Interesting bit of intrigue (Nets)

foodworld · Aug 19, 2004

Ratner may not be the evil franchise-killer he seems.

Apparently, he didn't sell off the team's best players because he wanted to save money. He was goaded by the investors who bailed on him to do so...

From a really cool fan site

See things weren’t as bad as things may have seemed in Netsland. Apparently, Bruce Almighty was indeed ready to resign Kenyon Martin. He had given Every rose has it’s Rod Thorn the green light to do just that and all seemed well at the Champion Center. It was all systems go, two thumbs up, and start your engines for bringing back the emotional locomotive that is the Blue Light Special.

Except Ratner’s investors had other plans.

Ratner’s three investors, all from the investment firm of Goldman Sachs, decided that they did not want to be saddled with a potential max contract over the next 6 years. In their estimation, it was bad enough that they already had one of those with Jason Kidd.

So before the trigger was to be pulled on resigning KMart, Ratner’s three investors threatened to bail on him if Kenyon was to stay a Net.

At this point, poor Bruce Almighty found himself at the final table of the World Series of Poker with his investors having just gone all in. At stake was either the contract of Kenyon Martin, or $60 million that B- Rat needed to make his sale work. The chips were all in the middle and it was B-Rat’s turn to move. With all the drama leading up to this moment Ratner dug in his heals, stuck out his chest, and with the world watching he made his dramatic move.

He folded.

Ratner succumbed to the requests of his Three Tenors and told Rod to jettison Kenyon to the thin Denver air. We three first round picks in return. All of which mind you will be useless since with KMart and Melo, Denver is now a Western powerhouse and a lock in the postseason for the next 8 to 10 years with their first rounders likely to be in the 20’s year in and out.

Oh but the G-Sachs three weren’t quite done yet Netsfans, not by a longshot. You see only about a week before the bid was to go before the NBA Board of Governors, Ratner’s investors had one more request. Get Kerry Kittles contract off the books.

Ok, so Rod calls for John Nash and his Beautiful Mind, and they put together a deal that would bring Shareef Abdur-Rahim to the fiery swamp. Well, I’m sure the G-Sachs three would have vetoed it anyway, but Steve Patterson of the Blazers saved them the trouble and balked at the deal.

So deadline looming, and the chips all in again. Ratner and Thorn sent Kerry Kittles to the LA Barbershop for a shampoo and blowdry. And a couple of hair curlers.

They folded. Again.

Well the G-Sachs three got what they wanted at the expense of Rod, Bruce Almighty, and all of the Netsfans across the land. And then after all the put Ratner through…

They bailed on him anyway.

If it had not been for the CYO, previous partial owners of the Nets, to come in and pick up the $60 million left behind then Ratner’s bid would likely have hit the tank. And maybe for the better. But we’ll never know, will we Netsfans?

But in the new Matrix that we live in where we can either obey the rules of our new computer masters or defy what has been put in front of us, this is the point where Morpheus lets us in on a little secret.

“Fate, it seems, is not without a sense of irony.”

So Ratner had three investors from the firm Goldman Sachs to help in his bid to move the team to Brooklyn only to have them bail on him last minute. They tried to demolish the organization, the bid, and the love of every Netsfan for their team. And when it was all said and done they pulled an Andy Dufresne “up and vanished like a fart in the wind.”

Before all this nonsense took place, Bruce Ratner competed against a bid to keep the Nets in New Jersey headed by Charles Kushner and Senator John Corzine. Yes Netsfans, the same John Corzine who before his election to the Senate in 2000 was the CEO and Chairman of the Board of, you guessed it, Goldman Sachs.

Hmmm.
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JuanValdez · Aug 20, 2004

Since this was coming out of nowhere, as far as I could tell, I tried to do some fact-checking. I found one article that confirms that 3 Goldman Sachs execs pulled out in July/August.

Nets: Current owners to keep stake in team as Ratner falls short
Wednesday, August 11, 2004
BY MATTHEW FUTTERMAN
Star-Ledger Staff
New York developer Bruce Ratner's difficulties raising $300 million to buy the Nets will require the basketball team's current owners to retain a minority stake in the team longer than they want.

Executives involved with the sale said a recent letter to current Nets owners indicated Ratner has not been able to raise the full $300 million he agreed to pay for the Nets in January.

Nets owners on Friday received the two-paragraph letter informing them of their indefinite financial obligation.

The letter, which was read by an owner to The Star-Ledger yesterday, wasted little time making its point.

"Due to a restructuring of the sale of the New Jersey Nets to Brooklyn Basketball, you will continue to have an ownership interest in the Nets team.

The letter requested signatures acknowledging the continued ownership by last Monday.

In recent weeks, three top executives at the Wall Street firm Goldman Sachs dropped out of Ratner's ownership group, leaving Ratner more than $60 million short, according to an executive handling the sale.

Ed Stier, chief executive at Community Youth Organizations, the group that controls the basketball team, said Ratner called him in recent weeks to deliver the bad news that he had lost several partners and did not have enough money to complete the sale.

Stier said CYO had two choices: Force Ratner to find new investors, which would have delayed the deal, or, retain a stake in the team, which would allow the deal to close, but for less money in the short-term.

Stier said forcing Ratner to find new investors would have jeopardized the complicated transaction separating the Nets and the Devils from the Yankees that has been in the works for more than a year. As a result, CYO's only choice was to allow Ratner's deal to close at a reduced price and hope Ratner finds new investors to replace CYO in the near future.

"We decided to take back paper," Stier said. "We will continue to hold an interest that carries with it maximum protection for CYO in the event the team is sold to another party. We negotiated good transfer rights. Each member can decide whether he wants to immediately sell his interest after the closing."

A spokesman for Ratner declined to comment.

Ratner's representatives moved quickly last week to scuttle rumors his acquisition was in trouble because he had lost investors, and the NBA's finance committee unanimously recommended the league approve Ratner as the team's new principal owner.

That approval is expected this week, but if it does take place it is only because of the financial assistance of the current Nets ownership.

Philanthropists Raymond Chambers and Lewis Katz worked out a similar agreement with former Devils owner John McMullen four years ago after they agreed to buy the team for $175 million. Chambers and Katz were then unable to raise the full amount and McMullen agreed to retain roughly 20 percent of the team for three years. Last summer Chambers delivered a check to McMullen for $35 million.

One Nets owner interviewed last night said Ratner's inability to produce all the money was a major disappointment.

"I thought we were going to get our money and now we're told we have to hang onto the team," said the owner, who asked to remain anonymous. "What good does that do us?"

Stier said he had little choice but to have CYO remain a minority owner temporarily. Otherwise, CYO would have had to remain the sole owner until Ratner, who has already been making nearly all the decisions for the team, could have found new investors.

"Extending the two-owner period would have been potentially been very damaging for the team," Stier said. "Any time you extend a period like that you run the risk the deal will fall apart. To avoid that uncertainty... we agreed we would step in."
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Article

The New York Daily News had a similar article which said in part (though I don't believe them):

Bruce Bender, an executive with Ratner's development company, said it is not unusual for investors to drop out of large projects at the last minute.

He denied Ratner pushed the Nets front office to trade Kenyon Martin and Kerry Kittles for draft picks in order to cut payroll.

"That's absurd," Bender said. "Bruce Ratner is about being competitive. He's always been about being No. 1. For anybody to say he wants to buy a team and not be competitive, they don't know Bruce Ratner."
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It goes on to say that Ratner will negotiate an extension for Rod Thorn.

I can't find any indication, though, that the "G-Sachs 3" were concerned about the size of the payroll.

SamFisher · Aug 20, 2004

I've always liked that JoeNetsFan site. It's no cf.net but its pretty good.

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Interesting bit of intrigue (Nets)

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