September 27, 1997
The Boston Celtics Limited Partnership - despite the second worst record in the National Basketball Association - managed to turn a profit of $ 420,000 in the fiscal year ended June 30, according to documents filed yesterday with the Securities and Exchange Commission.
That's down from $ 54.2 million net income in fiscal 1996, but that year the partnership picked up an extra $ 105 million by selling Channel 25 to Fox Television Stations Inc. It wasn't so lucky this year; the partnership had to rely on ticket sales and promotional revenues.
In fiscal 1997, Celtics revenues fell to just under $ 63 million, compared to $ 64.8 million in 1996.
Results for the year were dragged down by the financial burdens of the team's rebuilding program.
For coaching the Boston Celtics to 15 wins in the 1996-97 season, and stepping aside gracefully for new coach Rick Pitino, M.L. Carr took home $ 2 million in salary and bonus. Pitino received $ 750,000 in salary and a deferred bonus of $ 600,000.
The big money starts rolling in for Pitino this year, when he will earn $ 6.75 million a year for the next six years, and $ 2 million a year for four years after that.
Meanwhile, the team paid $ 4.5 million to buy out the contract of power forward Dino Radja, and another $ 4 million on salaries and bonuses for new staff, and severance expenses for people let go during the restructuring.
Richard Pond, the Celtics' chief financial officer, predicted that the Pitino era will lead to increasing ticket sales and more successful promotional tie-ins. Pond noted that when tickets for the upcoming Celtics season went on sale, over 1,000 fans lined up on the first day. By hiring Pitino and revamping the lineup "what we have effectively done is change the image of the team," Pond said.
Another revenue boost could result from a new promotional deal with a Boston-area bank. Dissatisfied with its deal with Fleet Financial Group, the Celtics are discussing a link with Citizens Financial Group.
Fleet reportedly has balked at the Celtics request that the bank spend $ 6 million over the next five years on Celtics-related marketing efforts. But Citizens may be willing to pay the price.
Boston Celtics Limited Partnership shares fell 1/4 yesterday to 25 1/4 on the New York Stock Exchange.