Return to glory days just a jump shot away?

Posted: October 19, 2011

If it seemed odd that the new owners of the 76ers would hold a loud celebration Tuesday to mark their acquisition of a becalmed basketball team that plays in a league that currently doesn't exist, then you haven't really paid attention to how these guys run their businesses.

The group led by Joshua Harris and David Blitzer, two men who have done very well moving money from one pocket to the next, didn't buy the Sixers despite the fact the team operates in the red and isn't a very attractive commodity on the market. They bought the Sixers because of that.

"We had to make sure the agreement was favorable," Harris said of the purchase from Comcast-Spectacor. "We were lucky enough to get one of the most successful teams in basketball history at a time when we could get an appropriate deal."

In other words, they stole it. If you don't believe that, check their record.

There was a lot of folderol attendant to Tuesday's news conference at the Palestra, the major theme of which was to wrap the ownership transition in all things Philadelphia, presumably to offset consumer backlash against a group that is decidedly New York. It was a reasonable marketing strategy - cutting ticket prices wasn't bad, either - but the truth is that if the Sixers can become really interesting again and compete for a championship, fans won't care whether the owners jet in from Bali for every game.

(The last time the Sixers organization did the Philly thing was to trumpet the hiring of general manager Ed Stefanski, a neighborhood guy you could bump into down the Shore. Ironically, Stefanski was the first one thrown under the boardwalk by the new ownership. So much for the secret Penn handshake.)

Comcast-Spectacor gladly signed the adoption papers for an unwanted stepchild that was nothing more than another mouth to feed at the table for most of the last 15 years. Harold Katz sold the team for $125 million in 1996, and the Harris group took it off Comcast's hands for a reported $280 million. That's $50 million less than the estimated value placed on the franchise by Forbes magazine, but Comcast had been trying to unload it for years and was ready to shake the hand of anybody who had a checkbook in the other. And, hey, let Forbes pay Andre Iguodala for a while if it thinks it's so much fun.

The Harris group bought only the team, leaving Comcast-Spectacor in control of the arena and the cable rights. Comcast keeps a tenant and keeps its programming and loses the headache of trying to make money in a league that is economic madness at the moment. Harris gets the team and is making a large wager that the NBA comes out of the lockout with a saner business model.

If management prevails and gets what it wants from the players - an additional 10 percent of annual basketball-related revenue, and a punitive luxury tax system that will harden the salary cap into concrete - the NBA could become, on a slightly lesser scale, what the NFL has become - a league in which it is structurally impossible for owners to lose money.

Under that scenario, Comcast-Spectacor would be Norman Braman, the guy who walked away from the slot machine just as it was about to pay off, and Harris would become Jeffrey Lurie, the guy who arrived on the casino floor at just the right moment. The difference would be Harris knew what he was doing.

Whether or not the collective bargaining yields a windfall, Harris said Tuesday that he plans to use the same business logic with the Sixers that he uses in his day job as a partner with Apollo Global Management, which oversees about $70 billion in investments and specializes in rehabilitating ailing, debt-ridden entities.

"I'm prepared to be excited and emotional and involved with the team, but will operate it based on the way we make decisions," Harris said. "I'm not sure why you have to make bad decisions just because it's sports. I don't buy that. There's rationality and there's smart things to do and there's value, even in the context of expense. Even expense brings value on a relative basis."

Which is easy to say until you plot the value/expense graph for Andres Nocioni, for instance.

Those are issues for another time, though, after the actual games return. For now, the new owners have lots of ideas and energy, and all of them either went to school here, or have spent great time here, or truly like cheesesteaks, or would really love to live here if they wouldn't rather live somewhere else. They are Philly proud and promise great basketball and a great night of entertainment - more fireworks, louder music, and additional rabbit mascots! - and business acumen that will return the franchise to glory.

Look, it sounds good and here's wishing them well. If the labor agreement falls their way, they'll have a reason to stick around and fix the team. Fixing a mediocre NBA team isn't like refurbishing a distressed condo, however. The better teams have all the good furniture and they like to keep it. The Sixers are a mix-and-match outfit that will loll around .500 until they get a true superstar. For the time being, they don't have the cap space to do so. Maybe someday.

"We're going to be active, long-term owners," Harris said. "We're going in with our eyes wide open."

Meanwhile, Comcast-Spectacor leaves with its mouth shut. No one showed up at the news conference to hand over the locker-room keys. Those folks were tired of paying dental bills for a kid that wouldn't stop eating candy. The Sixers might straighten out, but that's not how they were betting. The new owners think they will solve the problem and, judging by their resumes, you can't blame them. Smart goes a long way.

It certainly will be interesting to see whether it goes far enough to revive the Sixers but, after the last 10 years or so, just being interesting is a move in the right direction.


Contact columnist Bob Ford at bford@phillynews.com, read his blog at www.philly.com/postpatterns, recent columns at www.philly.com/bobford, and follow @bobfordsports on Twitter.

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