A place for me to talk about San Francisco Bay Area sports.

Saturday, June 05, 2010

Warrior's Sale: Ellison No Lock to Buy? I Disagree

Monte Poole, who I used to read when I was in the East Bay reading the Oakland Tribune, wrote a column on Wednesday about how Ellison is no lock to buy the Warriors.  I've always liked Monte's writing but I would have to disagree with his column.

I think this shows that sports columnists don't always understand business well enough.  According to news, Ellison is one of four bidders that the Warriors had winnowed the down the list (13 originally I think), and according to "one informed source" (Cohan or Rowell :^), Ellison's bid is beat by at least one if not more bids.  Based on that and other factors, Poole thinks that Ellison is no lock to buy, because if he wanted to buy the franchise, he could just write a check for $450M, click the eBay "Buy Now!" feature and walk off with the Warriors.

Smart Business Minds Don't Offer Top Bid Immediately

Well, Ellison didn't become one of the richest people on earth buying things willy-nilly and offering top price.  That is not how you run a business negotiation.  You start with what you think is a fair price, but bid slightly under and start the bidding from there.  Just because he hasn't outbid everyone yet - and everyone knows he can - doesn't mean that he won't outlast the competition in the bidding eventually.

It is kind of like the scene you see in the movies when an auction is being held.  It starts low then works it's way up.  Nobody shrewd is going to offer top dollar immediately, they are going to hope that they can buy the item at a lower price.  But if that person really wants something and has the most money, he or she can keep chipping away until the final competing bidders fall out of the race, and claim the "prize".

The Opportunities to Own Are Few and Infrequent

Ellison has been wanting to be a sports owner for a while now.  He has been rumored around the 49ers as well as the LA football franchise.  He can buy a franchise in any sport and still have money left over to buy 10-20 more.  Heck, he could buy the whole NHL league with the money he has and if the league was willing, and probably could swing the deal with the other leagues with some loans tied to his Oracle stock holdings.

The Warriors make a lot of sense.  It is local.  Their stadium already has the Oracle name on it.  More importantly, it is for sale.  These opportunities are not going to come around every year:

  • The 49ers look to be Jed York plaything for many more years, he's still very young.  
  • Al Davis will probably work out a deal with the Devil and own the Raiders in his afterlife, or at least through his family.  
  • The Giants just had a new owner and I doubt Neukom is looking to relinquish his reins so soon, I'm thinking he's going to last at least to the end of the mortgage in 2008.  
  • The A's is owned by an owner working to get them into the south bay, where he grew up, came from, and made his money, so he's not looking to sell right now, as he has the real estate connections and baseball connections (hey, can't do better than being Bud Selig's college roommate for connections) to make the south bay happen eventually.  
  • The Sharks are trying to win it all and soon, the owners are not going to sell and watch the team finally win the Stanley Cup.

That leaves the Warriors, which happens to be up for sale right now.  

Only Foreseeable Chance for Local Team

Look, if he really wanted to just be a sports owner, he could have just plunked down enough cash (out of his back pocket) to buy the LA franchise already.  The NFL would love to have him as an owner, if they can accept that AOL guy owning the Redskins, they can handle Ellison.  That this hasn't happened - and it has been a number of years now and I don't see that rumor around anymore - means that he wants to stay local.

And the Warriors is the only team that looks to be for sale in the next 5 years (unless he knows something about Al Davis's health that most people don't).  Most of the other franchises have had recent ownership changes and most owners don't take over just to sell out in a few years.  The other franchises have situations that preclude them selling out soon to Ellison, and only Al Davis is old enough to think realistically that death might make the franchise available (perhaps after the Russell debacle and now lawsuit to get $9-10M back; good luck with that).

The Warriors is it for the foreseeable future, so I would expect the bidding process to be long and drawn out, because the NBA will want top dollar for the franchise.  And much like how Russell wanted $1 more in salary in his contract over Wilt Chamberlain's contract, I expect Ellison's winning bid to not be significantly more than the next highest bid eventually, the way the bidding is being done right now.  This horse race is still early yet, we are not even in the middle, let alone the last stretch, where I expect Ellison to outlast everyone.

The only way Ellison would blow everyone away is if the Warriors eventually implemented a blind bid, winner takes all, like the owners of the Beatles song catalog did.  Then this would push Ellison to bid what he thinks it would take to win the bid, not simply beat out the other bids.  But the way the bidding is going, he just has to outlast everyone else.  And he has the money to do that.

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Blogger obsessivegiantscompulsive said...

Wow, did not see that one coming, I was wrong and Monte was right.

Ellison eventually decided that he had a price in mind for the worth of the franchise and he decided that he would not go over it. Instead Lacob and Gruber acquired the team, basically because they wanted it more than he did.

And it makes sense, Lacob was only interested in basketball, being a former part-owner of the Celtics, while Ellison has expressed interest in football, baseball, as well as basketball, plus he has his America's Cup title to defend. Ellison was OK with passing, for with his money, he will eventually land one.

Lacob had this one chance in his lifetime to get a basketball franchise in his metropolitan area, and he did pulled it off.

I'm very hopeful about the Warriors because Lacob has his Celtic's experience to build off of, plus connections he made while there, plus he's really into basketball, while I have no idea what Ellison knows about basketball and if he is going to be a mettling owner, I would hope that he knows something about the sport.

I'm willing to risk him dragging down the Giants as the next owner (like the guy who has ruined the Redskins in football) in order for him to finance the keeping of our young players during the 2010 decade.

Monday, March 07, 2011 3:24:00 PM


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