Comcast buying 76ers, Flyers, CoreStates Center and Spectrum

 

 

(Editors note: This story was published on March 20, 1996.)

Comcast announced yesterday that it had agreed to buy majority stakes in the Philadelphia 76ers and Flyers, as well as the new CoreStates Center and the old Spectrum on South Broad Street, completing a megadeal that suddenly makes the cable giant the dominant player in Philadelphia professional sports.

And there may be more to come.

There were strong indications yesterday that the Phillies were edging closer to involvement with the Comcast-Spectacor venture, the new entity that will own and manage the 76ers, Flyers and the two arenas.

There were no signs that Comcast-Spectacor was seeking to buy the Phillies, or that the partnership that owns the Phillies was seeking to sell.

But Comcast-Spectacor has already approached the Phillies about a broadcast partnership, and sources said the Comcast group could be a source of cash to help the Phillies build a new stadium.

One source with knowledge of the discussions said yesterday that Phillies president Bill Giles' talks with Comcast-Spectacor on putting the Phillies on a new sports station had extended into issues involving construction of a baseball stadium.

Ron Rubin, a Center City real estate developer cited as a "matchmaker" in yesterday's deal, has been involved in those talks, along with longtime Flyers owner Ed Snider, who will become managing partner of Comcast-Spectacor.

A Comcast executive said discussions were "only in the context of creating a [sports] channel, cooperative stuff with regard to sports rights." He said there had been no talk of becoming involved in the Phillies' ownership.

Comcast-Spectacor now has 66 percent of the Flyers, the 76ers and the two arenas, after contributing $250 million in cash and stocks and assuming 66 percent of their combined $180 million debt, Comcast president Brian Roberts said.

The sale of both teams is subject to approval by the National Hockey League and National Basketbakll Association.

The deal, announced at a packed news conference at the Ovations club at the Spectrum, marks the end of Harold Katz's 15-year stewardship of the 76ers. He paid $12 million for the team in 1981, and said yesterday that he received "significantly more" than the $125 million that had previously been reported as the purchase price.

Katz sat on the dais with Comcast president Brian Roberts, Comcast chairman Ralph Roberts, Snider and fitness entrepreneur Pat Croce, who will become the 76ers' president.

Katz was visibly pained throughout, especially when the hyper-energetic, perpetually upbeat Croce let out a celebratory yell at the microphone and promised to make the 76ers a "world-class organization."

"We're all having fun today," Katz said when it was his turn to speak. "Hopefully, I'll have fun the next week or two, but right now it's a very sad day for me."

Katz, whose team has become one of the worst in the league after a series of disastrous trades and draft choices, said he was persuaded to sell after a long series of conversations with Croce - which began with a lunch on Nov. 8.

"I finally decided after Pat must have called me 50 times and said, 'Are you ready? Are you ready? Are you ready?' " Katz said.

He added: "No, I wasn't ready, and I'm not even ready today."

Katz said he did not make up his mind definitively until yesterday morning.

Croce, who a source said contributed less than $5 million for a part ownership in Comcast-Spectacor, set the deal in motion.

The person credited with bringing all the parties together was Rubin, who as the developer of the Bellevue hotel and retail complex - as well as the burned-out Meridian building - is a force in Center City real estate.

Croce credited Rubin with introducing him to Ralph Roberts, who saw enormous possibilities in the deal - not just in owning the sports franchises and the arenas, but in the potential for programming and for cross-promotions between the teams and Comcast's cable and cellular-phone businesses.

Comcast executives said they were not looking to limit the teams' televised games to premium or pay-per-view channels.

For instance, a Comcast executive said, the company could offer free Flyers or 76ers tickets to people who rack up enough cellular-phone usage, sell cellular phones at the games, or tie the teams into its majority-owned home-shopping network, QVC.

"QVC has always been interested in trying to develop some form of regional home shopping," the Comcast executive said. "What better way of putting a foundation together . . . than to have ownership of the teams?"

He said QVC could market sports memorabilia or use its telephone-ordering system to sell tickets to games and shows at the arenas.

"There's all sorts of things," he said. "We've only just brainstormed about it at this point."

"We want to make more entertainment available for the people of the community," Ralph Roberts said. "This looks like a perfect fit."

Ralph and Brian Roberts said they would have nothing to do with the day-to-day operations of the teams or the arenas. Part of the allure of the deal, they said, was that Snider, with his expertise in team and arena management, was staying.

Snider, who will effectively be Croce's boss, said he would not make basketball decisions.

Croce's expertise is in promotion and marketing. He said that at the end of the season, he would evaluate the organization and make a determination on whether 76ers coach and general manager John Lucus should be retained or if he would seek a new head basketball man.

Brian Roberts spoke yesterday of Croce, who had long sought to head a franchise, and everyone else involved in the deal, as getting what was wanted.

"Once Harold made the decision he wanted to sell, that works for him," Roberts said. "Pat always wanted to do what he's going to do. And Ed's obviously here to run the whole show."

As for Comcast, he said the company heads into the still uncharted world of new technology with two blue-chip programming items, the Flyers and 76ers.

The Phillies and Eagles weren't mentioned at yesterday's news conference, but the issue of a new stadium for one or both - as well as for the Pirates and Steelers in Pittsburgh - will have to be addressed in the coming months.

Gov. Ridge has emphasized that the state will only participate in "partnerships" with team owners who contribute significant capital to a new stadium, so private funding of the sort Comcast-Spectacor might be able to provide is a necessity.

Involvement with Comcast-Spectacor "would certainly strengthen the capacity of the Philllies to bring money to the table for a new stadium," said Sam Katz, a Philadelphia financial consultant who specializes in the financing of sports facilities.

Rubin denied that there was anything in the works involving Comcast and a new stadium for the Phillies.

"That's not part of this transaction at all," he said. "There's been a lot of discussion with regard to [a new] stadium, but that's not really part of this. I don't think Comcast is involved in a new stadium at the present time."