Kohl to sell Bucks for $550 million, pending league approval

Owner Herb Kohl (center) introduces the Bucks' new prospective owners, investment firm executives Wesley Edens (left) and Marc Lasry, at a news conference after reaching a deal to sell the franchise Wednesday.

Morry Gash/AP

MILWAUKEE — An era is officially ending, as Senator Herb Kohl is selling the Milwaukee Bucks after owning the team for 29 years.

At a press conference Wednesday at the BMO Harris Bradley Center, Kohl announced he has entered into a purchasing agreement to sell the franchise to New York hedge-fund billionaires Wesley Edens and Marc Lasry for approximately $550 million, pending league approval.

The sale will be reviewed by the NBA and then voted on by league owners at the NBA Board of Governors meeting in New York on Thursday and Friday.

"We have a strong desire, sometimes an insane desire, to succeed," Lasry said. "We are going to try to establish that and do that here with the Bucks and over the course of the next five to 10 years bring a championship to this city.

"I wish you guys could understand how excited we are and how much we really want to end up building and helping this community and trying to build the Bucks into a phenomenal team again."

To support Kohl’s requirement that the franchise be kept in Milwaukee, the new owners have committed to contribute at least an additional $100 million toward the development of a new arena in Milwaukee. Senator Kohl has also pledged an additional $100 million to a new arena.

"I’m very optimistic, even more so than I can express, about the future of the team here in this city," Kohl said. "We’ve been a fixture of basketball in Milwaukee for 47 years. We have great fans, we have a great, great organization of people.

"We are entering into an exciting new era. We have two outstanding, accomplished men who are buying into Milwaukee and the future of Milwaukee."

Forbes estimated Lasry to be worth $1.7 billion in 2014, while the publication estimated Edens’ net worth at $1.2 billion in 2008.

Lasry is the co-founder and chief executive officer of Avenue Capital Group, a global investment firm with over $13 billion of assets under management. Born in Morocco, the 53-year-old came to the United States as a child.

Edens, 52, is a principal founder and co-chairman of the board of directors of Fortress Investment Group LLC. Founded in 1998, Fortress is a $62 billion alternative asset management company with offices around the world. Edens runs the private equity business side of Fortress.

"We are really looking forward to the experience of being an owner," Edens said. "This is a new stage for the Bucks, this is a new stage for the arena or facility we expect to be building here. It’s a once in a lifetime opportunity to be an owner of an NBA team, it’s also once in a lifetime opportunity to build a facility.

"Milwaukee fans deserve a winning team. This is about winning basketball games. This is about winning championships. It’s about being part of the community. We look forward to all of those."

When asked if one of them will step up as the primary face of the franchise, Lasry said both will be around and active as owners of the team.

"This is a partnership," Lasry said. "We’re doing this together. Part of the reason the two of us wanted to do this (is) we thought if one of us couldn’t be here the other could be here. We are committing substantial resources. It’s a tremendous amount of money we are spending and part of the reason is because we believe in all of this.

"We want to build a great team, we want to build a great arena. We are going to spend a big, big chunk of our time here trying to do that."

Kohl purchased the team on March 1, 1985 from Jim Fitzgerald for $18 million. The Bucks made the playoffs in 14 of the 29 years Kohl owned the team but only made it out of the first round four times and just once since 1989.

Milwaukee has been mediocre for much of Kohl’s tenure, but the Bucks are a league-worst 15-66 entering Wednesday night’s season finale against Atlanta.

The Bucks locked up the best odds to win the NBA’s draft lottery (25 percent) with a loss to Toronto on Monday.

"I wasn’t going to live forever," Kohl said. "I’ve approached a time in life when I had to think about how we approach the idea of succession and then it was brought to a head by the need for a new building and the fact that this is a project over several years. It doesn’t get done in a short time. It came to me and was very clear that the owners of the team over the next period of years should have a central role in the project. Not me, but them."

There’s little question the Bucks will need a new facility within the next few years to be able to stay in Milwaukee. The NBA has been vocal about the need for plans for a new arena by when the Bucks’ lease with the BMO Harris Bradley Center expires in 2017.

Edens estimated a new arena could be built for somewhere around $400 million, with the committed money from Kohl and the prospective owners already totaling $200 million. The proposed new arena in Sacramento has an estimated cost of $448 million.

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"I think the goal would be to plan, design and get it funded over the next year and then build it over a couple of years," Edens said. "It’s the kind of facility that should be built in a couple of years."

Numerous community leaders were on hand for the announcement, including Milwaukee mayor Tom Barrett, Milwaukee county executive Chris Abele, chairman of the BMO Harris Bradley Center board Marc Marotta and Metropolitan Milwaukee Association of Commerce president Tim Sheehy.

All spoke and expressed a level of excitement for what Wednesday means for the future of the Bucks in Milwaukee.

"This is more like a revival meeting," Barrett said. "We should be shouting from the rooftops because this is a game-changer for this entire debate."

As far as the future of those in management positions within the organization, including general manager John Hammond and head coach Larry Drew, Edens deferred comment until after their ownership is approved by the NBA owners.

If a change is made at general manager, the Bucks would have to quickly hire a replacement to begin the evaluation process for what will be a top-four pick in the upcoming draft.

"We haven’t really spent a lot of time assessing the organization in a meaningful way," Edens said. "We’re going to figure it out.

"There’s a big draft coming up and a big talent assessment going into that. It’s an exciting process for the team. We’ll start immediately, but it really becomes in earnest when we’ve closed on the transaction."

An announcement in December revealed Kohl’s intentions to seek additional investors for the franchise, hiring Steve Greenberg, managing director of the New York-based Allen and Company to advise him on the search. It became clear a short time later that Kohl was seeking to sell his stake in the team completely.

A native of Milwaukee, Kohl attended Milwaukee Washington High School and the University of Wisconsin before earning his master’s degree from Harvard University. Kohl joined the family owned Kohl Corporation in 1959, serving in many capacities to the company which ran grocery and department stores. The family sold the corporation in 1979.

Kohl was first elected to the United States Senate in 1988 and was re-elected three times before retiring when his term ended on Jan. 3, 2013.

"It’s been the thrill of a lifetime to own this team," Kohl said. "Owning a team like the Milwaukee Bucks in Wisconsin has been a lot of fun. Certainly a lot of headaches, but that’s true about any business you run. That’s true about life.

"Life is full of ups and downs in whatever we do, but the thrills, happiness and good vibes I’ve gotten over the years are indescribable. It’s been just great."

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