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The NBA has the right to buy back the Milwaukee Bucks from incoming owners Wesley Edens and Mark Lasry if a deal to a bring a new arena to the city is not in place by November 2017, according to sources briefed on the situation.
Sources told ESPN.com that the sale agreement announced last week to transfer the Bucks from longtime owner Herb Kohl to Edens and Lasry for a purchase price of $550 million includes a provision that allows the league to buy back the team for $575 million if construction on a new building in Milwaukee is not underway by the deadline.
Although one source said Monday that the league would likely only take that step if it didn't see "significant progress" toward a new arena in Milwaukee by then, this provision ensures that the NBA would control the fate of the franchise from that point as opposed to Edens and Lasry.
Kohl, who served as Wisconsin's longtime U.S. Senator and has deep ties to the region, made it a condition of the sale that anyone buying the team had to keep it in Milwaukee. But new NBA commissioner Adam Silver, even before formally succeeding David Stern, said coming into this season that the league was prepared to insist that Milwaukee had to have a modern arena by 2017 to keep the franchise where it's been since its inception in 1968.
"Senator Kohl put in place provisions to ensure that the team stays in Milwaukee," Silver acknowledged last week after the league's annual Board of Governors meetings.
Edens and Lasry agreed last week to pay a league-record $550 million to Kohl for the Bucks and promised to contribute an additional $100 million toward a new arena. Kohl also pledged to gift $100 million toward construction of a new facility, but more financing will be needed to get the project going, with city officials in Milwaukee estimating that a new arena would cost in excess of $400 million.
The inclusion of this clause in the sale agreement, furthermore, is an unspoken admission that neither the league nor the new owners are convinced that construction on a modern building in Milwaukee will be underway in the space of three-plus years.
Two local task forces have been assembled to study the issue, but there has already been pushback to potential public financing by politicians and community groups. The Bucks' lease with the antiquated Bradley Center runs through the 2016-17 season, which establishes the fall of 2017 as a natural deadline to find a solution.
The NBA, in 2010, bought the New Orleans Hornets from owner-in-distress George Shinn and operated the franchise for 18 months until new ownership willing to keep the team in Louisiana could be found and a publicly financed renovation for New Orleans Arena could be finalized.
Kohl indicated last week that Edens and Lasry, who are hedge-fund billionaires based in New York, planned to secure operating rights for the new arena in return for their $100 million investment.
Silver, meanwhile, said last Friday that he believes the process of vetting and approving Edens and Lasry as the Bucks' new owners could be completed in a month's time.