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Sports

Golden State Warriors sold for record $450 million

By Reuters
Published | Updated

By Ben Klayman

DETROIT (Reuters) - A group led by one of Silicon Valley's top venture capitalists and a Hollywood movie producer said it would buy the Golden State Warriors basketball team for a record $450 million.

Joe Lacob and Mandalay Entertainment Group Chairman and Chief Executive Peter Guber, the former chairman of Sony Pictures Entertainment, said their group would buy the long-suffering team from Chris Cohan, beating out other bidders including Oracle Corp Chairman Larry Ellison.

"This is my dream come true," Lacob, managing partner with Kleiner Perkins Caufield & Byers, said in a statement. "It is our passion to return the Warriors to greatness and build nothing short of a championship organization that will make all of us in the Bay Area proud."

A Warriors' season ticket holder for the past decade, Lacob is not a stranger to sports as he owns a minority stake in the Boston Celtics basketball team, which he will have to sell.

He was a primary investor in the women's American Basketball League and also led Kleiner Perkins' investment in sports web site Sportsline.

Lacob, whose group must get approval from three-quarters of National Basketball Association owners to close the deal, has been a partner at Kleiner Perkins since 1987. Founded in 1972, the firm has invested in companies such as Amazon.com Inc, Google Inc, Genentech and Sun Microsystems.

Lacob has been closely involved in the firm's investments in more than 50 life science companies, and led Kleiner Perkins' investment in AutoTrader. He also has been involved in the firm's energy investments.

Lacob won't be the first pro sports team owner at Kleiner Perkins. Affiliated partner Kevin Compton is part of the group that owns the National Hockey League team in San Jose, California.

Several media outlets said late on Wednesday that Ellison would be the likely winner. Another bidder was Mark Mastrov, founder of 24-Hour Fitness.

"Although I was the highest bidder, Chris Cohan decided to sell to someone else," Ellison said in a statement. "In my experience, this is a bit unusual. Nonetheless, I wish the Warriors and their fans nothing but success under their new ownership."

Sal Galatioto, president of Galatioto Sports Partners, which was hired in March to sell the team, said the Lacob group had the highest bid at a deadline everyone knew about.

Guber's Mandalay Entertainment owns six minor league baseball teams. He is known for producing such well-known Hollywood films as "Rain Man," "Batman," "The Color Purple" and "Flashdance."

After leaving Sony in 1995, Guber founded Mandalay, which has produced such movies as "Donnie Brasco" and "I Know What You Did Last Summer," as well as numerous TV shows.

Cohan bought the Oakland, California-based Warriors in 1995 for $119 million, and in 2004 sold a 20 percent stake for an undisclosed amount to a group of four investors.

The Warriors made the playoffs only once in Cohan's 16 years of ownership and finished with a combined record of 477-803 during his tenure. Cohan thanked "the best fans in all of sports" on Thursday.

Bankers and analysts who follow the sports industry previously said the Warriors could top the $401 million paid by Robert Sarver in 2004 for the Phoenix Suns.

Last December, Forbes magazine valued the Warriors at $315 million, down 6 percent from the prior year's list and ranking 18th out of 30 teams.

While Commissioner David Stern earlier this year said the NBA could lose around $400 million this year due because of the weak economy and its labor agreement with its players, analysts said the Warriors' Bay area location made it irresistible.

The NBA's current labor deal runs through the 2010-2011 season, and the owners want to reduce the players' share of basketball-related income, pointing to a possible lockout by the owners or a strike by the players.

Earlier this year, former NBA all-star Michael Jordan bought the Charlotte Bobcats for a reported $275 million in a deal also brokered by Galatioto. Russian billionaire Mikhail Prokhorov bought the New Jersey Nets and other related assets for more than $200 million.

Lacob and Guber's group was advised by Game Plan LLC.

(Reporting by Ben Klayman in Detroit. Editing by Robert MacMillan)