Are private equity firms like Platinum Equity slowly taking over the NBA?

Fortune editor Dan Primack notes that a new trend is developing in NBA ownership: a growing number of private equity firms are buying into the NBA. Primack notes that the Pistons, Warriors, Celtics and Raptors are now owned by PE firms, and the 76ers reportedly recently reached a deal to sell to a PE firm.

Primack says that PE firms once tried to buy the entire NHL when that league was reporting major financial losses, similar to what the NBA is reporting now, although the NHL eventually remedied itself.

In 2005, private equity firm Bain Capital offered to buy all 30 National Hockey League teams for $3.5 billion. The league was in the midst of a season-long player lockout, after claiming $500 million in losses over the previous two years. But most team owners weren’t ready to turn over their keys, quickly rejecting Bain’s offer and eventually restructuring on its own (including the implementation of a salary cap).

It was the first and last time that private equity had bid on an entire U.S. sports league. But, team by team, it slowly seems to be taking over the National Basketball Association.

Now, I only have a very crude understanding of what a PE firm does (buys assets low, sells them high after restructuring/cutting costs), but I know we have much more savvy readers when it comes to business/financial matters. So I’ll leave the analysis to you in the comments: are large numbers of private equity firms buying into the NBA something fans should be upset, happy or indifferent about?

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