Boston Celtics Sale Document Casts Light on NBA Business Model

The Boston Celtics won their record 18th NBA title this year, one more than their longtime rival, the Los Angeles Lakers. Boston now has another record in its sights—the most expensive NBA team ever sold, and potentially the most expensive team across all sports.

A document prepared for prospective buyers outlines what factors may go into the eventual final price.

In June, lead owner Wyc Grousbeck hired a pair of banks, BDT & MSD and JPMorgan Chase, to sell the franchise for estate purposes, with a plan for him to run the team until 2028. The richest price ever paid for an NBA team was $4 billion for the Phoenix Suns, and Josh Harris set the mark in all sports last year at $6.05 billion for the NFL’s Washington Commanders.

The Celtics are an incredible brand poised to win now, but unlike just about every other elite franchise in the U.S., they don’t operate their venue. The Celtics are a tenant at Delaware North-owned TD Garden. Delaware North is controlled by the Jacobs family, which also owns the NHL’s Boston Bruins. Yes, the tenant status keeps capital expenditures down, but it means the Celtics don’t capture the revenue from concerts and other non-NBA live events that have boomed coming out of COVID-19. It also limits revenue from sponsorships and premium seating.

The Lakers are the only other team among the top 10 most valuable in each of the four biggest leagues that doesn’t run its venue—the New York Knicks and New York Rangers don’t technically operate Madison Square Garden, but franchise owner Jim Dolan controls all three assets.

The unique nature of the Celtics’ business has caused sales price estimates to range even more extremely than the typical parlor game among bankers, investors and team executives when a franchise hits the market. During Sportico’s NBA team valuations project, forecasts ranged from $4.5 billion to $6.5 billion. We valued the team at $5.66 billion, including its 20% stake in NBC Sports Boston, sixth highest in the NBA.

BDT put together a sales prospectus for potential bidders that details the team’s past financials and projections on the business. Gross revenue was $493 million for the 2023-24 season, according to someone who reviewed the document. The largest revenue source was $149 million from all ticketing streams, including general, premium and secondary. Prices are among the highest in the league, and a season ticket waiting list of more than 14,000 names indicates more pricing power is available.

The NBA payout was $124 million, including $99 million from TV and another $25 million from other equally shared league revenue streams. Local TV was $70 million, including $13 million in equity income from the Celtics’ RSN stake.

The Celtics’ title run generated $102 million in gross revenue before the NBA collected 25% of the playoff gate to fund the player playoff pool. Sportico estimates the Celtics’ net revenue after playoff and regular season revenue sharing at $465 million. The team made roughly $30 million in earnings before interest, taxes, depreciation and amortization last season, with a luxury tax bill north of $40 million.

The Celtics have $300 million in cash, and debt of $325 million, with most of it at an interest rate of around 5%, according to the BDT prospectus.

The Celtics are poised to win more titles with All-NBA stars Jayson Tatum and Jaylen Brown both under contract through at least 2028-29—Tatum’s deal runs through the following season. Their deals are the two richest in NBA history at $314 million (Tatum) and $285 million (Brown). Derrick White ($126 million) is also signed through 2028-29, with the last year a player option. Spotrac estimates the Celtics’ luxury tax bill this season at $65.6 million.

The hefty payroll commitments have raised questions about future operating losses for the team if it does not reach the NBA Finals regularly. Some estimates have its luxury tax bill topping $180 million for the 2026-27 season. BDT projects a much lower tax for that year and then the tax bill nearly disappearing for the 2027-28 season, which would mark Grousbeck’s last year as governor, based on his projected timeline for the full ownership transition.

There is certainly some flexibility in thinking about roster construction around payroll. Roster decisions this past summer by the Golden State Warriors and Los Angeles Clippers indicate the NBA’s new second “apron” might give teams pause to not blow past the tax threshold.

At $5.66 billion, Sportico values the Celtics at 14.5 times their regular-season revenue last year. The multiple shrinks with the new TV deals kicking in for 2025-26. And logic might go out the window regarding the C’s, as marquee sports brands rarely come up for sale in the NBA or other major U.S. sports leagues.

The Lakers (1979), Chicago Bulls (1985) and Knicks (1997) were all sold more than 25 years ago. The Los Angeles Dodgers and the Toronto Maple Leafs were the last top-five teams sold in their respective leagues—both in 2012. Others, like the Chicago Blackhawks (1954), New York Yankees (1973) and Boston Bruins (1975), have stayed in their ownership families for decades.