Pistons may sell for well below market value


Thumbnail image for pistons_logo.pngLocation, location, location. Oh, and timing.

Golden State just sold for well above its value as estimated by Forbes, in part because the San Francisco Bay Area is one of the wealthiest areas of the nation.

The Detroit Pistons are estimated to be worth $479 million and have turned more than $40 million in profit the last three seasons. It as well run a franchise as there is in the NBA, with a fantastic brand name.

Yet the sale price may be $100 million or more below that estimated value, according to a report in Forbes today.

But location and timing are critical factors to consider.  As it relates to location, the Detroit MSA faced a 15.4 unemployment rate as of June 2010 compared to the national 9.5 rate.  This would cause any potential investor to seriously question whether fans would continue to support the team at the level of avidity they have historically, especially given that the team is in major rebuilding mode and not likely to challenge the current Beasts of the East (Orlando, Boston, Miami) anytime soon.

Furthermore, in light of the climate of ‘guilt’ that surrounds corporate spending on sports sponsorships (especially in a city whose main industry has been the beneficiary of significant TARP money), a prospective buyer would be justifiably anxious over the likelihood of short term corporate support (e.g. buying luxury suites, paying for facility signage, etc…).

Karen Davidson also owns the Palace at Auburn Hills, where the Pistons play. The team and the building may be sold as a package.

Still buyers are leery. Any investor coming is has to be wary of the almost-certain lockout coming next fall — you will be getting no income from the team next fall (and have reduced expenses, but still). The economics of the NBA may be friendlier to owners on the other side of that lockout, but the down time has to be taken into consideration.

Still, Bill Davidson bought the Pistons in 1974 for $8 million (Forbes says that counting for inflation that is $28 million in today’s market). Even if the team only sells for $350 million that is a tidy little profit.

Report: Mavericks may be team interested in Larry Sanders

Larry Sanders
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The Dallas Mavericks are looking for a center— desperately at times, they brought JaVale McGee into training camp to get a look. They will start Zaza Pachulia and behind him it’s probably Samuel Dalembert once he gets healthy.

Which is why Dallas may be the team interested in Larry Sanders — Mark Cuban is a guy known for giving second chances in the league. But there have been no talks, yet, reports Tim MacMahon at ESPN.

Larry Sanders has been out of the game since his buyout last February trying to deal with his personal demons and may well not be ready to return. He may never return.

His couple seasons with the Bucks were filled with drama and issues. There was the nightclub brawl left him with an injured thumb in need of a surgery. There were the charges of animal cruelty. There was a five-game drug suspension. There was missed time for personal reasons. There was the 10-game suspension for marijuana use (he failed at least four tests to get there) — then that suspension was extended past the 10 games. In the end, he agreed to a buyout to get space away from the game to deal with his personal issues.

He may or may not be ready to return from that. He may or may not ever be ready. But if he decides to give it a try, NBA teams will be waiting. Maybe Dallas.

PBT Extra bold prediction previews: Can Thunder win 60 games?

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Kevin Durant, Russell Westbrook, and Serge Ibaka are healthy — just how good will the Thunder be?

The bold prediction in this PBT Extra preview with Jenna Corrado is that the Thunder will win 60 games, something they have not yet done. I wouldn’t bet on them hitting that number — with a new coach, and them making sure Durant and Westbrook get rest coming off injuries, plus the fact they’re in the deep West, that number may be high.

I think they have a better chance to come out of the West than win 60 games. I think they have a good shot to come out of the West.