POSTED: Apr 16, 2014 6:18 PM ET
UPDATED: Apr 17, 2014 12:19 AM ET
MILWAUKEE — The future of the Milwaukee Bucks became a lot more stable Wednesday.
Owner Herb Kohl, the former U.S. Senator who purchased the team in 1985, announced he had reached a deal to sell the team to investment bankers Wesley Edens and Marc Lasry.
The sale price is approximately $550 million.
Kohl had made it known that any sale of the team was under the condition that new owners would keep the team in Milwaukee. Any question of the new owners' commitment to Milwaukee was put to rest with the announcement that Edens and Lasry would put up $100 million of their own money toward a badly needed new arena.
That announcement was followed by a similar commitment of $100 million from Kohl toward a new arena, putting the Bucks nearly halfway home on the cost of a new home.
"Today we are announcing great news for the Milwaukee Bucks, for the Greater Milwaukee community and for the entire state of Wisconsin," Kohl said at a news conference. "We're following through on an announcement that we made just a few months ago that we were launching an effort to find additional investors in the Bucks to help strengthen the franchise and help keep it rooted here in Milwaukee."
Each of the new co-owners own Wall Street investment firms. Edens is a Principal, Founder and Co-Chairman of the Board of Directors of Fortress Investment Group LLC. Lasry is Chairman, CEO and Co-Founder of Avenue Capital Group.
Neither Edens nor Lasry are from Milwaukee, although Edens said he has family roots in Wisconsin. He noted that his mother was born and educated in Wisconsin.
The sale is pending the approval of the NBA's Board of Governors, who will be meeting Thursday. But the official statement from NBA Commissioner Adam Silver is an indication that the sale will go through.
"As a public servant, philanthropist and owner of the Bucks, Senator Herb Kohl has had an extraordinary impact on his home city of Milwaukee and the State of Wisconsin," Silver said. "His historic and unprecedented $100 million give to the city of Milwaukee to secure the future of this franchise emphatically underscores his passion, commitment and generosity to his community."
Lasry is a minority investor in the Brooklyn Nets and will have to divest of that before the sale can officially go through.
Kohl came close to selling the team in 2003 to a group headed by Michael Jordan. He backed out of the deal when he wasn't comfortable with Jordan's commitment to keep the team in Milwaukee. Another 11 years later, and having turned 79, Kohl wanted to make sure the Bucks remained in Milwaukee well beyond his time.
"I wasn't going to live forever," said Kohl, who won his seat in the U.S. Senate in 1988 and served four six-year terms before retiring. "I've approached the time in my life where I had to think about how do we approach the idea of a successor. And then, it was brought to a head by the need for a new building and the fact that that's a project over several years. That doesn't get done in a short time.
"It came to me and it was very clear that the owners of the team over the next period of years should have a central role in that project. Not me, but them. Site, design, construction, all the other things that are involved in getting to a new facility."
While the sale of the team is big news in itself, the announcement of a $100-million commitment from Lasry and Edens and another $100 million from Kohl toward a new arena was equally huge.
The political mood in Wisconsin toward spending public money on a new arena was far from favorable. The $200 million -- and possibly more in private-sector donations to come -- changes the conversation. Estimates are that a new arena will cost roughly $400 million.
"Other similar arenas have been constructed for $400-ish million," Lasry said. "There are some that are a little more, some a little less. It obviously depends a lot on a variety of things in terms of infrastructure and where. But that's a pretty good benchmark to start with."
With the stunning announcement of $200 million in commitments, Lasry hopes the timetable will not be very long.
"I think the goal would be to plan, design and get funded over the next year or so, and then build it over a couple of years," Lasry said. "It's the kind of facility that should be able to be open in a couple years I would think. We've had a lot of experience with various types of real estate and infrastructure projects, so that's a reasonable timeline."
Kohl purchased the Bucks in 1985 for $18 million. At the time he stepped up to make sure the team remained in Milwaukee. In 29 years of ownership, he's always stressed that keeping the team in Milwaukee was his main priority.
Shortly after Kohl bought the team, which was playing in the small Milwaukee Arena, Lloyd and Jane Pettit committed to build the Bradley Center. That building opened in the fall of 1988. But the building -- possibly because of the Pettits' goal to land an NHL franchise at the time -- never was the perfect basketball arena. While most arenas are on a footprint of approximately 750,000 square feet, the Bradley Center footprint is closer to 500,000 square feet. Amenities that bring in revenue are lacking.
Simply put, the Bucks need a new building to remain a viable NBA franchise.
Lasry emphasized that he had no doubt the Bucks can be successful, pointing to the success of the Green Bay Packers and the Milwaukee Brewers.
Although there is still plenty of political wrestling ahead in getting the new arena built -- particularly where it will be built. Milwaukee Mayor Tom Barrett and Milwaukee County Executive Chris Abele both are firm in their belief the building will be in downtown and probably not far from the Bradley Center.
The fact that Edens and Lasry and Kohl have combined to commit $200 million to the project is also a game changer. While there is still a large bridge to gap, Barrett insisted "we'll get this done."
The news conference came just hours before the Bucks were to close out the worst season in franchise history. They enter Wednesday night's season finale against the Atlanta Hawks with a 15-66 record and will have the best statistical chance to land the No. 1 overall pick in the June draft. Their previous worst season was 20-62 in the 1993-'94 season.