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Businessman buys Cavaliers for US$375 million
At 5-foot-6, Dan Gilbert never had a realistic chance of playing in the NBA. So he discovered another way into the league: owning the Cleveland Cavaliers.
"It's been a long, long dream," said Gilbert, founder of Quicken Loans. "I'm definitely pinching myself. This is something I've talked about since I was a kid 30 years ago."
The Detroit businessman heads a group of investors that will assume ownership of the Cavaliers and operational control of the 20,000-seat Gund Arena once the league's Board of Governors approves the deal.
Gund and his brother George bought the team from Ted Stepien in 1983 for $20 million. Gordon Gund will maintain a minority stake of at least 10 percent, a source with knowledge of the terms of the sale told The Associated Press on condition of anonymity. The amount of cash changing hands will be further reduced by Gilbert's assumption of debt, the source said.
In buying the Cavaliers, the 42-year-old Gilbert has satisfied a sports craving that dates to a childhood spent rooting for the Detroit Lions, who have endured years of frustration — just like the Cavaliers. Gilbert failed in an attempt to buy the Milwaukee Brewers last year.
Primarily because of James, the league's reigning Rookie of the Year, the Cavaliers, who won just 17 games two years ago, have never been more visible or valuable since joining the league in 1970.
"As great as one person might be, you can't base your decisions on one person," Gilbert said. "He's certainly a big part of the equation."
Gilbert said he has no plans to relocate the Cavaliers, a possibility that had made Cleveland residents, some of whom are still bitter about Art Modell moving the Browns to Baltimore in 1995, nervous when they heard Gund was selling.
"They will be staying put in downtown Cleveland — right where they belong," he said.
The Cavaliers have a lease agreement with the city that runs through 2027.
Because of strict NBA rules, Gilbert was unable to discuss any of the tough personnel decisions he'll be facing in his first few seasons as owner. Cavs center Zydrunas Ilgauskas and guard Jeff McInnis are in the final contract years, and after next season, the team will be able to offer James a multiyear extension.
"We'll have to be smart about things," Gilbert said.
James said he had yet to talk with Gilbert, but felt confident there would be little changes to the organization.
"It's not going to change things, I think they've got the best interest at heart about our franchise and players," James said before the Cavaliers played the Charlotte Bobcats. "It's going to be nice to try to get to know the guy and build a relationship."
A communications major at Michigan State, Gilbert began building his business in his first year of law school when he invested $5,000 — his life savings — to launch the online mortgage business Rock Financial.
In 1998, he sold the company for $370 million only to buy it back four years later. According to Forbes, Rock Financial closed mortgages totaling more than $12 billion last year.
Gilbert's cutting-edge background as an entrepreneur — his company's in-house rock band plays at monthly meetings — and his age have drawn immediate comparisons to Dallas owner Mark Cuban, known for his brash business sense and animated courtside antics. Gilbert, though, plans to cut his own path. "There's only one Mark Cuban," Gilbert joked, "and my hair is a lot shorter than his." He does plan to copy one of Cuban's traits. To win in the NBA and hopefully bring Cleveland a championship, he'll have to spend. With the Cavaliers, he'll apply the same principles that have made him a business success. "Money follows, it doesn't lead," he said. "We're going to look for great revenue opportunities and if we can peg them, the expenses take care of themselves. We will do whatever it takes to build a winner."
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