Pallotta is selling his eight percent stake to Steve Pagliuca, a managing director at private investment firm Bain Capital, in a deal that values the Celtics at $2.8 billion, Sportico reported. Pagliuca is a Celtics majority stakeholder and executive committee member for Boston Basketball Partners, the consortium of investors that bought the team in 2003.
Pallotta, like Pagliuca, is a billionaire serving as the founder and head of the Raptor Group, a private investment company. Palotta had previously worked for 16 years with legendary investor Paul Tudor Jones, a pioneer of the modern-day hedge fund industry.
The deal is pending NBA approval, according to Sportico. Both Pallotta and Pagliuca declined to comment.
The sale highlights the value of the Celtics, a team considered to be among the NBA’s most valuable franchises. The team has an estimated valuation of $3.1 billion, according to Forbes.
Minority stakes in professional sports franchises are often difficult to sell and offered at a discount compared to the team’s valuation. Despite their steep price tag, the stakes rarely provide the operational control often sought by wealthy buyers.
The financial impact of the coronavirus pandemic further complicates franchise sales in the current sports environment. The pandemic forced the Celtics and other NBA teams to conclude the 2019-20 season in a “bubble” environment at Walt Disney World resort in Orlando, Florida.
The New York Knicks are the NBA’s most valuable team, with an estimated valuation of $4.6 billion, according to Forbes.