Tom Gores is now finally, officially, the owner of the Detroit Pistons.
The terms of the sale had been in place a couple months but details still had to be finalized. They have been now. David Stern announced before Game 1 of the NBA finals the sale of the franchise to Gores and his equity firm had been approved by the Board of Governors (the other owners).
“We are delighted that the NBA’s Board of Governors approved Tom Gores’ purchase of majority ownership of the Pistons,” said NBA Commissioner David Stern. “We look forward to the Pistons’ continued growth, both on and off the court, under his leadership.”
The rest of us look forward to something now happening regarding coach John Kuester.
Gores was born in Israel, was raised in Flint, Michigan, went to Michigan State, and started out selling computers in the state. He eventually moved to California where he founded Platinum Equity, which is a power in the leveraged buyout business. At age 46, he is worth an estimated $2.4 billion.
It is Gores and Platinum Equity that purchased the team as well as the Palace of Auburn Hills and DTE Energy Music Theatre. The team had been owned by Karen Davidson, who took control when her husband Bill died in 2009 and she had been trying to sell the team since then. The price is estimated to be more than $400 million.
Pretty much every talent evaluator, general manager and coach not in the playoffs is in Chicago right now for the NBA’s Draft Combine.
Not the Piston’s embattled coach John Kuester. Which seems to speak volumes to his status with the franchise.
But Kuester told the Detroit News he will be running individual workouts heading up to the draft. Those will start over the next few weeks, giving teams considering a player a closer look at what he can do.
That certainly doesn’t mean his status with the team is safe, especially once the sale of the Pistons to Tom Gores goes through. But the sale of a team is a tedious, long process and draft preparations cannot wait. So Kuester will be around, but likely have little if any input in who the Pistons select.
The Pistons have picks No. 8 and 33 in the draft.
This has happened twice now.
First the representatives of Pistons owner Karen Davidson — who has tried to sell the team for the past 15 months after the passing of her husband Bill — entered into exclusive negotiations with Mike Ilitch to sell the team. But after he got a closer look at the books his offer price came down and the talks fell apart.
Now Davidson and Citi Private Bank are negotiating with Tom Gores, and again the process seems to have stalled out. The Detroit News reports that things are not going well.
In fact, some close to the negotiators say that not only is no agreement imminent, Karen Davidson’s fatigue and frustration are growing.
One source close to Davidson last week said the process is so utterly problematic, she feels as though she has lost control of it. Her concern, in part, is that while Gores continually requires more information, too few details of an agreement are in place, despite more than two months of exclusive negotiations.
While the NBA is looking for a purchase price that reflects its valuation of the franchise, $420 million, the negotiations have yet to yield a path to that price or one more agreeable to Gores.
There are a lot of moving parts here — it’s not just the Pistons but also the Palace at Auburn Hills and some entertainment venues nearby that are involved in the sale.
But the problems with the sale leave the team in limbo.
The Pistons made no moves at the trade deadline. They have not moved players or fired coach John Kuester even though there is clearly friction between the two sides. Detroit the team needs to be torn down and rebuilt from the ground up (although some pieces like Rodney Stuckey and Greg Monroe are in place) but that is not happening.
And until there is an invested owner, nothing much is going to happen. Which means nothing much is going to happen soon.
Soon, the Detroit Pistons will have a new owner.
And with it maybe a direction for the franchise.
Billionaire financier Tom Gores has reached a deal to buy the team, according to the Detroit Free Press.
The total value of the deal, which includes the team, the Palace of Auburn Hills and DTE Energy Music Theatre, is expected to be announced at $420 million. That doesn’t mean Gores will pay that much immediately, though. Current ownership is expected to retain a minority stake of perhaps 10% for up to several years.
Representatives for Gores and the Pistons declined immediate comment.
The sale has one more big hurdle to clear, the NBA Board of Governors (the other owners) needs to approve the purchase. Which they will. They will meet during All-Star weekend but it is not known if this sale will be discussed at that time.
Gores is the founder, chairman and CEO of Platinum Equity, a firm that buys distressed companies, turns them around. Platinum currently owns 30 companies in a wide range of industries. Forbes estimates he is worth $2.2 billion. He is a Michigan native who attended Michigan State.
The Pistons have been owned by Karen Davidson, who took control of the team when her husband Bill passed away in 2009. She has been trying to sell the team for more than a year.
We told you yesterday Michigan native and billionaire Tom Gores was now the front runner to purchase the Detroit Pistons.
The Associated Press is now reporting he has a 30-day exclusive window to purchase the team. If a deal is worked out, it could be presented to the Board of Governors (the other NBA owners) for approval All-Star Weekend.
But the deal is not finalized. Mike Ilitch was in an exclusive negotiating period when he got a good look at the Pistons books and dramatically lowered his offer.
We don’t know what Gores will offer for the team. While Forbes last estimated the worth of the Pistons at more than $400 million, the devastating effects of the national economy on Michigan, combined with the struggles of the Pistons team, have others estimating that the sale price will be well below Forbes estimates.
Gores is the founder, chairman and CEO of Platinum Equity. Gores and his firm make their money buying distressed companies, turning them around and selling them for a profit.
The Pistons are owned by Karen Davidson, who took control of the team when her husband Bill passed away in 2009.