SAN FRANCISCO – A few days after the transaction had been finalized with the expected approval from the NBA’s Board of Governors, Joe Lacob and Peter Guber were in a hotel suite downtown, discussing what will always be one of their most stunning victories, even if wins start coming in June.
They didn’t just buy the Warriors. They beat Larry Ellison to buy the Warriors.
It is nothing less than one of the great upsets of this or any other season. No exaggeration. Lacob and Guber had deep roots in sports ownership, and Lacob had an NBA tie with a minority stake in the Celtics, and both obviously have major spending power. But Larry Ellison is Larry Ellison. The software tycoon, a Bay Area resident, reportedly spent an estimated $100 million on his America’s Cup victory in February. A month later, Forbes listed him as the sixth-richest person in the world, with a net worth of $28 billion.
Put it this way:
Paul Allen in Portland and Mikhail Prokhorov in New Jersey are the ridiculously wealthy among NBA owners. Ellison is worth more than both combined.
In the end, Lacob and Guber headed the group that delivered the winning bid of $450 million, a record for an NBA franchise, while Ellison put out a statement claiming that he, in fact, made a higher offer. The company that handled the sale for Chris Cohan indicated the Ellison offer came late. Lacob, the managing partner with a venture-capital firm, and Guber, the chairman of Mandalay Entertainment Group, claimed the long-shot victory that became official last week and led them to a round of interviews in the hotel suite with sweeping views.
“We didn’t beat Larry Ellison,” Guber said. “That’s too much of a headline. We didn’t beat Larry Ellison. That’s why they play the game, so to speak. You go in there and do the things you need to do to win, you follow the strategy, you execute a business deal, a transaction at the highest possible level, paying attention to the right details. And then, [stuff] happens. You get fortunate. We’ve been close on a couple of transactions that felt extraordinarily close, right at the wire, both together and individually. This one connected.”
But this one seemed to have the feel all along….
“That he was going to get it,” Lacob said of Ellison.
Exactly. The Oracle CEO does tend to get what he wants.
“We heard all that too, and we even thought that,” Lacob admitted, laughing. “I remember Peter and I talking about this during the process. We said, ‘We can’t really worry about him. We just have to do what we think is right. We have to do our homework, we have to bid at the appropriate time, we have to bid the right amount, we have to do our due diligence properly, and we just stay in the game because you never know what’s going to happen.”
Guber: “He said it a hundred times if he said it once. A hundred times. Really. Over and over and over again. That kind of single-minded focus, not getting on to somebody else’s game plan, staying what you think is the right way, keeping inside the bounds of what’s good business. And I think he was right way.”
Lacob: “The truth is, in the end, who’s to say why. Larry could have had the team probably at any time by just writing a bigger check. And he certainly could afford to do that. I really don’t know why he didn’t do that. Maybe it’s one of these things where you just don’t think the other guys are real in a bidding process. We were a little bit under the radar. We just stayed in there and did our thing. I guess the one thing I would say is that when it came down to it and we knew we had it, or were very close to having it, we did do one thing that was rather unusual. We signed a letter of intent. Then it usually takes a couple months to do what’s called a complete purchase-and-sale agreement. We went and did that in a period of about 72 hours. Completely. Nonstop. Without sleeping. With our lawyers. We knew that they, or he, or whoever – we didn’t know who the competitor was – would try to come in over the top at the end. It’s an auction process. We just said, ‘We’re going to be done before they ever get there.’ ”
And when Ellison claimed he made a better offer?
“I don’t know,” Lacob said. “I think he probably – look, he’s not used to losing. Maybe he thought he was going to get it and was disappointed. I don’t know. Who’s to say? All I know is that we were there, we wanted it very badly, and I do think we were the right guys to win this, to own this team. We’re committed, we’re passionate, we educated, we spent many, many, many years getting educated on sports and on the NBA. We’ve both been involved in sports businesses now for 15 years or longer. We knew what we were doing.”
“Using a basketball analogy,” he was asked, were you guys the team that snuck up on people? Is that how you won this?
“Maybe it snuck up on the press,” Lacob said.
“But even you said Larry and other people may not have seen you coming.”
“We didn’t do this in the dead of night,” Guber said.
“It was an open auction,” Lacob said. “… But it is possible that our names, for whatever reasons, were not bantered about in the press as often as some others. I can’t really say why that happened or how it happened, but it did, and that probably was an advantage for us, I guess it’s fair to say.”