Kobe Bryant dropped 61 points on the New York Knicks on Feb. 2, 2009, at Madison Square Garden. The Knicks have been painfully awful for years, appearing in the playoffs only five times since 2000. Here’s a secret: I almost bought the Knicks. Well, “almost” is a stretch.
Sitting bored at my desk at Morgan Stanley in 1994, I got a call from a college friend, John Demitroff, then a G.X. Clarke & Co. bond salesman. “You work for an investment-banking company,” he said. “Could you help Dave DeBusschere and me buy the Knicks?” I think I spit out my coffee.
It turned out that seven years earlier John had overheard that the EF Hutton brokerage firm was raising a $350 million fund to buy National Basketball Association franchises. The next day he read an article about DeBusschere and left a message to pitch him on a business opportunity buying NBA teams. Now this made some sense: No. 22 DeBusschere was an NBA champion, hall of famer, eight-time All Star and even the commissioner of the American Basketball Association when it merged with the NBA in 1976. An old boss had told my friend, “When you see an opportunity, just ask. You never know.”
Sage advice. Amazingly, DeBusschere called back the next day and they met at a downtown New York diner. John explained that he had a buyer (EF Hutton) and needed sellers. DeBusschere knew everyone in the NBA—would he be interested? DeBusschere agreed and they even signed a short partnership deal. And then . . . nothing happened. EF Hutton kited checks and was sold to Shearson Lehman. The partnership unraveled.
Now jump ahead to ’94. The Knicks (along with the Rangers, Madison Square Garden and the MSG Network) were put up for sale by Viacom, which had taken control of its owner, Paramount. That’s when my friend called for help. I was an analyst following tech companies, not even an investment banker; we were just a couple of know-nothing 30-somethings. No matter—I was in.
The first thing I told John was to get “the book.” Investment bank Allen & Co. was running the sale and surely had put together a deal memorandum with all the numbers on revenue and cash flow to help prospective buyers value the company. He called Allen several times saying he was part of a consortium with DeBusschere and wanted the book, but they kept asking for his source of financing. No luck. I also called several times with the same result.
John didn’t give up and asked me what else to try. I said he had to make himself look bigger—the same way you face down a bear. Call a reporter at The Wall Street Journal, I said, and tell him about DeBusschere and the “consortium.” If he could get his name out there, money might show up and we could get the book. The reporter—no dummy—didn’t bite, saying, “Everyone is coming out of the woodwork for the sale.” No story.
There were three serious bidders: ITT- Cablevision, cable giant John Malone’s Liberty Media, and some Canadian company backed by beer money. Wall Street analysts had valued MSG at $600 million to $700 million. I actually think our calls for the book and dropping DeBusschere’s name helped move bids higher. You’re welcome, Allen & Co.
Now what? I told John to call each bidder and ask if they wanted to partner with Dave DeBusschere—at least John might get a job out of it. He called, but got no bites. Then, out of the blue, someone from Liberty called him back and said confidently that they were going to invest $750 million; if he could come up with $250 million, Liberty would win. Being in the middle of things works!
One more detail: Liberty suggested DeBusschere could run the teams. John asked me how to respond. “Tell them you’ll get the money but want a $250,000 salary,” I said, “and a luxury suite at the Garden.” That second request was for me.
A former colleague of mine ran a pay-TV business in Italy, and I pitched him for the $250 million but came up empty. In mid-1994, ITT-Cablevision bid $1.075 billion and won. I kept my day job. We bet on the wrong horse. But still, for two 30-plus-year-old knuckleheads with no relevant expertise, we got close. Now we have a lifetime of stories of what could have been—like the prospect of reading Jason Gay make fun of us every week.
Cablevision bought out ITT’s stake a few years later, and James Dolan has run the Knicks ever since—though some believe into the ground. Maybe, but Forbes values the team at $4 billion. Perhaps Michael Bloomberg will need something to do after Super Tuesday.
Write to kessler@wsj.com.
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