UAE investors may buy Detroit Pistons basketball team
Investment groups in Abu Dhabi, Dubai and Qatar are in separate discussions to buy the Detroit Pistons basketball team, which has been valued at close to US$500 million (Dh1.83 billion).
Negotiations are "ongoing" for a potential Middle East buyout of the franchise, said David Stern, the commissioner of the National Basketball Association (NBA).
"The interest and discussions have taken place in reference to Dubai, Abu Dhabi and Qatar. There is more than one discussion," Mr Stern said.
"That is a team that has been, and is having negotiations with different potential investors," he added, declining to name the parties involved.
Mikhail Prokhorov, the Russian billionaire, recently bought the New Jersey Nets franchise, marking the first foreign ownership of an NBA team. This purchase "ignited and catalysed" foreign interest in ownership of the teams, said Mr Stern.
"We are either in direct or indirect discussions with at least three buyers in the Middle East over their interest in acquiring NBA franchises," he said. "We are mindful that of the 20 teams in [English Premier League football], 10 are owned by investors outside the UK."
The NBA is also considering the UAE as one of several possible locations for the formation of its Middle East headquarters.
"Next year we will be deciding where the best place is to establish the NBA's Middle East headquarters," said Mr Stern. "[The UAE] is one of several [locations on] which we're having discussions."
Aly el Hamamsy, the managing director of the NBA in the Middle East, said that "we expect to reach a decision shortly … We're considering a number of options".
The NBA will hold an event in Abu Dhabi starting today called NBA JamFest in partnership with the events company Flash Entertainment. The event, which runs until Saturday, will be "our biggest event yet in this part of the world", said Mr el Hamamsy.
Forbes last year valued the Detroit Pistons at $479m, one of the highest valuations of any team in the NBA. But it added that the Pistons are likely to sell for as much as $125m below their current value because of Michigan's high unemployment rate and the lack of available corporate buyers for luxury suites and signage.
The Pistons are owned by Karen Davidson, who inherited the team after the death of her husband William.
Last month Mrs Davidson ended exclusive negotiations with Mike Ilitch, the owner of the Detroit Red Wings hockey team and founder of the Little Caesars Pizza chain, after terms over financing and the price could not be met, according to Sports Business Daily.
The publication reported Mr Ilitch had reduced his offer but Mrs Davidson has begun to contact previous bidders to see if they are still interested. But Mr Ilitch is still considered to be a front-runner in negotiations.
The Pistons are one of the most storied franchises in the NBA, dominating the league in the 1980s, and have won five championships, most recently in 2003.
The NBA is one of the most lucrative sports in the US, generating about $4bn in revenues last season, according to Plunkett Research. There are 30 teams in the league across the US and Canada, with an average game attendance of 17,149 spectators last season.
According to Forbes, the average team value in the NBA is about $367m. In comparison, the average Major League Baseball team is worth $491m, while the average National Football League team is worth about $1bn.
The US sports market is also the biggest in the world at $414bn, buoyed by the $27.3bn spent on sports advertising, according to Plunkett.
Updated: December 2, 2010 04:00 AM