Maybe it was a stroke of luck. Or maybe it is one of the most clever moves ever by an NBA team owner. Either way, Minnesota Timberwolves owner Glen Taylor just got something every owner loves—a huge chunk of cash while keeping control of his team after it was announced today that the group headed by Marc Lore and Alex Rodriguez will no longer be buying the team because they failed to come up with the money by the agreed upon deadline.
The plan was for the Lore and Rodriguez group to buy the Timberwolves and the WNBA’s Minnesota Lynx in three parts over four years with a weighted average price of $1.6 billion, including about $100 million of seller financing. In July 2021, the group purchased 20%. In March 2023 they acquired another 20%. The Lore-Rodriguez group then had until December 2023 to buy another 40%, giving them control of the team. The final 20% would be acquired at the end of 2025.
The Timberwolves—the NBA’s 29th most valuable team, out of 30, according to Forbes—have a little over $200 million of debt, so the 40% purchased by the Lore-Rodriguez group paid Taylor about $500 million of cash.
How much of that $500 million did Taylor get? Apparently all, or just about all of it. In addition to Lore and Rodriguez, the most recent Timberwolves media guide lists the following limited partners: R. Wynn Kearney, Jr., Meyer Orbach, William J. Popp, Terri, Popp, Phil Saunders Family, Joyce Sexton and William Sexton.
Forbes got its hands on the Timberwolves cap table prior to the first sale to Lore and Rodriguez. Contrasting the media guide list of limited partners with the Timberwolves cap table, only two LPs are not listing in the guide that were part listed in the cap table—John Bollero, Jr (0.6% stake) and Let Me Sleep On It LP (1.5% stake). Thus, even if Bollero and Let Me Sleep On It LP were part of the sale to Lore and Rodrigues, Taylor (who owned just over 73% prior to the first sale of 20%) pocketed virtually all of the $500 million because the two limited partners had such small stakes.
Meanwhile, for their $500 million the Lore-Rodriguez group are now limited partners who paid a control price but get no say in how the team is run.
Bankers tell Forbes that at the same time Lore and Rodriguez were looking to buy the team a few years ago, Taylor had at least two bonafide offers of at least $1.5 billion from buyers who could write the check. These bankers say they were baffled at the time as to why Taylor would opt for a multi-year sale to the Lore-Rodriguez group that seemed to have trouble raising the money to buy the team rather than sell to wealthier buyers with abundant capital.
The final blow came last week, when the NBA rejected a deal in which Lore and Rodriguez would bring in private equity firm Carlyle Group as an investor.
Should Taylor, who is 82, change his mind and sell the Timberwolves, he would get at least $2.4 billion. Perhaps today we learned why he chose to play ball with Marc Lore and Alex Rodriquez.
MORE FROM FORBES
