WALTHAM, Mass. — The Boston Celtics, one of the NBA's original and most storied franchises, will be sold to an investment group for $360 million in a surprise deal announced Friday.
Under the agreement, which requires league approval, the team will be owned by a group led by Boston-area venture capitalists Stephen Paglicua and Wycliffe Grousbeck, as well as Grousbeck's father, H. Irving Grousbeck, the founder of Continental Cablevision and now a Stanford Business School professor.
The group planned to buy out current owner Paul Gaston as well as the 48 percent stake in the team owned by a publicly traded limited partnership, which will continue to exist but essentially sell the new owners its stake in the team, Celtics executive Richard Pond said.
The team began selling public shares in 1986, when it won its third NBA championship in five years. Shareholders, many of whom are fans who own just a handful of shares to hang on their wall as souvenirs, have no voting rights.
Boston has won 16 NBA championships, more than any other team, and Forbes Magazine recently estimated the value of the franchise at $218 million, 13th in the NBA, and well behind the first-place Los Angeles Lakers at $403 million.
But veteran Boston sports observer Larry Moulter, former president of the Boston Garden, said the $360 million price was fair considering the new owners would get a lease on the FleetCenter and not have to pay rent.
"It's a brand name that doesn't come on the market often," Moulter said. "It's a legacy brand name."
The team is the second Boston sports franchise to change hands this year. The Red Sox were bought by a group led by Florida financier John Henry earlier this year for $700 million, including debt.
The new owners said they were well aware of the weight of Celtics tradition and fan expectations. The Celtics made the playoffs last year for the first time since 1995 and unexpectedly reached the Eastern Conference finals before losing to the New Jersey Nets.
"It's a tremendous honor to be here," Wycliffe Grousbeck, known as Wyc, said at a news conference at the Celtics training facility. "As we all know, this is the greatest team in NBA history and one of the greatest teams in sports history."
Still, the ownership group did not have its heart set on buying the Celtics. Robert Caporale, a financial adviser to the group, said Wyc Grousbeck was interested in buying a Boston team but didn't think the Celtics would be available. Six months ago the group began general inquiries into buying a basketball, baseball or hockey franchise.
Gaston, chairman of the team's parent company, initially rebuffed the group's advances, but in September decided to sell the team.
There had been no inkling a sale was imminent.
"I wasn't sure if we could keep a secret, but we pulled it off," Wyc Grousbeck said.
Gaston will depart from the team just as it appeared to return to its former greatness after more than a decade of struggles that included the deaths of top draft pick Len Bias in 1986, and star player Reggie Lewis in 1993, as well as the turbulent and fruitless tenure of coach Rick Pitino.
"I wish them well," Gaston said. "My family's had a tremendous 19-year-plus run. It's become very dear to us, almost one of the children, but things change in life and it's time to move on."
Irving Grousbeck, who founded Cablevision in Boston in 1963, made inquiries into buying the San Francisco Giants in the early 1990s when the team was threatening to leave the city, but decided not to pursue the team. The family was also involved in early discussions about joining an investment group to make a bid for the Boston Red Sox, who were sold earlier this year.
Wyc Grousbeck said he would be involved in day-to-day management while his partners would serve a more advisory role. The group said it planned to add to its investor group and had a long list of potential partners.
"As longtime community residents and Celtics fans, our goal is to build on the success that has already been achieved by the team's strong management, coaching staff and players," Wyc Grousbeck said. "We look forward to years of involvement with the greatest sports team ever."
Gaston and then-fellow owners Paul Dupee Jr. and Alan Cohen sold 40 percent of the team for $18.50 per share in 1986, but the novelty of owning a part of the team wore off. And as the team faded into mediocrity on the court in the early 1990s, so did its shares. They closed Friday up 20 cents at $10.60, though that price does not account for splits.
After the announcement Friday, the Celtics released their financial results for the year ending June 30. The team reported profits of $4.6 million, or $1.62 per share, up from a loss of $4 million, or $1.27 per share, a year ago.
Under the proposed sale, shareholders of the public company would receive $173.9 million for their share of the team, which could then be used to offset liabilities. It was not clear how leftover funds would be used.