If $6.1 billion isn’t worthy of a patented Mike Breen Baaaaaaaang! — maybe even an ultra-rare double Baaaaaaaang! — then we don’t know what else would be.
That’s the price that the Boston Celtics just sold for, in a deal announced Thursday that marks the highest price for a team paid in the history of American sports. But one question lingers: Why would the ownership group of the reigning champs want to cash out now?
Not So On the Moneyball
Two major developments are set to shape the NBA in the coming years. Next year marks the beginning of the league’s 11-year media rights deal with ESPN, NBC, and Amazon — a massive increase from its current broadcast agreements. Meanwhile, last year marked the beginning of a new collective bargaining agreement between the league and the players union (the league splits all revenue roughly 50/50 between players and owners).
For non-sports fans, the agreement sets the financial rules for team building, and this latest contract, set to run through the 2029-2030 season, makes it very, very expensive to maintain a high-payroll roster. And the Celtics didn’t exactly win a championship on a Moneyball budget. Which means the team’s next ownership group — led by private-equity firm Symphony Technology Group co-founder William Chisholm — will have to continue paying big bucks to retain the team’s championship core:
Unlike the NHL and NFL, which force teams to operate under a hard salary cap, the NBA’s system is a little looser. While there is technically a salary cap — set this season at around $141 million — teams can blow past it, so long as ownership is willing to pay a so-called luxury tax to the league (half of which then gets redistributed to the owners whose teams stayed below the tax threshold).
The latest agreement is especially punitive compared with older editions, designed largely to discourage egregious over-spending from the league’s new crop of multi-billionaire owners (we’re looking at you, Steve Ballmer). It introduces additional taxes if teams blow past a “first apron” threshold, set at $178 million, and again past a “second apron” threshold, set at $188 million, with even more punitive taxes triggered when paying luxury taxes in three out of four successive years.
Flagrant Foul: With roughly $193 million in guaranteed player contracts this season and a stunning $225 million in contracts on the books for next season (and nearly $1 billion in contracts over the next few seasons overall), the Celtics are firmly a “second apron” tax team. This year, ownership will pay around $52 million in luxury taxes, and next year, it will likely pay double that after triggering the so-called “repeater” tax, according to The Athletic’s calculations (that’s still cheaper than United Mortgage CEO Matt Ishbia’s Phoenix Suns, which will pay a $152 million tax bill this season… while likely missing the playoffs). The Celtic’s soon-to-be-former ownership group, led by Wyc Grousbeck, bought the team back in 2003 at a valuation of just $360 million. Two championships later, their tenure is looking like (excuse us, please) a slam dunk.