Southern California millionaire Alex Meruelo announced Friday that he has ended his bid to purchase the Atlanta Hawks.
During the summer Meruelo had reached a reported $300-million agreement to buy a majority stake in the team and its Philips Arena. Reports first surfaced last month that the deal might be in jeopardy.
"Although all parties negotiated in good faith, we were not able to reach a mutually satisfactory agreement on some key issues given the current uncertainty surrounding the [NBA] labor issue," Meruelo said in a statement. "As a result we mutually decided to terminate the deal effective immediately."
Negotiations fell through during the NBA approval process. Sources close to the situation, but not authorized to speak publicly about it, offered two reasons.
The league worried that the deal was too highly leveraged, they said. Also, NBA officials asked for additional financial considerations not included in the original agreement.
"The Atlanta Hawks are no longer for sale," said Bruce Levenson, part of the current Atlanta ownership group. "We're excited to remain as owners of the Hawks and are committed to building on our string of four straight playoff appearances."
Levenson and Meruelo declined to comment further, citing a confidentiality agreement.
Sports business experts had speculated that Meruelo, who would have become the first Latino owner of an NBA team, was seeking a bargain. Though successful on the court, the Hawks have suffered from low attendance and sagging revenues. The NBA lockout might have helped lower the asking price too.
The son of Cuban immigrants, Meruelo started as a teenage entrepreneur running a downtown Los Angeles tuxedo rental. He subsequently built a business empire with his La Pizza Loca restaurant chain and numerous real estate holdings.
This was the third time he had sought to purchase a team, with one of those deals coming within hours of completion before it fell apart. "I was crushed," he told the Los Angeles Times in August.
In this instance, his official statement sounded a more optimistic note.
"I have great respect for the owners of the Hawks and the league and remain committed to fulfilling my dream of owning an NBA team," he said. "I look forward to that opportunity in the future."
Staff writer Mike Bresnahan contributed to this report.