During the years that Red Auerbach ran the Celtics, the organization was a paragon of stability and tradition. First Red coached the Celtics, and then, often, the players he coached coached the Celtics. The uniforms didn’t change, and banner after banner of the same plain type accumulated in the rafters of the old Boston Garden. One by one, player numbers were retired and raised to the same lofty position above the most storied court in the National Basketball Association. From a basketball perspective,
the Celtics were about as solid and stable as the rock of Gibraltar.
But that stability was not reflected in team ownership.
After Walter Brown died unexpectedly in the fall of 1964, the Celtics went through a twenty-year period when ten different ownership groups controlled the team.
In 1983, the Celtics were purchased from Harry Mangurian by a consortium led by Don Gaston. Gaston had been an executive with Gulf+Western when they owned the Knicks, having purchased Madison Square Garden and its tenants in 1977.
Gaston’s consortium included Boston native Paul Dupee, and Alan Cohen, who was an executive with the New Jersey Nets at the time—both were also Gulf+Western alumni. The sale price was reported to be $15 million.
Gaston, a Texas native, had left Gulf+Western in 1982 after assembling a group of investors that purchased Providence Capitol International Insurance Ltd., and Famous Players Realty, Ltd. from Gulf+Western for $350 million.
About three years after purchasing the Celtics, Gaston and his partners decided to share the wealth while creating some wealth for themselves.
They sold 40% of the Boston Celtics on the New York Stock Exchange on December 3, 1986.
This was the first—and so far only—time that a sports franchise has been publicly traded.
It provided an opportunity for any number of Celtics fans, including my dad, to claim an ownership stake in what could in a very real sense now be called ‘their’ team.
It was also an excellent move for the wallets of Boston’s ownership group. Having paid around $15 million for the team in the fall of 1983, they recouped about three times that in an IPO that simultaneously lined their pockets with an estimated $48 million in cash and boosted the valuation of their holdings to about $72 million—not a bad return overall. At the close of the first day of trading, the Celtics were valued at $120 million, give or take. This was an astronomical price for a professional sports team at the time.
For the next sixteen years and change, the Celtics were, partially, a publicly traded entity.
The IPO was the brainchild of Charles Weiss at Smith Barney, an investment banking firm that didn’t survive the 2008 financial crisis. His idea was to create a series of “Master Limited Partnerships” in which sports franchise owners could raise a significant amount of capital by selling a minority stake on the market; master limited partnerships would also ease the tax burden that sports teams would face, as income would be distributed to partners who would pay taxes individually. Gaston and his partners, who were always businessmen first, leaped at the opportunity.
The Celtics IPO was a relatively small float of 2.6 million shares.
It ended up in the hands of about 95,000 investors, meaning the average shareholder was sitting on just over 27 shares. This created an enormous headache whenever dividends came due. It cost the Celtics roughly $1 million per year just to print and mail out the quarterly checks. These quarterly dividends, always under a dollar per share, were quickly turned into an annual distribution which saved considerable money in postage and printing. Adding to the headache was the fact that roughly one out of every ten stockholders failed to deposit those dividend checks.
Celtics fans held onto their shares, too. On any given day, fewer than 2,000 Boston Celtics Limited Partnership shares might change hands on the New York Stock Exchange. Far more stock certificates were likely to be found hanging on the walls of offices and dens, and, in the case of particularly tolerant spouses, perhaps even in living rooms.
In exchange for a sudden influx of cash and a boost to the bottom line, trading on the stock exchange required that the Celtics open their books to public scrutiny in a way that no team before or since has had to. In addition to player contracts, which were generally reported on and public knowledge, salaries of front office personnel were revealed. For example, it turned out that Red Auerbach was making a relatively modest $250,000 per year, an amount that had been guaranteed for Red’s lifetime in a contract with the new owners.
In 1998, a ten-year provision that had kept the favorable tax treatment of income under master limited partnerships in place expired. As a result, the Celtics were reorganized into a byzantine structure in which individuals who held more than 100 shares would be eligible to obtain partner status, while smaller investors would receive a share in the new entity along with $20 in subordinated debt per share: basically, they would be given an IOU from the Celtics guaranteeing payment of 6% annual interest (or $1.20), and, in forty years, repayment of the full $20.
This new structure was arranged in an effort to preserve the pass-through treatment of income that had been in place with the master limited partnership.
Under the new arrangement, the Boston Celtics were owned by a partnership, Celtics Basketball, L.P., which, in turn, was owned by Celtics Basketball Holdings, L.P. 48.3123% of Celtics Basketball Holdings, L.P. was owned by Boston Celtics Limited Partnership II, or “BCLP II,” which was, in fact, the original Boston Celtics Limited Partnership. A new Boston Celtics Limited Partnership, “BCLP,” owned 99% of “BCLP II.” BCLP was the entity with publicly traded shares, while BCLP II was the entity that issued the $20 debentures.
Presumably there were tax advantages to having this many tiers of ownership over the Boston Celtics, and it seems likely that such convoluted arrangements are in place with other teams, now that professional sports have become a big business.
In fact, it could be well argued that the Celtics IPO was the beginning of the ‘big business’ era for sports franchise ownership.
At a swoop, the valuation of the Celtics jumped from $15 million to $120 million. Ownership of a basketball franchise, which had been more or less a hobby for the well-heeled up to this point, suddenly became a realm where serious cash was required to buy into the game. With that cash came expectations regarding revenue growth and profitability.
Available documents from the SEC’s EDGAR online database of filings from 2001 and later show that there were still about 58,000 individual stockholders at the time that Wyc Grousbeck’s ownership group put in an offer for the team.
These individuals, many of whom had likely held onto their shares going back to the initial public offering, or a few months afterwards, were paid $27 for their share, which, along with redemption of the $20 debenture, meant a $47 return on an initial investment, if made around the time of the IPO, of about $18. This was about a 261% gain, not counting dividends.
Interestingly, this reflected an approximately even return on investment compared to what Gaston and company had accrued based on the team’s valuation at the time of the IPO. The net sale price of the Celtics in 2002 was $310 million, which was a 258% increase over the IPO’s valuation of around $120 million.
However, Gaston, Dupee and Cohen had bought the team for just $15 million, and the return on their cash outlay amounted to about 2,067% when the team sold in 2002, not counting the $48 million that they had received from the IPO. Grousbeck’s group paid $360 million for the Celtics, which was a record sum for the NBA at the time, but $50 million was used to retire various debt obligations, including the debentures that had been distributed to shareholders in 1998.
This sale marked the end of an interesting experiment in franchise ownership during a period that saw valuations of professional sports teams skyrocket. This trend has only continued with the record sale of the Celtics in 2025 for $6.1 billion, a sale price that was rapidly eclipsed by two different sales of the Los Angeles Lakers, first for $10 billion and then, less than a year later, $12.5 billion.
The irony is that an IPO that marked the transformation of sports into big business also made it possible for ordinary fans of every stripe to own a piece of their favorite team, at least for a time.
