How Steve Pagliuca Used a Bain Playbook to Create Champions

(Bloomberg) — Few team owners had a better 2024 than Steve Pagliuca. Less than a month after an all-night party celebrating Atalanta BC’s unlikely Europa League championship, the long-time private equity dealmaker was hoisting the NBA trophy as the Boston Celtics won their second title under his group’s ownership. 

“I’m still pinching myself,” Pagliuca says on the latest episode of The Deal with Alex Rodriguez and Jason Kelly. So how did he do it?

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Pagliuca, as part of a group led by Wyc Grousbeck, bought the Celtics in 2002 for $360 million and immediately set about fixing an iconic team that hadn’t won it all since 1986. Both men came from the investment world and knew they had an undervalued asset. Pagliuca, 70, had built his fortune at Bain Capital, the private equity firm created out of the well-known consulting firm. And he had a playbook ready.

“The first thing we did was do kind of a Bain study on what were the key objectives,” Pagliuca says. As good consultants do, they boiled it down to three things: Build a championship team, create a more fan-friendly environment and recognize it as a community asset.

Of course all of that is easier said than done. And it takes time. Pagliuca says the Celtics ownership studied both leagues and teams, discovering that if new owners didn’t win a championship within the first five years, they never did. The Celtics broke their decades-long drought in 2008, right at the end of Pagliuca’s fifth season. “We just got in under the wire,” he says.

The most recent title, 16 years later, shows how difficult winning consistently in the modern NBA can be (though it made the Celtics the winningest franchise in league history). Grousbeck and Pagliuca were at the start of a wave of aggressive owners with Wall Street and corporate training. That sort of background is now more the norm—and has made the league much more competitive. These days the Celtics are up against the likes of the Atlanta Hawks (owned by Ares Capital founder and chairman Tony Ressler), the Phoenix Suns (UWM Holdings Chairman and CEO Mat Ishbia), the Philadelphia 76ers (Apollo Management co-founder Josh Harris and longtime Blackstone executive David Blitzer), and the Los Angeles Clippers (former Microsoft CEO Steve Ballmer).

Ballmer is at the fore of owners investing heavily in facilities and fan experience. His new tech-heavy Intuit Dome in Los Angeles is the envy not just of NBA franchises, but teams across the sporting landscape—and a harbinger, says Pagliuca.

“We are at the start of a revolution where it’s only going to get better and better with technology,” he explains. “That’s going to be an incredible thing, and spur other stadium development.”

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