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Boardroom Q&A: Celtics Co-owner Stephen Pagliuca

Steve Pagliuca is a man with a lot on his plate, but his dedication to the Boston Celtics since purchasing the franchise in 2003 has never wavered.

The 67-year-old is not only the co-chairman of private equity giant Bain Capital, but also jointly purchased the Boston Celtics with Wyc Grousbeck in 2003 for $360 million. After 19 years — including a famous championship in 2008 — the franchise is worth more than $3 billion today.

Pagliuca also agreed to purchase 55% of Italian Serie A soccer club Atalanta in February, and is reportedly part of the group of finalists to purchase iconic English club Chelsea FC from sanctioned Russian oligarch Roman Abramovich. But since the Atalanta sale won’t officially be closed until mid-April, Pagliuca couldn’t comment on the subject when speaking with Boardroom in mid-March.

It was a few days after Kevin Garnett’s jersey retirement ceremony in Boston. After a 21-22 start, the Celtics had won 20 of their next 26 games, right before a 110-95 win over Golden State to move to 42-28 on the season — squarely in championship contention. As of this writing, they’re 48-30 and No. 3 in the East, two games back of first place.

Pagliuca went deep on the team’s recent success, the managerial transition from Danny Ainge to Brad Stevens last summer, and what he’s most proud of as he approaches two decades of team ownership.

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SHLOMO SPRUNG: This started as a transitional year in a sense for the team. How did you feel at the time, when you had an entrenched structure for a long time?

STEVE PAGLIUCA: I felt like we had improved the team. Brad had improved the team over the summer. And the funny thing was, our statistics guys would say in the first 40-something games when we were about .500, we as a team were shooting at a much lower percentage than what our historical averages had been. If you brought our 3-point percentage up to anywhere near historical averages, we would’ve won another 10 games out of those. We’d have been one of the top two or three teams in the East. So that gave me some confidence that we actually had a really good team because eventually, everything comes back to the mean and those shots would fall. And since then, we’ve shot really close to the collective average for 3-point shooting.

I think the key was not to overreact. And then secondly, I think Brad made really good moves in getting [Daniel] Theis back and getting Derrick White from San Antonio because he’s a perfect complement to our team passing and he’s an all-around player.

When the shots started to fall, the ball movement started to happen more, and everybody trusted everybody. And so now we’re in a really good place where the team’s moving the ball, we’re making shots, the defense has been the best in the NBA by a good margin. So I think we’re really hitting our stride now.

SS: And a lot of that has to do with head coach Ime Udoka, whom Stevens hired.

SP: Yeah. Ime’s a huge part of it. I talked to Brad and Ime, saying they’re very humble, and I don’t think they realized how incredible this turnaround was from the first 40 games to the next 20 games. It’s all about the hard work, and they made putting his defensive system in and teaching that and getting the players to buy in and just his quiet confidence that now has the players really happy and totally bought in. It’s a really great time to be a Celtic right now.

SS: What was the ownership reaction when Danny Ainge decided to move on?

SP: We were very sad. But he gave us some good notice. I think he started indicating in March [2021] that he wanted to step back, so we were able to make a pretty seamless transition because Brad had been with us in this draft room three straight years, and he knew us. He knew what we were trying to accomplish, which is win a championship.

And for himself personally, he’s got a boy in high school and coaching just takes you away so much. He was missing his son’s games and all those kinds of things. I think from a personal standpoint, and from a basketball standpoint, we went through a pretty seamless transition. And when we did all the interviews, we all agreed that Ime was the No. 1 choice for us, and I’m glad Brad was able to land him.

Brad Stevens moved into the Celtics’ front office last summer (Photo by Andy Lyons/Getty Images)

SS: Not every team would make that transition seamlessly. You said what your reaction was when Stevens said he wanted to go out of coaching, but was it 100% that you guys knew he was the guy to lead basketball operations?

SP: We had a strong feeling— both Wyc and I independently— since Danny told us. We had the same thought that Brad would be a perfect transition. We had developed a rhythm and a system and we have a large stats group and a great team working together that would maximize profitability, [so we felt] that the team should stay together.

And not only did we get Brad, but we still have [assistant general manager and team counsel] Mike Zarren, [director of player personnel] Austin Ainge and [assistant general manager] Dave Lewin, who are critical to the effort. It looks like it was a good move. Brad’s done a phenomenal job so far, and Ime has done a great job. So, we’re really happy with it.

SS: There was talk toward the early part and even midway through the season that maybe the Jayson Tatum-Jaylen Brown partnership wasn’t working. Clearly, that was a little shortsighted.

SP: That wasn’t our analysis. Our analysis was that we were way under our historical 3-point shooting averages. And that sounded like an excuse at the time, but then the shots started to fall and everything came into place.

Part of that is also the defense. It took a while for Ime to get everybody on the same page on the defensive style that we’re playing — a very aggressive physical defense. It all came together after about 40, 42, 43 games. It’s been a great result, and hopefully, it’ll keep on happening. 

There’s also been great development of the players. Grant Williams has become one of the better 3-point shooters in the NBA. That’s incredible. If you remember when he started with us, I think he was like, 0 for his first 25 threes or something like that. And now he’s basically sticking that shot at a 40% clip.

SS: So you and Wyc officially bought the team in 2003. That’s almost 20 years.

SP: It’s gone by quickly. 

SS: The value of the team has increased nearly tenfold since then. What does that say about the way you guys have managed the team, and the way the league has gone?

SP: We called the company that we founded to buy it Banner 17, which was [because] we wanted to bring a 17th banner [to Boston] — now an 18th. And we told our investors the company is Banner 17, not IRR 17. And we were going to run it responsibly and try to win a championship.

They shouldn’t look at it as a profit maximizing investment, but more like a labor of love. But it turned out that Adam Silver’s done a super job with the NBA, and the NBA is one of the few global sports — soccer and basketball. As the television markets have fragmented, the sports properties are the things people wanna watch live. So, there’s been massive increases in television revenues and ticket revenues. The globalization that’s been happening in NBA basketball has been great.

(L-R) Managing Partners Robert Epstein and Stephen Pagliuca celebrate with head coach Doc Rivers of the Boston Celtics after the Celtics defeated the Los Angeles Lakers in Game Six of the 2008 NBA Finals on June 17, 2008 at TD Banknorth Garden in Boston, Massachusetts. (Photo by Jim Rogash/Getty Images)

SS: Aside from the championship, what are the innovations or achievements that you’ve been the most proud of over that period of time?

SP From day one, we knew it was hard to win a championship, but we knew there’s a lot of planning and some luck involved in that. We knew we could do a lot by using the Celtics brand in terms of community building. So we’re very proud of that. We started the Boston Celtics Shamrock Foundation right off the bat, and that’s become one of the world’s leading  sports philanthropic organizations. 

We’ve now done an offshoot called Boston Celtics United for Social Justice, just when the George Floyd situation happened. We said we’ve really got to get involved. So the investor group came together and we’ve committed $25 million over the next 10 years on six social justice pillars. And we’ve had virtually the entire Celtics organization— the coaches, the players, the admin staff, over 100 people plus the investors— sign up to be on these committees to push social justice in areas like healthcare, voting, economic empowerment, and criminal justice system reform. Things that we need to actually push to achieve social justice. So it’s probably a 10-year, maybe a 20- or 30-year program. And we’re very proud of that. 

We’re also proud that we continue the Celtics legacy of civil rights. We helped fund and build the Bill Russell statue that [is] located not at the Garden but outside City Hall, symbolizing his major impact on civil rights.

We’ve had a really stable team and great coaching. We’ve only had two coaches in effectively 20 years with Doc Rivers, who we hired and got us a championship, and Brad, who’s brought us to the Eastern Conference Finals a couple of times and came close to getting to the Finals. And now we’re contending again. We pride ourselves in that stability and having very high integrity and good people in key positions.

SS: It’s crazy how long it took for that Russell statue to be built.

SP: When Bill Russell got the Congressional Medal of Freedom [in 2011], around the following morning, I got a call from [Boston] Mayor [Thomas] Menino saying, “You know,  we have space, and we really think there should be a statue.” I said I agree, and from that call, we had the site and the statue and the statue made, which was very complicated. We accomplished that in probably less than a year.

SS: What are some new-age aspects of the league you’re excited about, whether that’s sports betting, or VR, that you think will be helpful to the future of the league’s growth?

SP: I think the [NBA] Tech Summit really showed that at the core, all the technologies that were showcased are devices that help increase engagement with fans. It’s good for the league, good for the players. The more we can engage the fans and keep them updated on their team, be part of the team — all those things range from NFTs to electronic ticketing, and I think eventually VR. VR’s not huge yet, and I think VR has some issues with wearing those large glasses. When they’re able to shrink those down, or they come up with 3D and they show you things without those glasses on, that could be the next wave.

But at the core of it, it’s all about fan engagement and connectivity between the team and the fans. And these technologies have really turbocharged that in the last five years.

SS: Where are you on sports betting in Massachusetts, and maybe even at your arena at some point?

SP: In general, Adam Silver — and way back to David Stern — recognized pragmatically that there is underground sports betting going [on] anyway. Sports betting is happening, and certainly legalized and regulated in Europe in a big way there. I think both David and Adam recognized it was happening anyway, and it’s much better to happen in a regulated, controlled, fair fashion. And they pushed for that. That’s now happening. It’s going toward the European model. I think we’re accepting of any type of sports betting that’s done the right way. That’s been Adam’s stance on it, and that’s our stance on it, too.

SS: I know Mark Cuban has been giving NFTs to people who attend games down in Dallas. Do you guys have any specific NFT plans like that?

SP: We’re looking at it. Cuban’s interesting. They’re giving an NFT if you get to the game before the end of the first quarter because they have an issue down there of people coming late to the games. And so, it’s tough for the team when the people shuffle in later. We don’t have that problem. People come like an hour early into our games. But again, we’re looking at strategies where the more value you can give fans and things like that, and NFTs are definitely in the mix. We’re trying to figure that out.

SS: Where do you see the Celtics most innovating over the next couple of years?

SP: I think it’ll just be increasing the ability for fans to get data and content online, enhancing the content and the ability to access all things Celtics. That may take the form of NFTs and virtual reality and all those kinds of things. That’s definitely the future. Currently, we’re happy the team’s contending to become a top-four, five team in the East and the league. Good things happen when you’re playing that well.

SS: Is this team blowing away your expectations for this year, or is this something you thought could happen?

SP: It’s something I thought could happen. And I felt like I was making excuses in the first 42 games because I think we only had five games of the first 42 where we had our complete lineup available. And then we had our complete lineup for most of the next 20 games. You feel like you’re making excuses when you’re not playing well, when you’re not seeing wins on the court. The fact that we had so many different lineups, so much COVID and so many injuries in the first 40 games, it definitely hampered the team and definitely hampered the coaching. When you don’t have all your guys, it’s hard to commit to the system. So they got all the guys back for the next 20 games, and it paid big dividends.

It’s also the trades. Daniel Theis knows the system and has been a great fill-in to take pressure off Al [Horford] and [Robert] Williams [who is now out several weeks with a knee injury] at center. That’s maybe been an unsung move that made us better because it keeps our guys fresher. We don’t lose very much with having Theis out there blocking shots and playing the center position, where we didn’t have that before. We just had two people that could play the center position, and now we have three. That’s really been good. 

And now Derrick White gives us the ability to go small. He’s good at every aspect of the game and is great at moving the ball and really making other guys better

SS: Even bringing back Al Horford in the first place and trading Kemba Walker turned out to be a good decision.

SS: Horford’s playing really, really well. Some of the best basketball of his career. It’s incredible to watch. And Marcus Smart — he’s really developed into a very savvy point guard that can take people to the hoop. I think he’s playing the best basketball of his career. All that coming together is great to see. 

SS: It seems like Smart is in trade rumors year-round.

SP: Everybody wants him, and we’re not trying to trade him. Everybody wants Marcus Smart because they want a point guard that can defend four, five positions and is tough and can bring that toughness to the team. So he’s a sought-after player, certainly, by other teams. 

SS: If you had to choose a favorite Celtic in the last 20 years of your ownership — and this is an impossible trap question — who would you choose?

SP: That is a tough question. You gotta say Paul Pierce and Kevin Garnett. Paul was the stalwart when we bought the team, and at the [Garnett jersey retirement] ceremony, we talked about the dinner we had.

Wyc and I met with Paul at Wyc’s house because Paul was thinking that he needed to move on because the Celtics hadn’t won, so we had to convince him we had a program. Danny Ainge was going to come in and upgrade the team, and we’d have a chance to win. And he stuck with us, and we’ll always be appreciative of that. We would never have had a championship without Paul Pierce, and Paul loves to play basketball.

And then Kevin Garnett, he kind of brought back the entire swagger to the Celtics and the defensive, unselfish mentality. So those would be the two guys that really stood out over the past 20 years. There’s many more, but they definitely stood out.

SS: Any favorite Garnett stories?

SP: I have a lot of them. [Laughs] But the best Garnett story. He went back to do that film, Uncut Gems. I asked him, Was it hard going from being a basketball player to being an actor? Because he had a big part in that movie. And he said, “Pags, how difficult can it be to play yourself?” 

And when he was on the team, the thing that stands out is his super intensity. Banging his head against the stanchion before every game, throwing up the chalk. He had a whole bunch of mannerisms and habits that just got everybody pumped up. The “anything is possible” approach to basketball.

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