Canzano: Suns $4 billion sale tees up Trail Blazers
What will Portland's NBA franchise sell for?
Last month, Christie’s auctioned off 150 works of art from the Paul G. Allen Collection. The event lasted two days. Bidders from 19 countries participated.
Sales total: $1.62 billion.
The proceeds will go to charity, per Allen’s wishes.
Andrew Fabricant, a veteran art dealer, told CNBC: “This shows that for objects of this quality and rarity, people will spend whatever it takes to obtain them.”
Along those lines, a billionaire mortgage lender is reported to be finalizing the purchase of the Phoenix Suns. Mat Ishbia will reportedly pay somewhere near $4 billion for the NBA team, per Adrian Wojnarowski.
My first thought: Great. Now, what will the Trail Blazers sell for?
Nike founder Phil Knight and Dodgers part-owner Alan Smolinisky made a $2 billion-plus written offer to purchase the Blazers last summer. The offer was rebuffed by trustee Jody Allen, who issued a couple of statements through the team, including one that said: “An offer was made by Phil Knight. The team remains not for sale.”
We all know the Blazers will be sold. It’s what Paul wanted. His real estate was liquidated. The mega-yachts were sold. The art is gone. The sports franchises he owned will eventually be sold, too. And the Suns outcome nudges that process along.
Last summer, Forbes put Phoenix’s value at $2.7 billion in its ranking of NBA teams. That was good for No. 13 in the league. The Blazers were at No. 16 (valued at $2.1 billion). Knight’s $2 billion-plus offer wasn’t a total slap in the face. But it clearly won’t get it done anymore.
The Blazers have roughly 7 percent less in annual operating income vs. the Suns. They play in Portland, which is a smaller media market than Phoenix. There isn’t a WNBA team as part of the deal, either. I’m thinking the sales price for the Blazers just jumped to somewhere in the $3.1 billion to $3.5 billion window.
What I’m saying is, the sale of the Suns frames the next move for the Paul G. Allen Trust. But it’s not the only factor holding up the sale.
The NBA is in line for a media-rights windfall. The league is currently with ESPN and Turner Sports in a $24 billion contract that ends after the 2024-2025 season. Industry experts have forecast that the next deal could be worth $75 billion.
That figure will be baked into any sale.
It was why the Suns sold for such a high number. Also, just like the art collection, billionaires will pay out the nose for that aforementioned “quality and rarity.” There are only 30 NBA franchises in the world.
Beyond that, though, there’s an emotional attachment that Jody Allen and franchise vice chairman Bert Kolde have with the Blazers. The NBA franchise was Paul’s baby. Vulcan insiders told me frequently that Jody never really understood Paul’s fascination with the NBA and owning a team in Portland. She may have come around some, but she still feels far more tuned into his other major league sports franchise, the NFL’s Seahawks.
Kolde is a different story.
The Blazers franchise is divided into two distinct arms: business and basketball. The team president handles sponsorships, ticket sales and runs the business. The general manager handles the basketball operations side. The business side worked from offices at One Center Court in Portland. The basketball side camped at the practice facility in Tualatin.
They often operated independent of each other. It sometimes felt cumbersome and divided. But over the years they’ve shared a common source of frustration — Kolde.
He loves to be involved and fashions himself an expert on both subjects. Kolde enjoys attending games, being involved with personnel moves, and negotiating wins on the business side. When Paul owned the team, Kolde was in constant contact with agent Warren LeGarie, who funneled a line of his client coaches and general managers into Portland’s front office.
GMs Kevin Pritchard, John Nash, Steve Patterson and Neil Olshey were all LeGarie clients, for example. So was coach Terry Stotts and salary-cap guru Tom Penn.
Said one long-time NBA executive: “Warren is smart. He knew the way to get to Paul was to whisper in Bert’s ear.”
Kolde needs to let go if the Blazers are to be sold.
The Blazers need new ownership. They need an engaged, motivated owner who will serve as the caretaker of the franchise. The real estate is gone. The art has been sold. The yachts floated away months ago. It’s time for the NBA franchise to find some new direction.
$4 billion for the Suns?
That only helps the sale of the Blazers. It will fuel Paul Allen’s passion projects for generations. That’s what his trust was designed to do and his legacy is going to score a major victory when it all comes together.
Portland’s NBA franchise won’t sell for less than $3 billion now. I never took the initial $2 billion-plus offer from Knight and Smolinsky as a final offer. It felt more like an opening bid. This is a negotiation, after all. Also, their offer was very public. Anyone else find that curious? I wonder if it was leaked out of sheer frustration with the involved parties.
Fans know what I’m talking about.
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Au contraire, JC. That Suns sale hurts the chances of a near-term Blazers sale
Ishiba is not paying $4 billion. $4 billion is the enterprise valuation of the Suns & Merc (meaning, the value of 100% of the company). Ishbia is paying $2.4 billion for 60% of the Suns, which (crucially) includes the voting shares which are part of the 35% owned by Sarver
Point is, $2.4 billion was the price for control of the Suns
I don’t know what the Blazers ownership structure looks like, but if we are to trust your reporting (and I do), then 100% of Allen’s shares in the Blazers must be sold and donated to charity. (Side note: How mad must Allen’s former “contractors” be? All that time spent on his boats and all they got was payment for services rendered…)
If Allen owned 100% of the Blazers, that makes the buyer’s ask a lot tougher. It would be hard to see the team selling for even $2.5 billion, given what you reported about a team in a bigger market with more revenue effectively selling for $2.4 billion to Ishbia
Bottom line: There will be buyers willing to pay what Knight offered (and maybe a shade more), and on the other side will be Allen’s sister trying to sell for $3 billion+. It’s hard to see either side giving in to make a sale happen
John, I am no Twit, and my Face has never been Booked. How to I submit Mailbag Q's??