The Boston Celtics historic $6.1 billion sale to Bill Chisholm may be in doubt.
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According to a report by Dan Primack of Axios, the current structure of the deal is reportedly “not allowed” under the NBA’s regulations on private equity ownership.
“That is not allowed by the NBA, per regulations first established in 2021,” Primack reports.
Under these rules, a private equity firm—such as Sixth Street Partners—cannot be the single largest shareholder of a franchise.
On Thursday, during the annual spring meeting of the NBA's board of governors, NBA commissioner Adam Silver discussed the Celtics transaction and how it would benefit the NBA's potential expansion.
"We're still in the process of digesting the Celtic transaction," Silver said. "There's no question that a major transaction like that becomes relevant to expansion. That deal has just been presented to us, so we're still analyzing it, and my sense is once we've been through that process that we'll turn to it in a more serious way."
Chisholm bought the Celtics last week, setting a record for North America's largest sales of a sports team. The sale surpassed the Washinton Commanders' purchase, which came in at $6.05 billion.
While this development presents a challenge for Chisholm, Primack outlined two potential solutions for the new owner.
While this development presents a challenge for Chisholm, Promakc outlined two potential solutions for the new owner. The first option is to bring in enough new investors so that Sixth Street’s full financial commitment is no longer necessary, allowing the firm’s stake to drop below Chisholm’s in the ownership structure.
This scenario remains possible ahead of the owners' vote in June, especially if existing minority investors choose to retain their stakes or if previously unsuccessful bidders decide to join Chisholm.
The second option would be to seek a waiver from the league, betting that team owners would be unwilling to reject a deal of this magnitude due to its high valuation.
Ultimately, private equity firms unaffiliated with the Celtics will watch this situation closely. If Chisholm and his group pursue the second option, it could set a precedent, potentially encouraging others to attempt a similar approach in the future.
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