I was awakened by a phone call at 4:55am this morning from a number I didn’t recognize; it was Sal Galatioto of Galatioto Sports calling to talk about the sale of the Golden State Warriors. I told Sal that we would have to have this conversation a bit later as the sun wasn’t even out yet here on the West Coast. I called Sal a few hours later and here is the text of our conversation.
When you first sat down with Chris Cohan to discuss the sale of the team, did he have certain requirements or a set price he wanted for the team?
We started to talk to Chris about the sale of the team close to a year ago. Once he finally made the decision to sell the team, there were 3 things he was interested in.
1. Get the best price he could.
2. Get a bid from someone who could easily be approved by the NBA.
3. Get the team into the hands of someone who can take care of the team and make the team competitive.
Those were my orders from the beginning.
How did Joe Lacob secure the winning bid?
When we started the process, we had almost 20 groups approach us but we narrowed it down to a dozen groups after eliminating the groups we felt weren’t viable contenders. From there, we narrowed it down to 4 and all four of those bidders made bids in excess of $400 million. There was a group from the start of the process that leaped out in front of all the other groups and made it known they wanted to win and were very aggressive, that was the Joe Lacob and Peter Guber group.
We talked to Lacob-Guber at the price that was announced and subsequently informed the other groups of that price at which point some groups dropped out. We decided to close the deal with Lacob-Guber and we got locked in a room for three days with lawyers and financial people and hammered out the deal. In hammering out the deal, there are dozens and dozens of adjustments you have to make and some of these adjustments can move the price $10-15 million dollars, we looked at assets, liabilities and the whole nine before completing the deal.
This wasn’t a case of Chris Cohan simply not wanting to sell to Larry Ellison?
Anyone who thinks Chris didn’t sell the team to Larry Ellison because he doesn’t like him is wrong. Chris likes Larry, I like Larry and have a huge amount of respect and admiration for him as well as what he’s accomplished; but he was just too late. His bid was only marginally higher and at that point we weren’t legally bound but morally we weren’t going to break the deal with Joe and Peter.
Larry’s group had ample time to submit their bid, they came in literally hours before we completed the deal with Lacob-Guber with a bid which was marginally higher. At that point, we were morally and ethically bound to complete the deal with the people across the table with us. Chris decided he was going to move forward and close the bid with Lacob-Guber. The situation with Larry can be described as this, even Michael Jordan didn’t get to take a shot after the shot clock expired. Maybe he didn’t believe there was another bid at $450 million, maybe he didn’t believe me and mis-read the market. We don’t change the rules for anybody. He knew what it would take to win and he knew of the high bid for weeks, he let the clock expire.
What can people expect from Joe Lacob and Peter Guber?
A lot of people don’t know Joe or Peter and that may be where some of the dissatisfaction may lie but I’ve known Joe for a long time and seven and half years ago I was in his office talking about different sports properties and he told me he wanted to buy the Golden State Warriors. So, once Chris told me he wanted to sell, I went to Joe and he did everything right. He stayed below the radar screen, worked hard and got his people to work hard to put together the winning bid. Warriors’ fans will love him as a owner as he loves basketball, knows basketball and he won the bid against some very stiff competition, he’s going to make this team a very competitive team- Joe is a flat out winner.
I’m very impressed with Joe’s knowledge of the league and players and he’s going to make this team a winner. When you walk into the offices of the Yankees and Lakers you feel excellence. That’s the same feeling I get when I meet with Joe, he’s a flat out winner. The story shouldn’t be about Larry Ellison not buying the team, it should be about Joe Lacob buying the team. Don’t be fooled by the guy with the biggest checkbook because he’s not necessarily going to win. Joe’s grouped is well capitalized, they’re not going skimp on any part of running this franchise.
Will Chris Cohan maintain any piece of the team?
Will the minority owners still be in place?
It’s up to them.
How involved were David Stern and the NBA?
Not at all. They qualified the bidders but after that they left it to us. They would’ve been happy with any of the final four groups.
How does Cohan feel about fetching a record price for his franchise?
I think he’s pretty happy. You read the newspapers in the Bay Area and I get hammered constantly by people calling me an auctioneer and that the team would sell for around $300 million. I told people from the beginning we would get around $450 million for this team and people laughed at me but people aren’t laughing at me now. I do more of these deals than anybody so when I tell you something I’m not pulling it out of my ear.
What made you so confident you could fetch Chris Cohan $450 million?
The Bay Area is one of most attractive places in the world, it’s got great demographics and the team has one of the most loyal fanbases I’ve ever seen. The team is one of the most profitable teams in the NBA, there’s huge upside because the team is in the Bay Area you’re going to get bidders from all over the world.
Everyday I take to individuals with big checkbooks looking to purchase teams in different sports and having direct feedback with these potential buyers I was confident in believing I could get Chris Cohan close to $450 million dollars for his team. If you’re talking New York, LA, Chicago, Bay Area, these are markets that people want to buy into and teams hardly hit the market in these towns so when they do, people jump at the opportunity to purchase them.
Usually when I’m in the process of selling a team I never get emails from fans but when news broke of the Warriors being put on the market, I was getting emails from people daily telling me about their love of the team and what they hope will happen. If you win in the Bay Area, you’re going to get an absurd amount of press and visibility, so why wouldn’t a potential buyer want that.