Comcast-Spectacor is in serious discussions to sell the 76ers to a group of investors led by New York-based leveraged-buyout specialist Joshua Harris, several sources said Tuesday.
Under the proposed deal, Comcast-Spectacor chairman Ed Snider would sell Harris and his investment group a 90 percent share of the team. Earlier this year, Forbes listed the Sixers as the 17th most valuable NBA franchise, worth approximately $330 million.
No exact number has been attached to the deal, but sources put it in the range of $270 million to $290 million.
With this deal, reported first on ESPN.com, Snider would relinquish majority control of the franchise, which he has had since 1996, but would maintain ownership and operation of the team's arena, the Wells Fargo Center.
Under this new ownership, the Sixers would become a tenant at the Wells Fargo Center.
Harris, 46, is cofounder of Apollo Global Management, which specializes in leveraged-buyout transactions, and is worth an estimated $1.5 billion. He leads an investor group that includes private equity investor David Blitzer and former NBA agent and Sacramento Kings executive Jason Levien.
One unanswered question is whether Harris is making a "vanity purchase" to simply enjoy the perks of owning a pro sports team or a shrewd financial move to acquire a big-market team at a discount price.
Why should fans care?
According to Marc Ganis, president of SportsCorp Limited, a Chicago-based sports consulting firm, individual owners are generally more accountable to fans and sponsors than corporate owners and pay more attention to their team than their bottom line.
The third source close to the deal cautioned that while this deal is advanced, multiple hurdles remain to be cleared. This same source put finalization of the deal - if such a thing is to happen - at about a week, possibly 10 days.
Harris declined comment through a spokeswoman. Snider did not return a phone message, but Peter Luukko, Comcast-Spectacor president and chief operating officer, issued a statement.
"I can confirm that we are in discussions about the future of the team, but these discussions are confidential and we cannot talk about the details," Luukko said. "At some point, we may have something more to say about these discussions, but we will not be making any comments at this point."
Snider, who founded Spectacor in 1974, sold a 67 percent share of his company to media giant Comcast in 1996. Comcast-Spectacor owns and operates the Wells Fargo Center and the Flyers of the NHL. The Flyers are not for sale.
While talk of a Sixers sale has arisen before - most recently in 2006 - the discussions with Harris are more advanced than any in recent times, according to a third source familiar with the deal.
"It's really in the hands of the lawyers," said the source, requesting anonymity because of the delicate nature of the talks. "This has a much higher probability" of being completed.
The Sixers have struggled over the last few seasons to keep their fan base happy and win games. They've had seven coaches since Larry Brown left in 2003 and have not won more than 43 games since 2002-03.
However, a source said increased fan interest and success on the court - namely, a playoff berth this season - sparked interest in the team and led to a number of calls inquiring about the Sixers' availability even though the team was never on the market publicly.
But Comcast's $13 billion purchase of the majority stake in NBCUniversal Inc. and impending NBA labor strife are also factors that make a deal more likely now than before, Ganis said.
The NBA's collective bargaining agreement expires at midnight June 30. Given the current climate between NBA owners and the players' association, a lockout is probable.
"There's a lot of uncertainty going into the NBA offseason with the labor situation, what's going to happen with revenue sharing," Ganis said. "I get the sense that they actually want to not own a team in the middle of a tremendous labor battle."
Comcast is also now "playing on a much bigger stage" and has broader concerns and faces more scrutiny, including from regulators, Ganis said. (For example, on Tuesday NBC paid $4.4 billion for Olympic broadcasting rights through 2020). Selling the Sixers will free up management resources, much like when Fox sold the Dodgers in 2004, he said.
"Sometimes these sports assets take more time than they're worth for a large company," Ganis said, particularly in a year with the potential for an ugly labor fight.
Both Ganis and the source close to the deal said a Flyers sale is unlikely because of Snider's love of the hockey team.
Ganis said that the Sixers have a strong market but that Comcast's control of their arena and television rights will hurt the team's value.
"Their revenues will be limited, which should be reflected in the purchase price," Ganis said.
The other source said the terms of the arena and television deals were still being negotiated.