The prolonged battle for the Minnesota Timberwolves is almost over

Not since LeBron picked up the Miami Heat hat has the NBA been paying this much attention to a decision.

A three-person arbitration panel issued its final ruling this week regarding the ownership battle for the NBA’s Minnesota Timberwolves and WNBA’s Minnesota Lynx, nearly bringing to a conclusion a four-year saga that’s been called the longest sports team sale in modern history.

The twists and turns

In 2021, current owner Glen Taylor agreed to sell both the Timberwolves and Lynx to Marc Lore and Alex Rodriguez (yes, that A-Rod) for ~$1.5 billion. The legal issue stems from the structure of the transaction: the parties agreed payments for the team would be carried out in four tranches – 20%, 20%, 40%, then 20% – over four separate years.

Taylor claims Lore and A-Rod failed to make the third payment (the one giving them majority ownership) in a timely fashion. Lore and A-Rod claim Taylor had no right to terminate the deal, since they still contractually had a 90-day window in which to send the funds.

• The pair owe ~$942 million for the final two payments; that money was put into an escrow account held by JPMorgan last October.
• This was done in part to allay financing concerns – basically, Taylor didn’t think they had the cash. Lore and A-Rod were consistently raising capital throughout the first few years, and lost a critical private equity backer last March before Taylor called the deal off.

But in came the cavalry: The purchasing group now includes heavy-hitters such as former Google CEO Eric Schmidt (net worth: ~$25 billion per Forbes) and Mike Bloomberg (~$105 billion), who could both gamble away the team’s entire purchase price and then casually return to a caviar lunch.

The arbitration decision went 2-1 in favor of Lore and A-Rod, effectively resetting the clock back to early 2024, when Taylor terminated the transaction. This means the pair have been granted a 90-day window to wire through the money.

It’s not a great deal for Taylor. The Timberwolves are currently valued at ~$3.1 billion – or more than double the agreed-upon purchase price. The sale made a little more sense in 2021, however, when Covid was negatively impacting franchise revenues.

But since, the market has spoken. Three teams have been sold or sold a majority stake in the last four years; each – the Suns, Mavs, and Hornets – fetched $3+ billion.

Looking ahead…Even though the ruling went in Lore and A-Rod’s favor, their ownership bid still needs to be approved by 23 of 30 NBA owners before it becomes official (Taylor: “So you’re saying there’s a chance…”).