Post: Leonsis' Path To Ownership In Doubt
No no no no no no no no NO!
Leonsis still has the right to match any outsider's offer for the team (kind of like the team is a restricted free agent to him, to use a basketball analogy), but the two sides are supposedly $100 million apart, which is a pretty healthy sum of cash. Please work it out, guys!
UPDATE: Here's the Washington Post story that ran in the A section today. Thanks to RamV for the link.
over 2 years ago
Mike Prada
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Excuse my language
I’ve had it. Had a rough few days. This is absolutely fucking ridiculous. Can we just disband this team? It isn’t a real franchise. Trade everyone and get some dleague players – they will give more effort at least. Does any legal person know – can we get a class action suit together and get our season ticket money back? Gilbert should pay for them. How the hell can people be so stupid?
Don't fret, Little Prada
Ted’s being smart. The Pollins likely were always going to try to get the best price. And Ted likely knew that if he offered a high price to the Pollins, that would just mean he would be driving up the price that others would bid on the team. As long as Ted has the right to match any offers, he can just wait to see what those offers are (you are exactly correct to compare it to a restricted free agent situation), and he doesn’t want to do anything to drive up that price.
Worst news of past three years
Nothing would effect our competitiveness longterm more than Leonsis not taking on this team. Hopefully he’s just using the press to increase his bargaining power. If not, this is worse than losing Larry Hughes + Arenas’ knee + gungate + losing Rubio + losing Blair combined and increased by an order of magnitude.
by morethesamewiz on Jan 27, 2010 7:36 PM EST via mobile reply actions
Nothing to get worked up about
There’s no news here, and given how hard it is to value a sports franchise, especially in these economic times, $100MM is not very far off to be. It’s actually reassuing to me – this deal is going to get done.
The restricted free agent analogy is an apt one – unless someone comes in with a ridiculous offer Leonsis will match it.
One other thing...
I think the fact that the eventual buyer is only getting 56% of the franchise and facility is important, as far as the pricing goes.
The team's worth what, like $350 million
I believe that was the last Forbes estimate, and that was before the Arenas thing. In light of that, over $100 million does seem like a lot. It’s anywhere from 1/3 to 1/2 of the team’s total value.
You know you'll get devoured by Cheaney, Wallace, and Juwan Howard.
I don't understand what is reassuring about this
The possible developments that could have emerged were a) Leonsis and the Wizards reach a deal before the deadline b) Leonsis and the Wizards do not reach a deal before the deadline c) Leonsis walks away from the table and says he no longer intends to purchase the team.
Option C would never happen, because a businessman never unnecessarily limits his options. The realistic options were A and B, the latter ended up being the option that Leonsis took. In all reality, nothing could possibly be less assuring than what actually happened, it was the worst possible outcome. $100 million dollars is about as far off as two reasonably sane parties could be in negotiations over a team valued at $350 million. Where is the reassurance?
by morethesamewiz on Jan 27, 2010 8:00 PM EST up reply actions
And the longer it takes for Leonsis to step in
The closer Grunsfeld leads them to the precipice. We need Leonsis in as soon as possible in order to bring in a capable GM to oversee the demolition trades and the draft picks. The next two or three years depend on who we get in the draft and what we get for the big 3. We will be much better off with a Leonsis guy overseeing these decisions than with EG handling these decisions.
by morethesamewiz on Jan 27, 2010 8:06 PM EST up reply actions
Option A was incredibly unlikely to happen.
If you put yourself in Leonsis’ shoes, you know you have both the right of first refusal AND the strongest interest in the property. Why would you take their price?
If you put yourself in the Pollin’s shoes, why would your opening gambit be price to sell?
While it would have been nice is arbitration/appraisal had led to a deal, it was very unlikely that they would agree on a price before that.
Also to clarify: the part I found reassuring was that they were only $100MM apart.
Okay, fair enough, but how much further could two businessman be apart?
After several rounds of negotiations, 100 m is a large bridge to cross.
by morethesamewiz on Jan 27, 2010 9:43 PM EST up reply actions
Caps have lost $100 mill over the past 10 years-
I would think he would want to get a deal done. But then again maybe that is also an incentive to hold tight
Yeah, I guess I don't see how this is fundamentally different.
As I understand it this just means the Pollins (or the Pollin group, however it’s best described) can gauge what the market is before they get a definitive answer from Leonsis. This still boils down to a yes or no decision from Leonsis.
Ridiculous Upside, where developing talent and winning are not mutually exclusive.
MY GOD!!!!!
….but please work this out.
by Aquamaneastfish on Jan 27, 2010 8:29 PM EST reply actions
Not a big deal
What else should Leonsis do? Sounds like the Pollins are driving a hard bargain — why be in a rush when you don’t have to compete with other buyers? The only thing that is a problem is if Leonsis decides he really doesn’t want the team and decides to not match. Right now he’s probably low-balling, and it’s hard for the Pollins to get a good feel for the value while they’re only dealing with one buyer. Pollins will dip their toes in the market, and, finding no quick purchasers, will eventually reach a compromise with Leonsis. That’s my prediction.
Getting buckets since 2003.
by Icantfeelmyface on Jan 27, 2010 11:48 PM EST reply actions
Unless Leon he buys out this team being a fan of this franchise is about as rewarding as hanging yourself off a balcony.
Anybody seen the Cavs as of late? They are a team with smart management, good health, good luck, and a deep, skilled team. I’m kinda sold that Cavs are winning the rings thus season. Hate to say it. I truly think Delonte West is the scum of the NBA. The guy makes a retarded chimpanze sound smarter than him.
by Unxpekted on Jan 28, 2010 12:29 AM EST via mobile reply actions
Cabs are good because they (1) lucked up on Lebron and (2) decided to capitalize on that stroke of good fortune. Nothing incredibly brainy there…
And Delonte… Besides his disorder, what do you know about him?
by jones-y on Jan 28, 2010 9:32 AM EST via mobile up reply actions
All this tells me is...
that there is a substantial difference of opinion between the Pollin interests and Ted Leonsis on the value of an NBA Franchise in today’s market.
Note that I did not say the Wizards specifically. If recent speculation on the number of money-losing teams in the NBA, the possibility of a lock-out in 2010-11 and such, is any indication, anyone who wants to invest in an NBA team today is looking at a fairly bleak near-term financial future.
This is, of course, even more true for the Wizards, insofar as the team itself is in such disarray that there is virtually no incentive for anyone to pay face value for a game ticket (much less a ticket plan) and therefore buy anything from on-site concessions at Verizon Center… or even watch them on television, which suggest that Comsat may drive a hard bargain next season too.
Had my son wisely decided not to re-up with our family’s season tickets this year (after 15 seasons!) we well might be among the planholders who could hit the new owner with a class action suit as soon as he sits down behind his desk.
Abe Pollin’s heirs are smoking some strange weed if they think they are going to get premium money for the Wizards at this point. I continue to respect Abe Pollin’s memory, mind you, but he was a businessman too. And if the shoe were on the other foot, he would be trying to drive down the price too… and he would succeed in buying on his terms, as I am sure Mr Leonsis will in the near future.
Have any team's ticketholders successfully sued ownership...
through class action? If so, on what grounds? I’ve not heard of it, and would be interested to know more.
don't know that it has even been attempted...
but DC has more lawyers per capita than any place outside of the region of everlasting fire. What would the late Robin Ficker have done with this????
Sonics fans successfully sued their (former) ownership
for breach of contract after the team was moved:
http://www.king5.com/news/local/Sonics-owner-settles-lawsuit-with-season-ticket-holders-82227917.html
this is different.....
….i dont see on what grounds or what one could ask for in a lawsuit … i’m a season ticket holder and the team has technically given me what i paid for, 41 nba games … granted, the quality of product is garbage, but when you buy seaon tickets, that’s the risk you take … all you can do is not renew … the team gave a bunch of incentives to keep people last year(free seat upgrades, more time to pay), i wonder what they’ll do this year … for anyone who has season tickets, who is planning to renew for next year
What Else Could Possibly Go Wrong With This Team?
Is there any other NBA team right now that is worse off than ours? Can we get some good news for a change? At the very least, this means that Ted won’t be taking over this team soon enough to force some deals by the trade deadline. And since I have lost faith in Ernie Grunfeld, this is not very comforting to me.
"It's OK for the Bullets to trade baskets, as long as they can score on their end." -- Words of wisdom from Phil Chenier
Again, not a big deal...
This is a negotiation, and Ted has little leverage in the deal. He is LOSING money with the Capitals. The Pollins (or rather, Goldman Sachs) most likely understand this. His best bet is to sit tight, wait out the process and see if someone either a) appraises the team’s value to his liking, or b) bids at a number he can match. Other posters who have taken this position have also articulated it well.
Today's Post clears things up...
…while pointing out that their own headline is too sensational.
We are at no different a place in the negotiation than we thought. To wit:
- The original negotiation period expired, leading to the appraisal process.
- It is known that Leonsis has hired an appraiser. It is not known what the Pollins have done.
- If that fails, a third appraiser will be hired. To emphasize, we have not reached this point yet.
- If that fails, Leonsis has right fo first refusal.
So, to recap, it’s all going the way it was always going to go. The Post (and everyone who read the Post) over-reacted to Biche’s memo.
My take: the point of that memo was to clarify for WSE employees what Leonsis’ rights were and weren’t, nothing more. It may have been some posturing as well, but let’s keep in mind it wasn’t a press release or anything.
Sorry - link
It was front page of the print edition, ran in Section A not D.
There remains disagreement on whether the exclusivity period has expired
From this article, it sounds like Leonsis believes that after the 10-day period, the exclusivity period continues while each party hires an appraiser, and failing agreement between those two, hires a third party appraiser. Only if the sides reject the price set by the third-party appraiser (Post makes it sound like Wizards are supposed to comply with third-party price if it comes to that), only then can the team start an open bidding process for the team with Leonsis’s right to match an offer.
The Pollins apparently are operating under the assumption that the exclusive-right-of- purchase is over by the time the appraisal process starts.
Is that your read Prada?
by morethesamewiz on Jan 28, 2010 4:18 PM EST up reply actions
My name's not Prada...
…but my read is those things aren’t inconsistent.
It seems like the Pollins can negotiate with anyone they want. They just can’t close a deal until a) the appraisal process is complete, b) Lincoln Holdings has declined to purchase at the final appraised price, and c) Lincoln Holdings has declined to match the offer the Pollins get elsewhere.
If you or I were interested in buying the Wizards, there’s no reason we can’t be talking to the Pollins about it right now.
Thanks for clearing that up for me
Between gungate and the Leonsis bid, understanding what is going on with the Wizards is one of the great intellectual challenges of our time.
by morethesamewiz on Jan 28, 2010 10:59 PM EST up reply actions
I just wonder how this affects the Basketball Operations side
Does Ernie Grunfeld have the authority to trade players ?
From whom does he get that authority? (presumably the Polin Estate, ie: Irene Polin)
What is the impetus behind the club right now?
Are they in a holding pattern?
Does Ernie (Ierne Polin) still think they can get to the Playoffs?
Will they try to shed salary?
I think that the longer it takes for Ted Leonsis to buy the team, the longer we will be subjected to a team in limbo. A team, still trying to make the Playoffs, no matter how asinine that seems; but a team trying to shed salary, and get under the tax…..
Bullets Forever - where "Dagger ! " happens......
My guess...
EG is still the GM, and still has the authority and responsibility for the roster. He is answering to the Pollin family (I’m guessing Robert and/or James Pollin) for the budget, and may or may not be getting pressure on them to reduce. This is akin to any other GM/owner relationship.
I can’t say where the Pollins are, but i’m guessing their priority is selling it for top dollar. After that comes payroll reduction, and after that comes planning for the future.
That said, EG is making a bid to save his job. You could hear that in yesterday’s press conference, where he repeatedly hyped how great Gil had played this year (heard as: I didn’t totally screw up with that max contract). That means he will be disinclined to blow it up unless he’s directed to (which he may or may not be) or gets some really good looking offers.
That said, Ted is in the Pollins’ collective ear about the roster,and I’d be surprised if EG weren’t being directed to either clear cap space this summer, acquire some draft picks for 2010, move the longer contracts, or all of the above. We should all acknowledge that it’s tough to gameplan when there’s a possibility we’ll be stuck with Gil for at least two and as many as four more years.
actually
(heard as: I didn’t totally screw up with that max contract).
I heard that as “You see, this kid can still play basketball. Now, will someone please trade me for him so I can finish paying for the new addition I just put on my house?”
I agree with Rook though. This needs to get taken care of as soon as possible so that the team has some direction. While I’m sure Leonsis may be telling the Pollins is suggestions, they will still operate the team how THEY FEEL it should be operated.
Now, that said, this doesn’t surprise me at all. Big transactions like this rarely go smoothly. I think this will drag out as long as possible. I also wouldn’t be very surprised if Leonsis DOESN’T end up with the team. As much money as he’s lost with the Caps, he has to be extremely leary of taking on another plummeting franchise.
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