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9.09.2009

Gastclown Buys the Celtics

July 1983

Last spring, Harry Mangurian vowed to sell the Boston Celtics. Last night,the i's were dotted and the t's crossed to make a group of investors headed by Donald F. Gaston new owners of the team. "We've signed a contract for the sale of the team," announced Celtics' vicepresident in charge of finance Stephen Mehallis.

Mangurian, reached at his home in Florida, was pleased that the sale was complete. "I thought we had the team sold two to three weeks ago," he said. "I think we've sold the team to very solid, responsible people." In parting with the Celtics, "I feel bad," said Mangurian. "But it probably won't really hit me until later on, when the NBA approves the sale."

He said he expected "no problems" getting approval from the board of governors and the required three-fourths of the owners. Mangurian, who became part owner of the Celtics in 1978 and sole owner a year later, listed three reasons for approving the Gaston bid over many others he had received.

"For one, one of the major investors (Paul DuPee) is from Boston. For another, the group not only had money to buy the team, but has plenty of financial backing." The third reason, said Mangurian, and just as important as the first two, was that Celtics president Red Auerbach put his seal of approval on the deal. "Red has talked with all the principals," said Mangurian. "And he said he thought they looked like the people who should lead the Boston Celtics.

Gaston could not be reached for immediate comment. Terms of the sale were not released, but the offer had been reported in the $15 million-to-$18 million range. The sale, which will be officially announced at a press conference this morning, came after a lengthy meeting yesterday afternoon between Mangurian, Celtics officials and the prospective buyers at Mangurian's Fort Lauderdale, Fla. offices.

Gaston, a former Gulf & Western executive who resigned in the wake of a Securities and Exchange Commission investigation, had met with Mangurian most of the day Monday. But at the time, it had not appeared that an immediate deal would be struck. According to Mehallis, yesterday's meeting was not to negotiate, but "to more or less go over the mechanical things in the contract. But "once the parties agreed to terms, it was just putting it into writing," he said.

Gaston is from Greenwich, Conn. His partners include DuPee, who along with Gaston is a principal shareholder in Providence Capitol Insurance, and Alan N. Cohen, an executive with the New Jersey Nets. Mangurian will now work on getting the NBA board of governors together to approve the sale. Despite the SEC investigation, all parties were confident that there would be no opposition. "Feelings are very positive. We don't think there will be any prob-lems," Mehallis added, pointing out Cohen's current affiliation with the Nets.

Earlier in the day, State Sen. Royal Bolling Sr. (D-Boston) had sent a telegram to Mangurian, asking him to hold off selling the Celtics until Bolling and his family could put together a nationwide coalition of minority businessmen and entertainers to buy the team. Among those Bolling hoped to line up were world middleweight champion Marvin Hagler, former titlists Muhammad Ali and Ray Leonard, singer Diana Ross and Motown record magnate Berry Gordy. Mehallis said that Mangurian received a "rather vague" telegram from Bolling yesterday, but the offer had no effect on the sale.

The sale also ends the attempt of local businessman Steven Belkin to buy the Celtics. Belkin, head of Trans National Travel, withdrew his offer to buy the club following stories detailing his business involvement with convicted bookmakers Edward and Henry Lewis. Belkin later resubmitted a bid when an NBA investigation cleared him of any wrongdoing. But by that time Mangurian was working on the new package.Gaston resigned from Gulf & Western in July 1982, less than a year after the settlement of an SEC suit that alleged he had improperly spent company funds.

He was the target of a 1979 suit against Gulf & Western that accused him and the late Charles G. Bludhorn, then chairman of the board, of "fraudulent courses of conduct." The two executives were accused of using corporate airplanes and limousines for purposes unrelated to business, and of obtaining personal bank loans from institutions that hoped to do business with Gulf & Western. The company settled with the SEC on Oct. 28, 1981, agreeing to institute specific accounting procedures that would prevent future misuse of corporate funds.

Gaston, 49, had earlier maintained that he was "not at all worried" about how the suit would damage his chances to buy the team. DuPee is an officer of Richfield Holdings. Cohen is chairman of the board of the Nets and will presumably divest himself of any holdings in the team. Cohen was formerly chief executive officer of Madison Square Garden Corp., a subsidiary of Gulf & Western, which owns the New York Knicks.

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