Dear Mat Ishbia
Dear Mat Ishbia
Congratulations on your first year of Suns ownership. However you are taking some serious media shots right now. They are not coming from me. In this era of risk averse corporate team ownership. Your all in approach to team construction has been a breath of fresh air. I don’t think you have gotten enough credit for literally giving away your local broadcasts to your fans. It also appears you are making an earnest effort to rebuild what was a toxic culture within the franchise and front office.
That being said….
I do agree with majority of modern NBA punditry. On the court, the gamble you have taken has come up snake eyes. Your biggest name will be 36 years old next year. Your brightest young star has had six head coaches in nine years. Understandably there are mild smoke signals indicating Devin Booker is looking for a way out. Due to his no trade clause, there is virtually nothing you can do with Bradley Beal.
You are headed towards having the both league’s highest payroll and luxury tax bill next season. With no conceivable path to improvement. Yes, there are plenty of other teams in your “run it back” predicament. However the Clippers are moving into a new arena and could choose not to pay Paul George and James Harden. The Warriors do have a budding young star in Jonathan Kuminga. And history has repeatedly shown if you have LeBron James you have a chance (if he stays with the Lakers)
You felt compelled to give Grayson Allen a four year $70 million extension because you didn’t really have any better options. You have limited draft capital and play in the same conference with teams like Denver, Oklahoma City, and Minnesota. Young successful franchises that do not appear to be going anywhere anytime soon. This is bleak….
Fortunately I have a solution for you. Please don’t tune me out. Despite my last name I am not related Dan Gilbert. Speaking of whom, my solution could serve as the next salvo in your budding little billionaire rivalry.
I’m going to postulate this solution based on three assumptions that I think are pretty self evident. They are as follows:
- You are smart, aggressive, and not afraid to think a little outside the box (ex. Durant trade, local TV deal)
- To say it nicely, you are not afraid to throw your money around (the Phoenix sale happened quickly while you were simultaneously involved in the Washington Commanders purchase)
- Your business and passions are based in the city of Detroit
If you can’t see where this is headed from those three points. I’ll cut right to the chase. You, Mat Isbia need to buy the Detroit Pistons. On the surface this seems insane and impossible. While I can acknowledge the absurdity. At the conclusion of this letter, I will briefly put on my old history teacher hat to explain why this is not impossible nor unprecedented.
Why would you want to pay more money for another team? Well let’s look at the numbers. You just paid a record $4 billion for the Suns. Yes, that is an unfathomable sum of money. As you are well aware, that is just the tip of the iceberg.
Next year’s payroll is scheduled to be a league high $213 million. With a corresponding luxury tax payment of $145 million. Let’s get out the old abacus… Next year you are essentially writing another $358 million check for an asset that appears to be showing diminishing returns at best.
The good news is that this does not appear to bother you. You want a winner and are willing to pay for it. However, what if that money could be better spent elsewhere? Let’s look at the team you grew up rooting for. Your hometown Detroit Pistons.
Yes, they are unquestionably one of the worst teams in NBA history. They are in an undesirable market. They also employ a head coach you recently fired at record salary. However the player payroll is not out of control. They play in a rather new downtown arena (that your company papers in sponsorship) They also feature a new practice facility and a G-League team that plays just down the street in a new facility as well.
While the on court product is substandard. The bones of the franchise are in fairly good shape. The key demerit works in your favor. Fan apathy is at an all time high due to the perception of an absentee ownership situation.
While Tom Gores has deep Michigan roots. His private equity business is centered a coast away in Los Angeles.
So let’s pause here…. In one corner we have a private equity titan who lives on the West Coast. He is alumni of Michigan St. He also bought low on Detroit Pistons. Paying $325 million in 2011. The price included a since demolished world class arena and additional entertainment properties that included one of the premier outdoor music venues in the nation. Just the team itself in now valued at $3.1 billion. In deal making lexicon. Gores got a major steal.
In the other corner we have you— a titan of the home mortgage industry. You are also an alum of Michigan St. But you live in Detroit. You spent 4 billion dollars for a team in desirable market. However your stadium, while it’s been recently remolded. Was built in 1992. The NHL just relocated their Arizona franchise to Salt Lake City due to difficulties in building a new arena. You are most likely stuck in the Footprint Center for a while.
I don’t feel presumptuous by saying this. You would love to own the Detroit Pistons. That’s why Isiah Thomas was at your side after your initial purchase. I’m a mid forties sports fan who grew up in Michigan. I know what the Bad Boys mean to someone from our generation. If I had your balance sheet I would want to own them as well.
So how is this going to go down? That is where Tom Gores’ business comes into play. You Mr Ishbia, operate in the world of cash and debt. Something most of us understand. Gores operates in the amorphous world known as private equity. Gores buys stakes in a wide assortment of companies. Through a variety of machinations that are beyond me. Gores attempts to increase the value of these assets. He buy, sells, and even trades companies.
That is why private equity gets such a bad reputation. A nameless and often faceless entity that is solely focused on increasing value. Consequently let’s examine Mr. Gores options with the Pistons. While it’s not pretty, he essentially is sitting on found money. The value of Pistons has more than quadrupled since he bought it. In private equity terminology, the Pistons are an unequivocal success.
How is Gores going to extract that value? There is only one way. He has to sell the team. Is there someone who is going to give him $3 billion for the Pistons? In Michigan, not really. Just scan the Forbes 400. Virtually every Michigander listed already has a professional sports franchise. The DeVos family has the Orlando Magic. Uncle Dan has the Cavs (I promise we are not related) The Ford’s have the Lions. The Ilitch’s have basically everything else.
Gores could always look out of state. How is that working out presently for the Minnesota Timberwolves? Here is where you come in Mr Ishbia. You don’t want to see an out of towner like Alex Rodriguez own your Detroit Pistons. Fortunately there is something you can do about. What does Gores like more than straight cash? Value and equity.
Your franchise is worth more. Your franchise is much closer both geographically and culturally to his home in Los Angeles. More importantly you are already in the billionaire boys club. You do not need to be vetted financially nor bid against anyone.
Gores could hold to the Pistons. Endure the losing and shots to his image. And hope someday that a suitable owner emerges. Or he could spin his asset into something more valuable. It sounds absurd to us commoners, but Gores performs transactions like I am proposing on a monthly basis.
So let’s get to the nitty gritty. Despite the differences in value. Gores isn’t going to do this for free. Consequently you will include a 1 billion dollar sweetener to make the deal happen. That doesn’t add up on the surface. You have the more valuable franchise. However let’s look once again at what you are staring down next year.
You are writing a $358 million check next year no matter what. You were involved in the early stages of Washington Commanders sale. That purchase topped out at $6 billion. It’s not my money, but I feel safe in saying you have a little more room in the budget.
So what do you say Mat with one T? Sounds good righ….
Oh I almost forgot. Who else might want buy/exchange the Piston? Someone you might have heard of named Dan Gilbert? Which brings one of my favorite quotes from the recent Podcast space. You might remember it….
“He doesn’t like me, and I don’t like him”
Bill Simmons Podcast May 3rd 2023
Not much I can add to that. There is more that I can’t print in this space. In this budding basketball and business rivalry. This would be major win. One that possibly has no price tag for you.
Respectfully yours
Jonathon “not related to Dan” Gilbert
With formal request portion over. Would any of the parties do this? In all sincerity. I think they would.
Mat Ishbia– $5 Billion dollars is a lot of money to pay for the Detroit Pistons. However have we seen anything from Ishbia to say he wouldn’t. He has run up the Suns payroll, given away local broadcasts, and got into a scuffle with Nikola Jokic. Honestly nothing would surprise me
Tom Gores– Here is the tough one. He would drive a hard bargain. It’s his business. It’s what he does. However making $700 million (or more) profit on the Pistons is pretty good. He would also have a more valuable franchise close to where he lives and his business.
The NBA: They wouldn’t be crazy about it. Dan Gilbert would certainly vote no. He abstained from Ishbia’s initial vote. However the commissioner works for the owners. What rich guys want they usually get. Owners generally look out for themselves. There is no reason for the Oakland A’s to be moving to s smaller market in Las Vegas. It was unanimously approved. There are countless examples of owners doing unique, unorthodox, or even illegal things and getting away with it.
However one in particular stands out. It involves the most storied franchise in NBA history, the Boston Celtics.
The Boston Celtics and the Buffalo Braves agreed yesterday to exchange ownerships of the National Basketball Association franchises. John Y. Brown, the co‐owner of of the Braves, will take over the Celtics and Irv Levin, the majority owner of the Celtics, will acquire the Braves and move them to San Diego.
New York Times June 30 1978
Why did this happen? Irv Levin wanted to move the Boston Celtics to California, so he could be closer to his film business— sound familiar? Despite being one of the greatest “what ifs” in NBA history. It shows you that franchise swaps are possible. Bob Irsay obtained the Colts in this manner. It is also essentially how John Henry gained control of the Red Sox.
In conclusion, would Ishbia be any better for the Pistons? I’m not sure. I do know he would bring passion and an acute knowledge and financial interest in the region. A few blocks across Woodward Avenue. We have seen what a little bit of passion can do for a moribund franchise in the Detroit Lions. Maybe Ishbia could pull it off. It can’t get much worse.
