Deal in place for Chinese investors to buy in to Cavaliers

by John Bena (aka CavsBlogger) on May 24, 2009 6:00 PM CDT in Cleveland Cavaliers in the News

As reported this morning on "Fear the Links", the Cavaliersownership group, headed by Dan Gilbert, have been in discussions with Chinese investors about a potential buy-in to the Cavaliers by the Chinese. That deal will apparently become official soon.

The Asian conglomerate, which includes JianHua Huang, a Chinese businessman who has brokered sponsorship deals with the New York Yankees and other sports franchises in the U.S., could acquire up to 15 percent of Cavaliers Operating Company, the entity that owns the team and operates Quicken Loans Arena.

The deal, completed by the sides in recent days, must be approved by the league's board of governors.

Team president Len Komoroski said Sunday the group approached Cavs principal owner Dan Gilbert about the partnership and called the business venture "an exciting new opportunity."

This deal, if approved(and it likely will be because the NBA wants badly to continue its relationship with the Chinese) could have huge implications in the future of the team, and specifically LeBron James.

It is no secret that James is focused on becoming a global icon, and with a deal inplace to create further in-roads to China and Asia, LeBron's star get get bigger and brighter, meaning more income potential. No need for New York if the world is at LeBron's feet.

The move will also provide the team greater capital, something of extreme importance during a tough economy.

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is it clear how this deal is going to be structured? are the chinese buying out existing investors (i’ve read stuff about minority owners being displeased w/ losses)? or is gilbert diluting the existing ownership? given the reports that this will be a capital infusion into the organization, it sounds like the latter.

by DontCallMeJoey on May 25, 2009 4:13 AM CDT reply actions

are the chinese buying out existing investors (i’ve read stuff about minority owners being displeased w/ losses)?

Darren Rovell with the scoop.

he’s one of the first bookmarked blogs i check each morning and multiple times throughout the day.

You know Selig? Ombudsman.

by rolub on May 26, 2009 10:59 AM CDT up reply actions

thanks, man. rovell really is good.

so this is a buyout of an existing investor, which actually means no capital flowing up to the organization. i guess the point as far as new money for the cavs is that these guys have deep pockets and will be willing to foot luxury tax bills, etc., alongside gilbert. that’s the best i can figure.

by DontCallMeJoey on May 28, 2009 12:12 AM CDT up reply actions