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A-Rod and Lore Timberwolves Deal Deadline Set in Two Weeks – Sportico.com

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Alex Rodriguez W Mark Lor They’ve spent most of the past six months raising money to fund their purchases of the Minnesota Timberwolves, with a crucial deadline in nine days, according to several people familiar with the situation.

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The group has until December 31 to exercise the option to buy a further 20% of the team from current owner Glenn Taylor, the first of three pre-priced call options in a unique deal approved by… NBA last july. Rodriguez and Lore have talked with private equity firms, family offices and individual investors about accessing at a price higher than the $1.5 billion valuation they negotiated last year, said the people, who were granted anonymity because the details are private. People said some of these conversations happened as recently as this month.

It’s not clear how long the group has secured the funds, or whether it intends to continue with the acquisition. Representatives for Rodriguez, Lorre and the National Basketball Association declined to comment. A representative for the Timberwolves did not respond to a request for comment.

Lore and Rodriguez’s first installment last year bought 20% of the Timberwolves and Minnesota Lynx of the WNBA at that $1.5 billion figure. People said that the call option on the next 20%, which must be exercised by December 31st, comes at a slightly higher valuation. If the group exercises, it has 60 to 90 days to close that payment.

The third option, a 40% interest that would give the spouse a majority of the franchise, must be exercised before the end of 2023. The final 20% interest option must be exercised before December 31, 2024.

The initial deal surprised many in the NBA when it was announced – a combination of its unique structure and valuation that was lower than many expected. Athlete The team is currently valued at $1.7 billion, which is the third lowest in the NBA. The price looks better yet $4 billion Valuation in recent Phoenix Suns deal for Matt Ishpia.

Although there were small escalators in the deal — 4%, according to a source — the two investors clearly saw an opportunity to improve the economy over the course of the payments. Lower and Rodriguez discussed significantly higher valuations in their conversations with investors, according to people familiar with those conversations, including numbers above $2 billion.

While this is unorthodox, it’s not unheard of. David Blitzer, owner of Real Salt Lake, is currently sitting on $2 million Buying option in NWSL – huge discount to market price — and funds are currently being raised for the parent company of both football teams.

The Timberwolves deal also turned heads due to the uncertainty surrounding the money. Lorre has a proven track record as an entrepreneur, including selling his Jet.com site to Wal-Mart for 3.3 billion dollars, although it is unclear if he is a billionaire. Rodriguez has earned $455 million in salary in his MLB career, according to crook.

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Under the original agreement, Purple Buyers Holdings LLC, controlled by Lore and Rodriguez, initially purchased 20% of the Timberwolves and Lynx in mid-2021. That gave the group a series of three more call options to continue buying shares, which, if fully executed, would You will give them 100% of the club. Taylor is the controlling owner, but the team has LPs, who are also involved in the deal.

The first option, which must be exercised by the end of December, is for limited partner shares owned by Taylor. The second option, 40% due by the end of 2023, includes general partnership interests and all non-Taylor LP interests. The final 20%, due by the end of 2024, is all equity from Taylor.

Lor and Rodriguez could choose not to exercise either option, but if they did, the other would be terminated immediately. If they refuse to implement Option 1 by the end of this month, they will simply become 20% minority owners on a team still controlled by Taylor.

Rodriguez and Lore have already begun shaping the futures of both franchises, as they approved the hiring of Timberwolves general manager Tim Connelly in May and a new multi-year contract extension for longtime Lynx head coach and basketball operations chief Cheryl Reeve. While the two have joined the board of directors for both teams, with more input than typical limited partners, Taylor remains in complete control.

Details about this control were part of a lawsuit filed shortly after the initial agreement. Meyer Auerbach, the Timberwolves and Lynx’s largest outsider, sued Taylor last year to get paid immediately for his 17% stake, which was valued at $300 million. Auerbach argued that Lower and Rodriguez entered into a control sale the previous summer and he had the right to sell his minority interest. Later, a US District Court judge Case dismissed in favor of Taylor, albeit on the grounds that Lower and Rodriguez had not yet completed the necessary transactions and obtained university approval to actually proceed with the sale under control.

And according to New York Post, and seems to have become the controlling man behind the group despite advertising them as equal partners. After the first batch, the Mail Reportedly, Lor owns 13% of the Timberwolves, while Rodriguez owns 7%. It’s unclear if the Wonder Group boss will cover the former New York Yankees star going forward.

All this uncertainty speaks to the overall risk of controlling property purchases. The NBA is not the only major American league to have agreed to such arrangements. A majority stake in the NHL’s Nashville Predators was recently sold to former Tennessee governor Bill Haslem in a similar fashion. His share would also be paid out over three periods, with stairs larger than the Timberwolves deal. Predators are evaluated in 775 million dollars Initial valuation, $900+ million valuation for final installment in 2025.

Taylor, now 81, paid the Timberwolves nearly $90 million in 1994 and has previously made other offers for the team. In 2020, the Memphis Grizzlies investor was Daniel E. Straus It said In advanced talks to buy the team, they fell apart. When Taylor was negotiating with Lorre and Rodriguez, there was a separate cash offer with a similar price of $1.5 billion, according to a person familiar with the offer.

Taylor has long been adamant that the Timberwolves remain in the Twin Cities market, and at some point, the team’s ownership will have to assess the long-term value of its current home. The Target Center, built in 1990, is the second-oldest arena in the NBA, although the city-owned venue completed a $145 million renovation in 2017. The Timberwolves’ lease expires in 2035.

If the Rodriguez-Lure deal fails to move forward, Taylor could theoretically hit the market again, looking for buyers. After the Suns deal this week, he may be able to fetch an even higher price.

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