Reports: Thomas Agrees To Sell CBA
Wednesday, June 28th 2000, 12:00 am
By: News On 6
Isiah Thomas has signed a letter of intent to sell the Continental Basketball Association to the NBA players' union, USA Today reported Wednesday.
The move apparently would pave the way for Thomas to become coach of the Indiana Pacers, succeeding Larry Bird.
Meanwhile, Thomas still owes about $750,000 from his purchase of the CBA, The Indianapolis Star reported.
Neither Thomas, the NBA nor the union was immediately available for comment.
The National Basketball Players Association was expected to make an announcement Thursday regarding the letter of intent.
To take the coaching job with the Pacers, or any other job in the NBA, Thomas has to sell the CBA, which he purchased for $10 million in October 1999. USA Today said he originally approached the NBA, which offered him $10 million and a percentage of the profits.
If the union buys the league, it would put in place the infrastruture that could be used if the players strike or are locked out by NBA owners when the current contract expires in 2004-2005.
The NBA has announced plans for its own developmental league, starting in 2001.
The Star, which examined league documents and interviewed former team officials, quoted the CBA's president as saying the debt would be paid in full. It also said the debt would not affect Thomas' chances of becoming coach of the Pacers.
Thomas had hoped to build the CBA into a developmental league for the NBA. The purchase included nine teams, the league and the league's marketing and licensing arm, CBA Properties.
CBA president Don Welsh told the Star that Thomas has owed the money for about seven months.
``However, at no time have we ever been in a situation when we have been out of cash,'' Welsh said. ``In all businesses there are various series of raising capital to take your business to the next level, and that is exactly where we are in the growth cycle of the CBA.''
Thomas, an NBA Hall of Famer who led the Detroit Pistons to two championships, is one of two remaining candidates to replace Larry Bird as coach of the Pacers. Rick Carlisle, a Pacers assistant, is also being considered.
According to financial documents and interviews with former team owners, Thomas paid about $5 million up front. The nine teams accepted a note calling for the balance to be paid in four annual installments, starting Oct. 7.
Those payments are not in dispute. In question is the payment of so-called holdbacks, where a buyer and a seller agree to allow the buyer to hold back part of the purchase price to cover unanticipated expenses.
Thomas, 39, negotiated a holdback provision with the league and with seven of the nine teams.
Welsh pledged the money will be paid in full. He blamed the delay on accounting differences between the teams, the league and Thomas. He said checks will go out shortly, but did not specify when.
``Isiah Thomas is an honorable person and will fully comply with everything he agreed to in the purchase of the CBA, and all owners will be fully paid with what is rightfully owed to them,'' he said.
That pledge failed to mollify some owners, who said Thomas stopped returning their phone calls and failed to meet to resolve the matter.
Some former owners worry that Thomas' existing debt will mean further delays when the annual payments totaling about $1.25 million become due in October.