Atlanta Hawks: One year later, ownership ‘extremely’ fortunate to keep stake in team

Here is the story Tim Tucker and I did on the Hawks current ownership situation that appeared in Sunday’s print edition of the AJC. I think you will find some details that haven’t previously been reported.

One year later, the Hawks’ ownership group considers itself fortunate that its deal to sell a majority stake in the team to a Los Angeles businessman fell through.

“Extremely” fortunate, Bruce Levenson said. “Extremely.”

In an exclusive two-hour interview with The Atlanta Journal-Constitution, Levenson — the ownership group’s co-managing partner and NBA governor — described in detail for the first time how and why he and his partners moved from having one foot out the door to a full re-engagement.

Levenson said the group has made no effort to sell the team since the deal with Alex Meruelo was called off Nov. 4, 2011. He said the group hopes to add minority investors, but is focused on building the franchise and owning it long-term.

Levenson’s account of the group’s intentions appears confirmed by the Hawks’ hiring this summer of general manager Danny Ferry, who says he wouldn’t have accepted the job if he hadn’t been convinced of the stability and commitment of ownership.

It’s a substantial change from a year ago.

Reeling from a five-year legal battle with former partner Steve Belkin and the sale/relocation of the Thrashers hockey team, the ownership group agreed in August 2011 to sell a controlling interest in the Hawks to Meruelo. When the deal collapsed three months later because Meruelo wouldn’t meet financial conditions placed on it by the NBA, the Hawks owners announced the team no longer was for sale. Even so, many observers figured the group might continue quiet efforts to sell.

Actually, Levenson said in the interview at a CNN Center restaurant, the group had come to regret the decision to sell by the time the Meruelo deal collapsed.

“We had made the decision … to sell a majority interest in the team so there would be a new, fresh face of ownership,” Levenson said. “A lot of things led to that decision.

“We had not long before gone through this very public, very fractious dispute among our ownership group, and even though we were pleased with the result of that (the buyout of Belkin), it was still a very painful dispute. On top of that, we had just gone through the sale of the Thrashers, another very painful and public process. And on top of that, we were going into an uncertain period in the NBA with the collective bargaining agreement. There were huge questions whether there would be meaningful revenue sharing (among teams) and whether middle-market teams (such as the Hawks) would participate in that revenue sharing.

“When we talked about all of that, we said it really might make sense to sell a majority interest … but continue to play a role going forward (by retaining a minority stake). So we started that process in motion and pretty quickly came to a possible buyer.”

On Aug. 8, 2011, the Hawks announced a deal — contingent on NBA approval — to sell to Meruelo. As the approval process dragged on, Levenson said, the bleak picture that drove the decision to sell began to brighten.

“The [Belkin] dispute became further and further in the background; all the angst that had been created for us personally … began to sort of move away,” Levenson said. “The negotiations with the league on both the collective bargaining agreement and revenue sharing began to take shape. … It became increasingly apparent to me that middle-market teams would have a meaningful place in revenue sharing. That was important because the closer we can get to a level playing field among teams, the better for the league and the Hawks.

‘The other thing that happened is the Thrashers left and a lot of the pain, the sense of failure, began to heal, like a wound heals with time. Then on the heels of that, there came some issues around the [Meruelo] transaction.

“At that point, we kind of looked at each other (within the ownership group) and said, ‘What are we doing? We love this. We can do better, but we’re doing plenty of things right here. Let’s really commit ourselves going forward.’ And that’s what happened.”

By October 2011, the proposed sale had bogged down because the NBA required additional funding from Meruelo that wasn’t contemplated in his original deal. It was no surprise when the transaction was called off. The surprise was that the Hawks’ owners didn’t seek another buyer.

A year later, as a new season approaches, Levenson said his group would like to add minority investors who could contribute to the organization in ways beyond financial, but added “nothing is imminent” on that front.

“We’ve had preliminary conversations with people who we think could add strategic value,” Levenson said. “These people come everywhere from the entertainment world to the international community.”

He reiterated in a followup email that such person(s) would be “not a majority investor” and “at the top of our list would be our desire to add people with standing in the Atlanta community as ideal additions to our group.”

The group originally known as Atlanta Spirit LLC — a name it dropped last year — bought the Hawks, Thrashers and Philips Arena operating rights from Time Warner in 2004. Seven of the original nine owners remain: Levenson and two of his partners in a large Rockville, Md.-based business-information company, Ed Peskowitz and Todd Foreman; Atlanta-based cell-tower entrepreneur Michael Gearon Jr., who is the group’s other co-managing partner, and his father Michael Gearon Sr.; Atlanta attorney Rutherford Seydel; and Beau Turner, son of former Braves and Hawks owner Ted Turner.

Levenson and Peskowitz own equal shares that originally totaled a combined 39.4 percent of the partnership, but increased to more than 50 percent and effective control after the buyout of Belkin’s stake.

Levenson declined to provide a current breakdown of specific ownership percentages, saying the group operates as a partnership in which the contribution of each member is not a function of the size of his stake. The owners hold an hour-long conference call every two weeks with team officials.

As the Hawks’ NBA governor, Levenson has the franchise’s voice and vote at the league level. He took the lead in hiring Ferry. And in an indication the league considers the Hawks’ ownership situation stabilized, Levenson is on the NBA owners’ planning committee, which works on revenue-sharing issues, and recently served on committees that interviewed prospective buyers of two franchises that changed hands.

Levenson said the Hawks continue to lose money, but not nearly as much as previously. “More importantly, there is a very clear path now to a sensible economic model,” he said, citing the collective-bargaining and revenue-sharing deals reached last year. “I am extremely bullish on our financial future.”

According to the Hawks, the owners invested $9 million on capital improvements in the past year, including LED boards and a restaurant in Philips Arena and an exterior marquee, and recently approved five new positions in basketball operations and player development.

“When we went through this process of recommittal, we knew … we had to set the bar higher,” Levenson said. “This really is for me about the future, about our commitment.”

The owners’ best-received move might have been hiring Ferry after courting him for three months.

“We had very clear and open conversations,” Ferry said. “I asked very direct questions of (Levenson). He gave very clear and honest answers. He asked direct questions of me. I gave very clear and honest answers. This was a situation I (was) comfortable in, very comfortable that we were going to be given a great opportunity to succeed.

“I wanted to feel comfortable we would be working together going forward. …. I wanted to feel I was working for someone with strong values who I would enjoy working with.”

Among the questions Ferry asked before accepting the job, according to Levenson: “One, were we committed to building a championship organization here? And two, did we have our act together in terms of how we manage this business from an ownership perspective?

“There is no way Danny Ferry comes here,” Levenson said, “if, through his due diligence, he didn’t determine that was the case.”

- Tim Tucker and Chris Vivlamore

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Follow me on Twitter at ajchawks

44 comments Add your comment

paian

October 28th, 2012
9:49 am

myrak43

October 28th, 2012
9:55 am

myrak43

October 28th, 2012
9:55 am

well I was the first to call first anyway

doc

October 28th, 2012
9:56 am

well not tto much new stuff here except a cleare picture of who has the greatest financial interest and why that person has become more of the face of the ownership than gearon jr. nice to know scoreboards will be different. in my opinion that was a huge mistake and oversight that led to a lack of interest/engagement on my part or knowledge about the game when you couldnt easily see who was playing even as not all players are well known individuals on each team.

go hawks!

paian

October 28th, 2012
9:57 am

lol i posted “last” to show how much being “first” matters

Grandmaster JeJe

October 28th, 2012
10:01 am

This is coming from co-managing partners who said for 3+ years they’d go into the LT for the right player but never once made the effort to

myrak43

October 28th, 2012
10:22 am

I am glad the Hawks didn’t trade for Harden. Good player, but he is not what we need. we need some big men. and as far as waiving Damion James…… he seemed to be a nice hustle type player to have on your team, but lets face it we are not a championship team this year. so, it is best to go with guys that will get some playing time. James would not have gotten any. Josh and Horford can rebound we need guys to put the ball in the basket and protect the rim ( centers).

maybe the hawks will make a trade or maybe they will get someone off waivers. who knows. what I do know is that now the Hawks have options. I believe that Josh Haward, Mickael Pietrus, Chris “The Birdman” Anderson, and or Yi Jianlian

or even bring back Benson. I believe anyone of these players or maybe a combo of two would be more beneficial that Damion James!!!!!

keith

October 28th, 2012
10:38 am

Seems that ownership has been too conservative over the years. And, consequently, it has shown in how the team performs(imo). My hope was that they would “think outside of the box”(old worn out cliche) and move to a different “paradigm” when approaching this team, much like a Mark Cuban. Bottom line, they have rarely taken chances or scouted well(San Antonio Spurs). Remember, this same Hawks franchise failed to draft Pau Gasol and Andrew Bynum, just to name a few.

keith

October 28th, 2012
10:45 am

However, it seems that the new general manager will be able to move this team “forward” despite salary cap limitations. What if you exceeded the luxary tax for a season and subsequently ended up in the finals,. The fan base becomes more energized and commited because the ownership group is committed to buliding a contender. And it is a win-win for all, fans, players, and ownership. We reap what we sow.

Slimjr

October 28th, 2012
10:47 am

FTPB

Buddy Grizzard

October 28th, 2012
6:43 am

http://blog.newsok.com/thunderrumblings/2012/10/28/thoughts-on-the-james-harden-trade/

“This Harden trade is going to show just how bad the Jenkins pick was. PJ3 will be seeing a lot more minutes with Harden gone.”

Buddy G,
a few GM’s maybe kicking themselves once PJ3 get’s it going!

OKC must have been really impressed with what PJ3 brought to the table in the preseason and that’s probably why they jettison Harden so quickly?

I also believe if PJ3 stays healthy he may end up being a far superior player to Harden anyway..
OKC made a brilliant move! Lamb can play too! Plus they acquire two 1st rd. picks and and a 2nd?

Harden can play but he’s not a max player.. He’s overrated by a few….

Slimjr

October 28th, 2012
10:50 am

Larry will probably give Jenkins a ton of DNP, coaches decision…. Yawn…

Slimjr

October 28th, 2012
10:55 am

Larry will probably have Jenkins glued to the bench…

keith

October 28th, 2012
10:59 am

I have to admitt, i was hoping that the Hawks drafted Perry Jones III once he fell. I believe he can play the 3 and the 4 in the NBA. He seems to be a more athletic version of Robert Horry or Rashard Lewis. This may be Dannys’ only “questionable” move thus far.

Slimjr

October 28th, 2012
11:03 am

I was wondering this morning if [Priest Lauderdale][7'4" Giant Stiff] may have been they worst 1st rd pick ever by the Hawks…

Slimjr

October 28th, 2012
11:08 am

PJ3 has a far superior handles then the two players said above, He also has a deadly midrange jumper that will not be contested much since he’s 6′11″! This guy has [super star potential] written all over him..

Artman

October 28th, 2012
11:13 am

Keith,

The hawks did draft Pau Gasol and traded his rights for Shareef Abdur-Rahim.

Ken Strickland

October 28th, 2012
11:49 am

SLIMJR-whats to worry about? If he’s not not the worst 1st rd pick ever, he’s definitely miles ahead of #2. Did he ever make it to or through a training camp?

There seems to be a lot of buzz about the Harden trade and if it gives us a chance to sign or trade for him after the season. Well, you haven’t been paying attention if you think DFerry got rid of JJ, Marvin and their contracts just to jump right back into the collecting stupid contract business.

He’s certainly not going to be stupid enough sign an OFF SG who doesn’t play DEF to a long term max contract, especially one that’s a SMOY type player rather than a bonified star or superstar. Unlike some fans, Ferry is looking for the steak not the sizzle, and Harden is just the sizzle. Now, a solid DEF team like the Bulls, who’s offensively challenged, could justify that move.

brigadierjerry

October 28th, 2012
11:50 am

This deal hurts OKC short term because in the trade they do not have anyone to replace what harden does. He did a lot of different things for OKC ball handling, creator, 6th man, etc. Martin and Lamb do not do what Harden brings. I guess they decided they are better off with Ibaka then Harden. Long term will probably be better for them.

PJ3 the jury is still out for him. He reminds me of Jonathen Bender who had bad knees.

tony

October 28th, 2012
11:53 am

Lets hope Danny Ferry can make a push to enter the 2014 nba lottery and try to land Andrew Wiggins the next king of the nba. The lakers and the celtics didn’t build a dynasty without pulling some strings.

Thrashers fan

October 28th, 2012
11:53 am

Gearon and his fellow trolls can go straight to hell.

Big Ray

October 28th, 2012
12:01 pm

Well, as Doc suggested, change in the “face and voice” of the ownership group pretty much did it for the team.

Mike Gearon Jr. isn’t as savvy of a businessman as Levenson, clearly. More like a rich kid playing with stuff he doesn’t understand. Had his hands in way too much and preferred “yes men” like Sund and Pendergraft, both of which I’m glad to see gone.

Levenson was ready to surrender actual NBA dealings to a suit that knows how to do it. Ferry wasn’t going to settle for less. Looks to be a good marriage.

And all it took was what some of us were saying it was going to take – getting Mike Gearon’s grubby hands out of the d@mn soup…

Big Ray

October 28th, 2012
12:02 pm

Poor Thrasher’s fan…the idea that hockey would survive in the south, let alone Georgia, was a misconception to begin with.

Big Ray

October 28th, 2012
12:10 pm

I personally think Houston got HOSED on this trade. I mean, Harden’s a heck of an offensive talent, don’t get me wrong. But I don’t think he can do for the Rockets what he did for the Thunder. He won’t be playing next to guys like Durant or Westbrook. Won’t have defensive “clean-up” guys like Ibaka and Perkins.

If he meshes well with Jeremy Lin, it’s a win for the Rockets in some ways…would be a potent backcourt.

That said, OKC has proven they know what to do with first round draft picks, plus they have Jeremy Lamb to develop and Kevin Martin to score/shoot/get to the FT line in the meantime.

Advantage: OKC

Slimjr

October 28th, 2012
12:18 pm

Ken, excellent points. I do agree Danny will not pull a Sund and try to max out a player like Harden in the off season..

HaHaHa: “Ferry is looking for the steak not the sizzle, and Harden is just the sizzle” -Ken S.-

And yes I do not believe Jenkins was a bad pick.The Hawks could have done much worse. I hope Larry plays him so he can contribute in a meaningful way.

Are you guys ready for some Football Today??????

Falcons trying to go 7-0! The Eagles are desperate for a statement game win!

MV7 has to stay in the game or the Eagles have no chance..

Thrashers fan

October 28th, 2012
12:39 pm

The “hockey doesn’t work in the South” schtick is tired. Teams that win, survive. Period. Hockey’s done great in Tampa, Raleigh, and Dallas, not to mention Anaheim and LA. The difference is that they had competent owners that helped them all win championships. I’m a Hawks fan too, and hearing bball fans trash hockey makes me question you as a fan, no matter how much you post on blogs. The same owners that sabotaged the Thrashers have been mismanaging the Hawks, and using the Thrashers as a scapegoat for not getting quality free agents. If you’re ok with Atlanta losing a pro sport, don’t dare calling yourself an Atlantan.

doc

October 28th, 2012
12:47 pm

tf who is playing hockey now? feel for you. time for reality check; the whole game is in trouble.

think you had it bad? could have watched the islanders for the last 20 years. yeah, asg screwed it up but the hand writing is on the wall for the sport. all franchises are in terrible trouble.

Mike is Back

October 28th, 2012
12:47 pm

Wow, fire LD today…how do cut a live body like James.

doc

October 28th, 2012
12:48 pm

agreed big ray. hope danny boy can spring some trades like that for us.

Mike is Back

October 28th, 2012
12:48 pm

Geeeeeeeeeeeeeeeeeeeeeeeeeze!!!!!!!!!!!!!!!!!!!!

The Fans of Atlanta and the Thrashers

October 28th, 2012
1:02 pm

And we continue to be not fortunate with your stake in the team and the way you ran the Thrashers. I will never support your entity while you are involved with this team.

Astro Joe

October 28th, 2012
1:20 pm

Let’s see what OKC’s development looks like now that they don’t blow. Some of y’all act like the Thunder haven’t drafted anyone since Durant, Westbrook and Harden. Cole Aldrich has developed into what? Easy to develop exceptionally talented and hard working players when they are winning less than 40 games.

Buddy Grizzard

October 28th, 2012
1:45 pm

“This is coming from co-managing partners who said for 3+ years they’d go into the LT for the right player but never once made the effort to”

They went into the luxury tax last year… for Erick Dampier.

BC

October 28th, 2012
1:53 pm

” the Thrashers left”…
This guy is just full of himself. The Thrashers didn’t just get up and move. The owners mismanaged the team from the beginning of their ownership, no different from the Hawks and SOLD them. Trying to act like they are not responsible is really pathetic.

These guys are and always will be just full of excuses. Anybody can get lucky every once in a while (hiring Ferry), but the Hawks will continue to be handicapped by the ownership. Do us all a favor, shut up and sell the team.

Buddy Grizzard

October 28th, 2012
1:53 pm

“He’s certainly not going to be stupid enough sign an OFF SG who doesn’t play DEF to a long term max contract..”

Ken, try and read up a bit before you make these statements. It is precisely because Harden IS a plus defender and Kevin Martin is possibly the worst defender in the NBA at the 2 guard position that people are saying OKC has basically conceeded this season to the Lakers.

And on offense, he’s not just “sizzle,” he’s a player the Thunder were 11 points better with on the floor than on the bench:

http://espn.go.com/blog/truehoop/post/_/id/50711/harden-brings-significant-scoring-value

I think this is a good trade for OKC not because he’s overrated (he’s underrated), but for these reasons:

A. Harden has a me-first attitude. He complained about shots and minutes after they BEAT MIAMI IN A FINALS GAME

B. The economics for OKC dictate that they surround max players Durant and Westbrook with as many value contracts as possible. For Harden, they are getting two lottery picks, another first rounder, the first pick of the second round in 2013 from Charlotte AND an expiring Martin. As someone else said, that’s a Deron Williams haul.

Troll PSA

October 28th, 2012
1:55 pm

Oh joy an unoriginal troll has borrowed his mom’s commodore 64 again.

Grandad

October 28th, 2012
3:04 pm

Slimjr

I disagree about PLauderdale.

SheldonWilliams was worse.
Due to draft position.
As a matter of fact;
Sheldon may have been the worst choice in draft history.

Once again;
Sheldon was not a horrible player.
Just picking him 5th or wherever we picked him was egregious.
Plus we anounced it and refused to trade down.

Mindless !

Grandad

October 28th, 2012
3:11 pm

I agree with Big Ray.

JLamb key for OKC !

Buddy Grizzard

October 28th, 2012
3:53 pm

Mindless !

That’s why “the basketball expert” ain’t workin.

cpsman_atlanta

October 28th, 2012
4:08 pm

Atlanta Hawks basketball is dead to me until every single one of these owners are gone from Atlanta sports. Philips Arena is falling apart. All this ownership is interested in is your money, not winning championships.

I respect Danny Ferry as a player and as a person, but he’s got to be a complete moron to think that this is a good idea.

I still believe in Blueland. I still believe in the return of the Thrashers. My money now goes to the Gwinnett Gladiators.

ag

October 28th, 2012
4:42 pm

More on basketball, how do you cut James? The guy could truly rebound. This is the first year a actually followed preseason, and it is like, damn, first Benson then James. I really don’t see why Tolliver, Stevenson or Petro are on the team.

Najeh Davenpoop

October 28th, 2012
5:10 pm

The Harden trade tells me that Sam Presti doesn’t think his team can beat the Lakers this year. The high lottery picks will make them very strong by about 2015, by which time Kobe and Nash will retire, but they could have very easily hung on to Harden for this season and tried to contend for a title.

Harry Hawk

October 28th, 2012
5:34 pm

Presti made a good deal. He knew that they weren’t going to be able to pay three max guys, so he went out and made the best deal he was ever going to get for Harden. I don’t think it had anything to do with the Thunder’s position vis-a-vis the Lakers. I think it was all about maximizing value and sustaining success. That’s the kind of crap that statheads and long-term thinkers like. One more year with Harden would have knocked his trade value down considerably.

Howard

October 28th, 2012
6:20 pm

As noted by others “Big Ray” is so uninformed its sad. Of course the sport of hockey could succeed in the south.But it cannot survive if the franchise is underfunded and mismanaged for years. (By Levinson and the spirit group) But a plan to succeed was apparently NEVER in place as it seems that the Spirit group ( yes they’re still the Spirit group) took the hockey team in with the Hawks, so that they could sell them to finance the NBA team’s operation. The split with Belkin over the Johnson contract (hmm,maybe Belkin was RIGHT), stalled the deal to sell the hockey team while the group featuring Levinson lied yes lied to the fans. Of course, that same split prevented the Spirit group from selling the hockey team, resulting in the Spirit boys apparently being unable to pay for developing the Hawks. They got lucky when the NHL allowed them to sell the Thrahers (oh the pain and those crocodile tears). and now they’re happy to still be involved with the NBA because now at least for a while they can affoed it (Perhaps). The Spirit group appeared truly unconcerned about the sports community except to the extent they could line their own pockets. I wouldn’t buy anything that results in them profiting a dime. (Hey Chris and Tim, any notion of a critical analysis of what happened, or are you just trying to help them sell tickets? What a puff piece. Sad)

FreshFromATL

October 28th, 2012
6:28 pm

Howard,

U mad?