NBA_s Cleveland Cavaliers Purchased By Real Estate
NBA's Cleveland Cavaliers Purchased By Real Estate Mortgage Magnate
It was recently announced that the Cleveland Cavaliers, a franchise of the National Basketball Association (NBA), has been purchased by Dan Gilbert, founder of online mortgage company Quicken Loans. Gilbert acquired the team from Gordon Gund for $375-million, after weeks of speculation that Gund was on the verge of selling the highly popular team.
Gund, who along with his brother George had originally purchased the basketball team from Ted Stepien in 1983 for $20 million. For the better part of the last decade, the Cavaliers was one of the least appealing teams in the NBA. They consistently finished at, or near, the bottom of the NBA standings and still continue to suffer from a playoff drought. The Cavalier's fortune changed last year with the arrival of Lebron James, who was drafted first overall by the team in the 2003 NBA Draft. James, who became a househould name playing high school basketball, is widely touted to become the next superstar of basketball, with many proclaiming that he'll reach the status that Michael Jordan once did. James has already become the most popular and marketable player in the league, as Cavalier's attendance have significantly improved. He has also restored repectibility and credibility to the franchise as the Cavaliers expect to make the playoffs this season. Without Lebron James, Gund would not have made the gigantic profit he did with this sale.
Gilbert's purchase of the Cavaliers still awaits approval from the NBA's Board of Governors. There has been recent controversy over whether the deal will be approved with the news that Gilbert had been arrested in 1981 that has surfaced. Gilbert, who was a college student at Michigan State University at that time, was arrested along with several friends for running a gambling ring, mainly involving other students betting on football games. Gilbert was fined and ordered to complete 100 hours of community service for the 1981 arrest. As a condition of the sentencing , Gilbert has no permanent criminal record since he completed the terms of his sentence. Despite this, Gilbert remains confident that his past will not affect the acquisition of the NBA team.
Following college, Gilbert went on to attain a law degree from Wayne State University. As a first year law student, Gilbert founded and served as CEO of Rock Financial Corporation in 1985. Originally a brick and mortor lender, the company launched Rockloans.com, which became one of the fastest growing mortgage lenders in the country. Rockloans.com was renamed Quicken Loans, which is now the leading the provider of direct-to-consumer home loans, offering mortgages all over the nation through its website www.QuickenLoans.com. The company consists of online lender Quicken Loans, Rock Financial and Title Source, and closed more than $12 billion in mortgage loans in calendar year 2003.
For Gilbert to become the official owner of the Cavaliers, the deal needs to be approved by three-quarters of the 30 NBA owners. Tim Frank, vice president of basketball communications for the NBA, said the league is processing the contract between Gilbert and Gund but did not reveal what that entails. If approved, a group of investors headed by Gilbert will assume ownership of the team and control operations of the 20,000-seat Gund Arena in Cleveland.