The Atlanta Hawks will attempt to sell the ownership share of Bruce Levenson after he announced Sunday that he sent a racially charged letter to others within the organization. Here's what we know about the Hawks' ownership structure, how this came about and what questions are to be answered for the financially burdened franchise.
What we know (and don’t) about Bruce Levenson selling his share of the Hawks
Bruce Levenson announced he will sell his share in the Atlanta Hawks after admitting to a racially insensitive email sent two years ago.
Jason Getz-USA TODAY Sports
What we know
What they said: NBA commissioner Adam Silver released a statement on Sunday to announce the Hawks co-owner will step down prior to the completion of the NBA’s investigation of his email from 2012.
Silver said Levenson self-reported the email in July, but a high-ranking front office official told Yahoo! Sports Adrian Wojnarowski that isn’t the case (NBA spokesman Mike Bass denied that report). Hawks CEO Steve Koonin released a statement in conjunction with Silver’s, while Levenson released his own statement of apology.
What the email said: Levenson’s email was sent in 2012 to general manager Danny Ferry, along with ownership partners Ed Peskowitz and Todd Foreman. In it, Levenson attempts to link a high percentage of black fans to the low season ticket sales. He theorizes the white fans are “scared” by the high percentage of black fans, and while he says complaints over such issues is “racist garbage,” Levenson also says he wants to change the demographics of home games to help put more white, middle-aged men in the seats. Here is the letter in full, via the Atlanta Journal Constitution.
Who is taking over?: For now, Koonin will operate the team in place of Levenson.
How the Hawks ownership group works: The Hawks are owned and managed by Atlanta Spirit LLC, which includes Levenson, the team's NBA representative, and six other partners. That group also owned the NHL's Atlanta Thrashers but sold that franchise in 2011 after financial struggle. Despite the sale, the Hawks were one of four NBA squads that wasn't profitable last season, according to Forbes. The ASG agreed to sell the team to businessman Alex Meruelo in 2011 but that deal was mutually terminated. This February, the team added five anonymous, minor investors, reported the Atlanta Journal Constitution.
The Hawks probably aren’t moving: The Hawks are still paying off their bonds in an agreement with the city of Atlanta to play at Philips Arena, and they have a $75 million early termination fee that would need to be taken on if they leave before the 2018-19 season.
What we don’t know and why speculation of something deeper is mounting
Why this went public in a joint statement: It's possible the NBA and Levenson could have kept this under wraps and allowed Levenson to sell his share in the Hawks. It's not clear why the NBA decided to go public with the reasoning, though it seems Silver let Levenson off the hook to a degree by claiming it was a self-reported issue when it reportedly wasn't. USA Today's Jeff Zillgitt reports that Levenson was already considering selling his piece of the Hawks before this scandal. Likely, the NBA moved forward with the expectation that it would cause bad PR if the reasoning were uncovered, especially following the Donald Sterling ouster that preceded this by only months.
Why sell now?: Let's jump back to the sale agreement and mutual termination of it in 2011. How secure was the deal? Meruelo, a pizza chain owner and businessman, even held a press conference to announce a deal reportedly in the $300 million price range, but the NBA's requirements in any sale caused the agreement to break down. The breakdown came because the NBA makes new owners personally commit to ensure they are capable owners. For example, the league made the ASG ownership pay $90 million in additional fees when they first bought the franchise from Time Warner to "ensure sufficient liquidity," according to the Atlanta Journal Constitution. Such an addition onto the base price to buy the team apparently was too much for Meruelo.
So if the Hawks and Levenson were so set on selling in 2011 -- and to an owner who didn’t have the ability to pay all the dues -- why then did they suddenly pull the team off the market when that proposal fell through? Why would the desire to sell go away? Could the economic state of the league perhaps have something to do with it?
Levenson was poised to sell his interest in the Hawks in '11; deal fell apart at the 11th hour. Forbes recently valued Hawks at $425 million
— Chris Mannix (@ChrisMannixSI) September 7, 2014 The Los Angeles Clippers’ sale for $2 billion this summer following the Sterling scandal certainly wasn’t overlooked by other owners. Speculation will run rampant, because the news comes from a struggling ownership group that has once tried to sell the team.
I love this email. Top notch content. Only thing shocking about it is that he's using it as his get-out-of-hawks-ownership free card.
— Rembert Browne (@rembert) September 7, 2014 Who will buy Levenson’s piece?: It’s unknown who could replace Levenson at this time. The remaining six partners in ASG could potentially buy out Levenson’s ownership, but considering the apparently dire financial state, that seems unlikely. Who would be willing to jump into Levenson’s place under such financial pressure? Could Levenson -- or the ASG as a whole -- be taking advantage of this situation?
See More:
