Thursday was another big day for the NBA. The Boston Celtics were sold to a new ownership group for a record-breaking $6.1 billion. That’s nearly twice what Joe and Clara Wu Tsai paid for the Nets and Barclays Center in separate transactions completed in April 2018 and October 2019. And Celtics deal didn’t include TD Garden. That’s owned by the Boston Bruins. Such is the inflation in the valuations of NBA franchises.
The Celtics new NBA governor is William Chisholm, a billionaire but also a lifelong Celtic fan who expressed his love of the team in a statement after the sale was announced. The Celtics are a good investment, of course, but beyond that, a good time.
Indeed, a week ago, Tsai spoke at a CNBC conference in Singapore about just that convergence of smart money and passion when asked about the Brooklyn Nets by David Faber. (The discussion starts around 01:14:00.)
“For a sports owner, the return season after season is winning. Every season, you’re trying to win the championship, so you want to win games, right?” Tsai said in remarks first published by Sports Illustrated’s Wilko Martinez Cachero.
“You’re not looking at the income statement of the team from season-to-season, so I guess the final payoff for me is less financial — even though the financial aspects are important, I have to make sure that the bottom line investment can make sense — but at the end of the day, it’s through the love of sports. I have a passion for sports. That’s why I invested in these teams.”
The Nets for a variety of reasons haven’t made a lot of money for Tsai and his family investment office, Blue Pool Capital, if you look at profit-and-loss over the years since Tsai bought in. Indeed, Forbes reported that in 2023 that Brooklyn was the only NBA club to lose money — about $5 million — but by 2024, the team had earned a profit of $43 million
Last July, however, the Tsai’s sold off a 15% stake in the Nets, Barclays Center and New York Liberty for $688 million. Most of that is being used to pay off debt but BSE Global, the Tsai’s Brooklyn holding company, also announced a five-year, $100 million plan to improve the 12-year-old Barclays Center.
Of course, the Nets haven’t won much either despite the Tsai’s big investment in the Big Three of Kevin Durant, Kyrie Irving and James Harden. Their contracts, combined with other big outlays, have cost Tsai a reported $323 million in luxury taxes only to have his teams make it to the second round of the post-season once. Now, the Nets are rebuilding.
The Tsai’s are also investing in other leagues, other sports. Their most successful investment has been the Liberty who not only are now worth somewhere about a quarter billion dollars but won the WNBA championship in June. More recently, Tsai added 3% stake in the Miami Dolphins at a cost of $200 million to go along with his interests in the WNBA, both professional lacrosse leagues and the MLS through a small stake the LAFC. He also has taken on ancillary sports assets like a small stake in Golden Goose, a high-end sports footwear brand.
Tsai told Faber that in beyond including a line for passion in his spread sheets, he has several commercial rules he follows before investing in sports.
“I have a few principles when I make these investments,” he said, laying out two basic ones: he invests in leagues “where the best players in the world play” and ones where there is “media value ... you really need to pay attention to either online — streaming — but linear TV is also quite important.”
And he said that while NBA and NFL franchises look expensive, “as long as you can grow the fanbase, the viewership on television or streaming, these are global audiences, So there’s a lot of upside to go.”
Tsai in fact noted that when he bought the Nets, “everybody thought I overpaid for it, but seven years later, I didn’t over pay, and there’s a very important reason for this. They call these teams ‘franchises’ because not just that anyone can just start a team. Someone has to grant you the franchise. So supply is by definition limited.”
The Nets and Liberty governor also spoke about the value of owning an arena, as Martinez-Cachero reported
.“Most nights, we have concerts. We’re generating revenue from renting out the space to artists, and that’s a great business. In fact, Barclays Center in the last year is considered, according to the objective metrics, one of the top three [or] four venues in the world according to metrics in terms of concerts.”
When Faber asked whether in light of his $200 million investment in the Dolphins and associated sports assets in South Florida would he ever being interested in owning an NBA franchise, he said no.
“I’ve got to take care of the Brooklyn Nets first,” Tsai said smiling.