The Timberwolves Are (Finally) Approaching A $1.5 Billion Sale

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Friends,

After striking out on a deal to acquire the New York Mets last year, ultimately losing on a $2.4B bid from hedge fund titan Steve Cohen, Alex Rodriguez and Marc Lore have found their next target — the NBA’s Minnesota Timberwolves.

News broke this weekend that the 14x MLB All-Star and billionaire eCommerce mogul have teamed up, signing an exclusive letter of intent with Timberwolves owner Glen Taylor.

Here are the details:

• The two parties will have 30 days to finalize an agreement.

• The deal includes the purchase of the WNBA’s Minnesota Lynx.

• They’ve agreed upon a purchase price in the “$1.5 billion range” but will use the 30-days to iron out the remaining details.

• The agreement states that both the Timberwolves and Lynx will remain in Minnesota for the foreseeable future.

One interesting caveat?

Alex Rodriguez and Marc Lore will pay $1.5 billion but won’t gain control of the team until 2023, as Glen Taylor has stipulated that he would like to “ease the transition” by making new ownership serve as limited partners first.

No, that’s not normal.

After purchasing the Minnesota Timberwolves in 1994 for $88 million, saving the franchise from relocating to New Orleans, Glen Taylor has flirted with selling the team for almost a decade.

Financially, the investment has done extremely well.

A 428% valuation increase over the last decade is obviously great, not to mention all the incredible perks and cash that the business produced. Still, for Glen Taylor, this time was always coming.

Taylor is nearing his 80th birthday and has no one in his family planning to take over the team, causing him to spend most of the last decade searching for a new ownership group.

The only problem?

Glen Taylor has entered into exclusive negotiating agreements with multiple groups in the past, ultimately always deciding that he was not yet ready to sell the team — causing some people to believe he never really wanted to sell in the first place.

Simply put, this isn’t a done deal yet.

As for Alex Rodriguez and Marc Lore, the two have been business partners for years and, in turn, have also become close friends.

Since retiring in 2016, Alex Rodriguez has maintained his polarizing personality. He is a mainstay on ESPN MLB broadcasts and has established himself as a qualified and successful investor in his own right. Some people love him, while others still hate him.

Marc Lore keeps a much lower public profile but has quietly established himself as one of the best entrepreneurs of our generation.

Here are a couple of his business ventures:

• Sold Thepit.com to Topps for $5.7M in 2001.

• Sold Diapers.com to Amazon for $545M in 2011.

• Sold Jet.com to Walmart for $3.3B in 2016.

After spending the last 5-years running Walmart’s eCommerce division following his $3.3 billion sale of Jet.com in 2016, Lore stepped down in January — making his desire to own a professional sports team very clear.

Lore told the WSJ, “I’m going to probably buy a sports team.”

Now, he’s trying to make that dream a reality.

You’ve probably heard me say it before, and I’ll most definitely say it again in the future — professional sports franchises have consistently proven to be premium, scarce assets with a strong record of value appreciation.

Not only has the average franchise across the NFL, NBA, MLB, NHL, and Premier League appreciated over 500% in value during the last decade, but variables like expanded sports betting and increasing media rights have only added to the allure of professional sports ownership.

That makes Alex Rodriguez and Marc Lore’s ownership interest a no-brainer.

The real question?

If Rodriguez and Lore will find a way to sidestep certain stipulations of the agreement and eventually move the team out of Minneapolis.

Ultimately, only time will tell on that.

Have a great day, and we’ll talk tomorrow.

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