why.)
You’re wrong when you say that the family is fine with losing money. Rather, the family has a fiduciary duty to any new owners to run the team profitably. Do you really believe there are investor syndicates looking to invest $5B into a business that is built to lose money?
You aren’t telling me anything I don’t already know lol but what your post is implying is that Wyc doesn’t understand that. I think Wyc knows what he’s doing just about as well as Irv does.
myaccount2 , I was responding to your earlier statement that Wyc and siblings don’t care about losing money, and your apparent lack of understanding as to why the Celtics’ current ownership has committed to massive future oblgations (hundreds of millions of $) that it can’t honor.
The reason is this: Wyc believed that those large future contracts would increase the valuation in the eyes of the new majority ownership. The national news media is reporting that this is NOT the case. The Celtics valuation is significantly lower than what Wyc proposed 2 months ago.
I think you need to tell that to the San Diego Padres ownership then. They lost money in 2020, 2021, 2022, and 2023 then Peter Seidler died. Even though he passed, they will be taking their largest net loss in 2024, expected to be over $100M.
What do you have to say about that?
2 billion is not a lot when we’re talking about an $80 million loss before and considerably bigger losses this year and the next. You people make it sound like the guy is worth $20 billion.
Shea , you’re dead-on about the size of the losses not being sustainable for the existing owners.
But the bigger issue is that a majority/controlling interest in the Celtics is for sale, and the new ownership, which will put up billions, will be running the Celtics for profit… from the moment the deal is done. That’s why the news that the Celtics are running so heavily in the red already is such a big deal to the NBA.
The massive increase in the valuation of pro sports franchise, driven by digital media, means that when individual owners/families sell their controlling interest for billions of dollars, the new ownership is a virtually always a corporate interest driven only by revenue growth and profitability.
The fastest way to not be one is to not be concerned. He very well should be.
> Imagine being a 90 year old billionaire and being
> that concerned about a financial loss.
Billionaires don’t lose money, that’s the point. Dad knows that the value of the team is based on positive revenue flows.
The Son, Wyc, was naughty and told the world the team was profitable when it actually lost $80M in 2023-24, and will lose $225M this year.
Well obviously that’s how it works, but he won’t be around much longer and he can’t take his money with him lol his kids are fine taking the L, just keep it going.
You know Wyc doesn’t own the team but home there’s plenty of other investors what they are doing right now is crazy they shouldn’t of resigned all of these guys maybe 2 at max Jrue, Kristaps,Pritchard and White it’s sux because I’m a big fan of all of them but not getting revenue from the arena really hurts their profit line it’s just the fact of life so some of those other investors want out because they will be operating at a loss for many years and there won’t be other owners willing to help bail them out unless you want to pay 1000 to 2,000$ ticket price for nosebleed tickets they have no real choice but to sell
They should donate their share to the homeless population of Boston and give the team back to the PEOPLE of the city
Imagine…you have no home in the middle of winter, but you could walk into td garden grab a hot dog and watch some basketball.
I dare you Wyc and Irving…I dare you
You mean the current fans aren’t homeless? They sure act like it
Celtics fans act like the homeless.
What a sick burn bro.
Crazy to lose money. On a year you win a championship. Salaries are out of wack. Don’t blame him. Celtics not worth that without the Garden.
I think they will sell. Ned’s new blood there.
Al , you are absolutely right that it’s crazy try I lose money, especially at $85M tgis year and $225M this year.
Despite what fans think about teams being run by billionaires that don’t care, no NBA team works this way. All teams care about being profitable (even Steve Ballmer says the Clippers have never lost money), and the NBA revenue sharing and CBA are designed to keep teams solvent.
This is a HIGHLY unusual situation, where young Wyc has not only lost $85M this year against his family’s wishes, but also obligated them to lose $225M more this season and much more than this the next season. The problem is that the Celtics as a financial entity does not have this cash on hand.
Ericthredd , I know you’re out there, brother. Like I said, there’s no free lunch. Party is over after 2024-25, at the latest.
It shouldn’t come as a surprise that Celtics are losing a ton of money, even though Wyv has been saying otherwise. All these figures are public for 2023-24: Celtics total revenues are $440M, payments to players plus all other OpEx totals $525M, so they lost $85M.
For 2024-25, the increase in penalties, due to luxury and repeater tax, jumps an extra $140M, for an annual loss of around $225M. Assuming the Celtics keep the players currently under contract for 2025-26, they’ll lose over $450M. Obviously, that can’t happen.
With a revenue base of only $440M, Celtics have no business being over the second apron. The new CBA makes it prohibitive for the Warriors to stay over the 2nd apron for 2 years and their revenue base is $800M.
Any prospective co-owner will insist on fiscal responsibility. That means:
– 2024-25, at $225M loss, will be the last year over the 2nd apron.
– 2025-26, with Tatum, Brown, and White making $160M as 3 players, Celtics must “reset”, and go under the 2nd apron, and will have to let go of Porzingis, Holiday, Horford, and, probably, one of Pritchard and Hauser. Other than their Big 3, the other 12 players can’t be paid more than about try $30M.
Knicks in (twenty) six
“Party is over”
They just won a chip dude and they have the most championships in history. I think Celtics fans will survive
aristotle, We knew all of this already so I don’t see what the big deal is here, like you said, all of these figures were public. The only “new” addition to that NYP story is somehow this just became a hit piece towards the Grousbeck family for some reason. This line made that evident…“That’s what happens when dad puts in most of the money,” a source told Kosman LoL
Again, these numbers were ALL public record, we’re just continuing the same debate from weeks ago.
Not that i want to get bogged down in an ongoing convo today over this, I’ll just add this to what all the doom & gloomers never seem to mention when predicting how this story ends for Boston over the next few years: 39yr old Horford comes off the books after 2024-25(this season) and Porzingis comes off after 2025-26.
If the team lets Al walk, they’ll save roughly 54M in salary/taxes(40ish if replaced with a vet min player.) If they let KP, alone, walk, they’ll save roughly 176M in salary/taxes that offseason.(160ish if replaced with a vet min player)(feel free to do the math, it adds up.)
Jrue will be 36yrs old that offseason and would likely be the odd guy out who’s traded off with 2yrs left on his deal. If Boston’s front office decides to retool their roster around a 28yr old Tatum,29yd old Brown & 32yr old White then I’m totally fine with that because they’re Boston’s three best players. I have full faith in Brad’s crew to find & build a less expensive support group for those three players.
erikthredd , hello there, my friend. I have the receipts.
I said: Celtics CANNOT afford the salaries committed to for 2024-25, and no way can they for 2025-26, and especially no way for years after.
You said: You’re wrong, the Celtics CAN.
I said: No, they CANNOT because their revenue base is too small and the CBA prevents even the wealthiest owners from going into the red.
You said: You’re wrong, the Grousbecks will do it.
Now everybody knows: It was a dream. Celtics are already in massive debt (will have lost more than $300M over 2023-24 and 2024-25 seasons), Celtics’ revenue base is too low, current roster will be broken up shortly.
My man, I hadn’t posted a single comment here in over two weeks and you’re over here calling out my name like I’m Beetlejuice lol.
Those aren’t receipts, that was just your interpretation of something I posted over a month ago. Just like my last interaction with you where I complimented Steph’s career in GS and you somehow turned it into Kendrick Perkins & his “You hate us because you ain’t us.”
I never once denied anything about Boston’s financial situation in their near future. I only once said that I could see them keeping the band together an extra year and losing a 1st round pick down the road if they were still contending in the Finals. Anything after that is your delusion and I honestly can find a better use of my time than getting dragged into these endless debates with some of you guys. This is what its like interacting with some of you GS fans, You Are So High Maintenance, talk about beating a dead horse lol. Yeah we know already, Boston is going to have cap issues in their very near future.
I won’t be replying again in this thread so you can do or say whatever you want after this, Judging by the amount of comments you already have in this thread, you clearly want to talk about this topic and I could not care less aristotle.
Erikthredd, our convos were more than a month ago, and I enjoyed them very much. You made thoughtful, interesting points back then.
Back then, I said, “time will tell, let’s us two guys revisit this in 1 year”.
I’m here 11 months early to say “I told you so.” I get things wrong as much as the next guy, and like to think I’ll admit it when that’s the case. But hope our paths cross again.
“our convos were more than a month ago, and I enjoyed them very much.”
I enjoyed them too, up until you started misconstruing my posts and turning it into this weird GS vs Boston ego trip. Calling me out out of the blue just proves this even more.
Again, I am fully aware of Boston’s financial future and nothing from this article about the NYP story has changed anything for me. I have never denied any of what you have said in the past or are saying today. YES, Boston’s front office has their work cut out for them going forward. Again for the umpteenth time,I am fully aware of their situation.
I live 20mins from Boston and we have two local Sports talk radio stations and an endless amount of locally created sports content users that have largely covered this entire topic, ad nauseam, so hearing it all again here is not something new, at least not for me.
My last thought on this is,can we stop acting like this will somehow be Boston’s demise going forward? As long as Tatum & Brown are on the team, they’re going to contend. They’re currently 26 & 27 years old and locked up for the foreseeable future. Plus they both now have the huge weight of unfulfilled expectations completely off their shoulders with having just won the Finals. Regardless of which players surround them, I’ll take that duo over any other in the NBA going forward.
I had planned on taking a break from this place until the season started because I didn’t feel like butting heads repeatedly over the same few topics and you got me back here arguing something from a month ago lol. You win, i’m officially tapping out after this. It’s my respect to those convos we had that I am replying now. My last comment was probably harsher than it should have been but when you’re hitting me with a month old “I told you so” that’s what you get lol.
erikthredd, my apologies for making this “personalized”. It wasn’t my intent. The problem with this medium is that folks, myself included, don’t realize when they are doing that.
We also don’t get the benefit of being able to converse through DM here like most other sports related comment boards. There, you can end most interactions in a amicable manner.
I’m just really looking forward to the season starting up already. If Boston’s time with this current roster iteration is coming to an end in the near future, then I’d like to enjoy watching this crew while I still can.
erikthredd said:
>We knew all of this already so I don’t see what the big deal is here,
> like you said, all of these figures were public.
That’s incorrect, we did NOT know all these numbers, nor did I say so.
We DID know:
1. Revenues,:$440M
2. Effective player obligations, including tax and penalties: > $300M
We DID NOT know:
1. Celtics lost $8M
2. Celtics operating expenses, exclusive of payroll > $200M
Now we know that Celtics are already in the red. We all assumed otherwise before.
Aristotle, with more content coming out today after that NYP story got posted yesterday, it seems that a lot of numbers getting thrown around right now aren’t completely accurate, in a sense. There are quite a few comments in this thread pointing out Boston lost 80-85M this season, like it says in the article above, but that “this season” means this upcoming season of 2024-25 that hasn’t even started yet, not the season where they just won the Finals.
Secondly,everyone that keeps pointing out that potential loss of 80-85M are completely ignoring the fact that Boston will also gain a large chunk of revenue after having won the Finals with merchandise sales,additional ad revenue and likely hikes in ticket pricing.
With their salary structures as high as they are, their finances will definitely be starting in a hole but it won’t be as bad as its being reported especially in these comment sections. Another deep playoff run or even going b2b will lessen those losses considerably. I know, there’s no guarantee of that happening but it needs to be mentioned here.
This is smart because Silver will not give them the championship this year. Probably Dallas or someone that hasn’t won it yet will be handed it.
And players still think they should be paid more.
Factually the owners dont deserve more of the money
Great time to sell, generally, and probably the perfect time from the Old Man’s perspective. If the Kid’s want to continue with the venture, because it’s such a great investment going foward, then they should buy him out. Obviously, they don’t believe that, or at least they don’t believe it to the degree that they’re willing to wager their own money on it and/or that they can convince other investors to join them in doing it.
Too many NBA fans don’t understand the economics of sports franchises. NBA teams, like most sports franchises, are vanity assets that don’t make operating profit at anywhere near the levels that their asset price would normally require. Their only economic virtue is anticipated asset appreciation, which historically has been there, although unevenly. But, even if the purported value skyrockets on cue, the franchise still needs to be sold in order to realize upon it. So, a sale, at some point, is always part of the franchises valuation. The NBA’s luxury tax system puts all of this on steriods. It can easily convert nominal operating profits into significant operating losses, which need to be funded from outside sources.
DXC, so let me ask you this, when guys go in to buy a NBA franchise, are they coming in with cash or are these things generally financed?
I can imagine that with the Limited cash flow you mention, that servicing loans like these would be tough? So I’m guessing that these guys are coming in with cash?
I love your point about “vanity assets.” Makes total sense. But I do think there’s some owners who finance their lifestyle with the team’s income. The Buss kids in LA for instance. But then you have the Warriors and the Clippers owners who are already gazillionaires and they can pour money from the team back into the team.
I’m more familiar with the NFL, but I don’t think it’s that different. I’m sure traditional financing (from banks) can’t be a significant factor, both because the low net operating income to purchase price ratio and because the NBA won’t permit the ownership interest to be loan security. Preferred equity and the like is more common, and the more desirable from a majority owner’s perspective. The hard part is enticing minority owners to join. They’re subject to the same pre-sale economics, but with less liquidity, and their vanity is served nearly as well.
The net operating income for most teams in most years is still positive and significant, it’s just not what one would expect from a multi-billion dollar investment, or close. Most people could live nicely off it. Still, owning an NBA team is probably a great generational investment for a billionaire with net worth at least 2.5 to 3.0 times the price of the team. From an investment standpoint, the team should ideally be the most speculative, highest risk-reward, part of their portfolio.
DXC, Virtually everything you say is incorrect in 2024. There are several popular misconceptions here, but I’ll try to cover a few.
“Vanity asset”. NBA teams, like NFL teams, may once have been vanity assets, but they’ve been extraordinarily profitable investmerns for the past 15 years, with average annual revenue growth is projected at 34% for the next decade. Valuations of all pro sports teams track the growth of digitial media. Ownership of any size, by individual or corporation, yields profit.
“A sale is always part of the franchise valuation”. When individuals (like, for example, the Grousbeks or Chris Cohan with the Warriors in 2011) “cash out”, the ownership is recapitalized into shares that are “liquid”, as in, the shares can be sold to other entities at an increased price. This is how Joe Lakob and his syndicate of multiple VC’s turned $400M into $7 Billion. The Warriors now have at least 15 shareholders with the ability to sell their shares in the future.
“even if the purported value skyrockets on cue, the franchise still needs to be sold in order to realize upon it”. I’m not sure what you mean by “purported value”, but a franchise’s valuation, as with any asset, is priced according to the net pressent value of its future cash flows. Any pro sports franchise can be be priced accurately within a 10% margin using public information. There’s no mystery to any of these numbers.
“The NBA’s luxury tax system puts all of this on steriods. It can easily convert nominal operating profits into significant operating losses, which need to be funded from outside sources.” No, there are no “outside sources” involved. The team as a financial entity must put in reserve the future obligation within a short period of time that it’s incurred.
Any pro sports franchise, like most all financial entities, must place in reserve liquid assets to cover the contractual obligations it enters into for the immediate future, including any ancillary and tax obligations. This is exactly the problem that the Grousbecks face at the moment. At $440M of revenue, the Celtics lost $85M this past year. By obligating to contracts that lead to losses of ~$225M this 2024-25 season, and hundreds of millions more in 2025-26, the family has to tie up that amount of cash to cover it in the Celtics business entity to keep it solvent.
No, I’m sorry, it’s all accurate. You’ve said a couple of things that would be right in the correct context, but overall you’re quite off.
Real investment analysis is prospective, and its done based on assumptions of future net cash flows, and the analysis is valuable only to the extent that those assumptions are sound ones. Obviously, actual future outflows and inflows are not readily available in the present. Sports teams are all vanity assets (which just means that its an asset with ownership benefits beyond economic ones), although that doesn’t mean the asset can’t also project as a good investment. Sports franchises just won’t, unless the analysis is contaminated by a speculative assumption about a future sale price.
I’m not sure what your point is on reserves. If you buy a franchise for a purchase price 2 bb, and, thereafter, the required outflows for any year exceed the inflows for that year, that negative cash flow needs to be paid from sources outside of the purchase price. That there may be some reserved cash to pay them is meaningless. That reserved cash was either purchased with the team, or was taken from prior positive cash flows during your period of ownership.
DXC , This recent story and interview with Wizards owner Ted Leonsis, won’t help you learn economic basics, but it will help you understand this topic:
“Owning a sports franchise—the most exclusive item in the billionaire trophy case—has become a vastly more profitable enterprise in recent years. Private equity firms, sovereign wealth funds, and celebrities are all fighting for ownership stakes. WHAT WAS ONCE A VANITY ASSET IS NOW A MASSIVE GLOBAL BUSINESS…”
link to puck.news
My God, you’re a feeble minded little man. LOL. It took ages, but the last sentence of your post below was your first coherent thought on the site. Follow its edict more often, and you’ll at least be less annoying, if no less mindless.
DXC , Personal attacks are not my thing, but perhaps you’ll feel differently when you understand that your stated definition of a “vanity asset”, on which your entire argument rests, is the opposite of its formal definition and common use.
DXC said:
>
Sports teams are all vanity assets (which just means that its an asset with ownership benefits beyond economic ones), although that doesn’t mean the asset can’t also project as a good investment.
>
Again, that’s exactly the opposite a vanity asset. Here’s the correct definition, with citation.
“A vanity asset is an asset acquired and held primarily for non-monetary benefit, such as status or prestige… If the asset is held primarily for it’s real economic return, it may not be classified as a vanity asset.”
In other words, if a sports franchise is expected to be profitable, it cannot be called a “vanity asset”.
link to amazon.com
Assuming that’s the definitive definition, I guess it turns on the word “primarily”. If I bought a sports franchise with money I could have used to buy an investment that would have yielded 3 x NOI that the sports team yields, then I wouldn’t be insulted if an interested party accused me of buying the vanity asset over the better one. In my mind, I did, although I might bring up the sports franchise has the better chance of hitting a home run on re-sale. You’re saying that since the sports franchise is still profitable, it’s not a vanity asset, period. I don’t read even this definition that way, but I’ll throw it out there.
DXC, I’m not going to respond because this POS try shows the same level of financial sophistication as your first.
We can let any interested reader judge for themselves.
The old man’s eyesight are likely poor by this time, but he sees the writing on the wall.
If winning a chip brings with it significant losses, then it’s simply unsustainable …. you can cut costs, shed salaries, lose talent, lose in the playoffs, gain the ire of fans and media everywhere.
Outside of Jackie Moon, most team owners are about business first and hoops a far second.
He wants to secure his family’s fortune, come out on top. Good move.