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Alex Rodriguez Close to Buying Timberwolves

April 13, 2021
A Rod to buy Timberwolves

The partnership between future baseball Hall of Famer Alex Rodriguez and billionaire investor Marc Lore is finally close to purchasing the professional sports team they’ve long coveted. Last year, the two business partners attempted to purchase the New York Mets but were ultimately outbid by hedge fund manager Steve Cohen. Now they are reportedly in the final stages of securing ownership of the NBA’s Minnesota Timberwolves.

The deal is another in recent years of sports stars going beyond the sport they played to become owners or part-owners of a professional team. Chiefs quarterback Patrick Mahomes has partial ownership of the Kansas City Royals, and Lakers star LeBron James became a part-owner of the Boston Red Sox last month.

Ownership Transition to Take Two Years
In an unorthodox transfer of ownership, the deal being struck between Rodriguez and Lore and current owner Glen Taylor is that Taylor will actually stay on as majority owner for the next two years to help “ease the transition.” The Rodriguez/Lore group will act as limited partners first, then take over fully in 2023.

For a change in ownership in professional sports, this is highly unusual.

“I love teaching people […] I think it would be helpful to the club, and I think I could be helpful to them so that they feel confident once they take over 100%,” said Taylor.

Taylor bought the team in 1994 for $88 million, and the sale in 2021 is expected to be for $1.5 billion. So Taylor can certainly teach them about maximizing an evaluation and making a tidy profit. As for what he can teach them about running a winning basketball team, that’s unclear.

Rodriguez will not be the majority owner, a fact supported by the fact that his net worth is somewhere around $350M. He will own a big chunk of the team however.

Minnesota is abysmal this season, has only been in the playoffs once in the last 17 years, and is in an unnecessary fight with its biggest star of all time, Kevin Garnett. Point in case, the Timberwolves are tied with the worst odds in the league for winning the 2021 Championship at +250000 (not a typo).

Exclusive Negotiating Window
No deal is final, but the two sides have agreed to an exclusive negotiating window that allows for 30 days to finalize the sale. Usually, this is a formality, but in the case of Taylor and the Timberwolves, this has happened before, and no sale was finalized.

Most recently, Taylor entered into an exclusive negotiating agreement with Ryan Smith, who ultimately ended up saying no to Minnesota before he purchased the Utah Jazz.

The language of this deal includes the Minnesota Lynx of the WNBA in the purchase and specifically talks about keeping both teams in Minnesota, which might be a sticking point in negotiations or something Rodriguez and Lore work around in the coming years. Rodriguez has obvious ties to Seattle after starting his playing career playing for the Mariners, and that city has been seeking the return of the NBA since the SuperSonics left in 2008 for Oklahoma City.

Just in the last decade, the average appreciation of a franchise in the NFL, NBA, MLB, NHL, and English Premier League has grown by more than 500%. With increased TV and streaming revenue and the expansion of partnerships between teams and sports betting providers, the value of franchises is only going up.