NBA rumors: Marc Lore and Alex Rodriguez officially close deal to join Timberwolves ownership group

More on Minnesota Timberwolves Sale?
Last month, Alex Rodriguez struck a deal to buy the Minnesota Timberwolves. Now comes the tricky part. The former Yankees slugger’s $1.5 billion agreement to buy the NBA franchise — signed with his business partner, the e-commerce tycoon Marc Lore — could get a bumpy ride this week as one of team’s minority owners has sued to delay the closing of the deal. A court-ordered suspension at a hearing slated for Monday — seen by some insiders as likely — wouldn’t necessarily kill A-Rod’s bid to finally become a professional sports team owner.
Still, some insiders are scratching their heads over the terms of the purchase, which call for A-Rod and Lore taking an initial stake of just 20 percent, plunking down some $300 million with an option to buy the rest of the team within 18 months. That’s well short of the initial cash trove of nearly $2 billion that A-Rod, Lore and a cadre of investors had reportedly amassed for their Mets bid. Indeed, sources close to the situation said that while A-Rod and Lore can make the initial payment, they’re still scrambling to raise the $1.5 billion they need to close the deal, and aren’t yet close to that number.
Taylor bought the Timberwolves and the Lynx in 1994 for $94 million. Since then, sources say the franchise has struggled financially and on the court, losing money most seasons and reaching the playoffs only once during the past 18 years. Some owners, meanwhile, are upset that the Timberwolves, despite commanding one of the league’s major markets, collect roughly $20 million in annual revenue-sharing payments from the more profitable teams, one source close to the NBA said.
Dane Moore: Sources: Glen Taylor has responded to Meyer Orbach's lawsuit claiming the right to liquidate his $300M stake in ownership of the Minnesota Timberwolves Part of Taylor's response is that "there may never be a sale" -- and that Rodriguez and Lore merely have an option to purchase
With Glen Taylor entering into an agreement to sell the teams, eventually, to Marc Lore and Alex Rodriguez, limited partner Meyer Orbach has filed a lawsuit alleging that Taylor is in breach of contract because Orbach has not been provided the opportunity to sell his 17 percent stake in the team before the deal with Rodriguez and Lore is completed. The lawsuit itself does not appear to threaten Taylor’s ability to do his deal with Lore and Rodriguez. But filing it also allowed Orbach to make public terms of the agreement with Rodriguez and Lore, namely that there is no language in the contract that prevents the Timberwolves and Lynx from being moved to another market.
The lawsuit states that Taylor ignored Orbit’s attempt to exercise those rights, while also stating that he has not entered into a “control sale” with Rodriguez and Lore. This is where the unique arrangement that has been brokered comes into play. Lore and Rodriguez, subject to league approval this summer, are coming in to start with roughly $250 million, sources told The Athletic. They will not be majority partners right from the start. The plan is for the pair to purchase shares gradually and work toward a controlling interest in the team by December 2023.
The letter of intent signed by Rodriguez and Lore prior to the beginning of negotiations with Taylor did include a commitment to remain in Minnesota, sources said. But that document is not legally binding, and that language did not transfer to the official agreement, according to Orbach’s lawsuit. That said, sources on all sides of these negotiations have told The Athletic that Lore and Rodriguez are committed to the Twin Cities market and that there have never been any discussions about moving the teams.
There could always be another market beyond Seattle or Las Vegas, if the league does indeed expand to those two cities. But the league would have to approve such a move. Sources with the NBA and in ownership circles continue to tell The Athletic that the league values the Twin Cities market. It has also been reported that any new owner would only have to pay $50 million to break the Target Center lease, which runs through 2035, a relative pittance when compared to the team’s $1.5 billion valuation.
Another source with direct knowledge of the Timberwolves, the league dynamics and the Target Center lease said that several other stipulations would have to be met on top of the $50 million fee to trigger an exit, making it more difficult to break that lease than initially perceived. “Between the lease, the unknown relocation fee (the Board of Governors) would ask for, the general political backlash and the size of the market, the team will stay put,” the source said.
Jon Krawczynski: What I have said from Day 1 on this: the words coming out of the mouths of any owner are not the important thing. The important thing is to look at the landscape of the league. Expansion, the desire by the NBA to be in the Twin Cities are both big factors here. As I have reported from the outset of Taylor's agreement with Lore and Rodriguez, there has been no discussion of relocating the Wolves/Lynx. Does that guarantee anything? No. But multiple bidders have told me it would be very difficult to move the team. We'll just have to see
Jon Krawczynski: It seems that Taylor overstepped by promising that language would be in the agreement guaranteeing the team stays. A mistake he's paying for now. Legal experts have said that would be very difficult to enact. But his larger point on the league's desire to be in MN stands.
The complaint filed by Orbach, a New Jersey real estate mogul who owns more than 17% of the Timberwolves and WNBA Lynx, also includes a significant revelation: Despite Taylor's public statements to the contrary, he has included no provision in the $1.5 billion sales agreement with Lore and Rodriguez that requires the new ownership group to keep the franchise in Minnesota upon taking control of the team, according to an exhibit in the complaint.
But Rodriguez and Lore appear to have succeeded where others have failed. After more than a month of negotiating, they signed documents on Thursday to make the purchase official, sources told The Athletic. The pair of close friends stayed the course even after the exclusivity agreement expired on Monday and got the deal across the finish line. The main parameters initially reported, including the $1.5 billion price tag and a succession plan that has Lore and Rodriguez joining as minority partners before eventually taking over the lead roles to start the 2023-24 season remain unchanged, sources said.
The agreement still has to be ratified by the NBA’s Board of Governors later this summer, but Rodriguez and Lore plan to attend the Hall of Fame induction ceremonies this weekend in Springfield, Mass., as their first public appearance as Wolves owners, sources said. That means it is time to look at some of the pressing questions surrounding the presumed transfer of power.
The former New York Yankees star and Lore, the former e-commerce chief at Walmart, also made headlines Wednesday when they formed their own venture capital firm, Vision/Capital/People, or VCP. VCP is launching with $50 million in funds from the duo. It could reportedly raise an additional $300 million to $500 million. “If you have a big idea, you don’t want to start with a couple hundred grand,” Lore told CNBC.
Together, Rodriguez and Lore have made some notable moves in the last six months: Successfully raised $500 million for their Slam Corp. SPAC, which intends to pursue business in sports, media, entertainment, health and wellness, and tech. Backed an air-taxi company called Archer Aviation. A-Rod joined the $650 million hospitality fund CGI Merchant Group to invest in hotels.
But their 30-day exclusive negotiating window to purchase the team from Glen Taylor ended without a formal deal and the two sides continue to negotiate, ESPN reported Tuesday. Lore told Bloomberg that the talks with Taylor are “ongoing, and going well,” adding that “we’re getting close to the finish line.”
Taylor announced on April 10 he intended to sell the team to Lore and Rodriguez after meetings over the previous week. The purchase price was expected to be around $1.5 billion including debt, sources said, with Lore and Rodriguez becoming limited partners and buying pieces of the team in phases over the next two years and taking full control for the 2023-24 season. The Minnesota Lynx are expected to be included in the transaction.
If they complete the transaction in the coming days, there will still be plenty of people counting Lore out. The Timberwolves are a distressed asset, albeit one that looks a little better lately as D’Angelo Russell and Karl-Anthony Towns have spent extended time on the court together and Anthony Edwards seems poised for stardom. Lore and Rodriguez have no experience in sports ownership, so it is anybody’s guess how this would go. “I have more drive now than I’ve ever had in my life,” Lore said on Vaynerchuk’s podcast. “The fear drives you. If you’re scared to do it, and you do it, you’re going to put in the best you’ve got.”
“He doesn’t put himself in a position to fail,” said Gary Vaynerchuk, the high-profile entrepreneur and social media maven who has been a friend and business partner to Lore. “Now he’s at an interesting part of his career where I think he’s going for bigger bets. Flying cars and sports teams. Now I think he’s probably in his ‘let my stretch myself’ mode.”
Audacious dreams only require sustained belief. And here we find Arron Afflalo, the former guard who had a solid 11-year NBA career, during which he made very good, if not max, money — and who has quickly pivoted to a dream that may seem far-fetched on the surface: putting a group together to buy an NBA team. But the 35-year-old Afflalo has spent much of the last year doing just that, working with multiple significant financial players to try to buy the Minnesota Timberwolves. That bid fell short; though Afflalo did get multiple meetings with Wolves governor Glen Taylor, who entered into a letter of intent last month with a group led by former Walmart CEO Marc Lore and retired baseball superstar Alex Rodriguez, who plan to buy the team for $1.5 billion.
Lore and Rodriguez are in the midst of their 30-day exclusive window to finalize the purchase from Taylor, and there’s nothing to indicate the agreement will fall through before a likely approval by the NBA’s Board of Governors. If, for some reason, that purchase does fail, through, Afflalo and his group would hope to re-engage. Otherwise, he’ll continue on his unlikely path of the last 10 months, identifying and partnering with people who have the kind of financial connections a just-retired grinder of a player like him doesn’t usually possess in pursuit of the next team that comes on the market.
What was it like being in the room with Glen Taylor and making your presentation? Arron Afflalo: I’ll tell you one thing: Mr. Taylor is really sharp. For 80 years old, he’s really sharp. He’s had over 80 businesses throughout his career. And he understands people. … As a person, I learned a lot from him. I was most thankful because he continuously gave me an opportunity when I came with failed investors, or failed opportunities. He literally worked with me hand in hand for nine months. He was as accessible as I needed him to be. And so, he was a normal guy. I didn’t feel pressure that I was speaking to the owner of a team. The first time we spoke, he said, ‘look, Arron – I don’t know you. I know of you. Your fighting spirit is unbelievable. And if you need anything from me when speaking to investors, please call me.’ He was very accommodating.
Why did you make a run at the Timberwolves? Arron Afflalo: That answer’s pretty easy. If this were any other team, I don’t think I would have had the equal fighting spirit. Knowing Ryan Saunders and knowing Flip Saunders very well, along with the George Floyd situation. … And then when you combine that with the space I was in with the hotel stuff, dealing with billionaire companies and billionaire people, it just created a natural synergy for Minnesota. I just felt that I could help, and be inspirational at the same time. I want to give a lot of credit to Ryan Saunders and Flip Saunders, and all that that city has been through, and Mr. Taylor, for that matter, recognizing that.
Jon Krawczynski: Marc Lore was in Sacramento for the game tonight, his first since signing the letter of intent to buy the Wolves. Met with Vivek Ranadive for a tour of the Kings arena before taking in the game.
"The real agreement is with the NBA. The NBA will make the decision if somebody's going to move or not move," Taylor said. "The NBA will not approve of the Timberwolves moving from here to Seattle. It's in the NBA's interest that in Seattle, that a new team is formed. It's an economic decision that's in the interest of all of the owners." Taylor, who also owns the Star Tribune, said the money new owners could earn for the league with an expansion fee could be upwards of $2 billion. He also said the new owners "are not going to pay" $1.5 billion to buy the Wolves then another $2 billion or so to move the team.
Owners would also have to approve vacating a media market that is ranked 14th in the country, according to the 2020-21 Nielsen rankings. People like to view the Twin Cities as some frozen outpost in the middle of nowhere, but it’s a bigger market than the likes of Detroit, Denver and Miami. Seattle is 12th. And as poorly as things have gone with attendance and competitiveness for the Wolves, sources say that the team’s financials are not in terrible shape, another sign that NBA basketball is more than viable in this market. Now the Wolves need to give fans something to cheer about. Silver told Nichols that expansion is not a “front burner” issue, but the fact that it is being openly acknowledged is notable for the Wolves’ future. And that is where the succession plan becomes important. The plan is for Taylor to remain in control for another 2 1/2 years. By the time Lore and Rodriguez are preparing to accept a transfer of power, that burner could be heating up.
Even though the plan is for Lore and Rodriguez to begin as limited partners, sources said they will still have significant influence in the operations on the basketball and business sides of the operation. Finch said before the game against the Chicago Bulls on Sunday night that he has yet to speak with Rodriguez or Lore, but did have what he deemed an encouraging conversation with Taylor on Sunday morning. “He was very assuring that the transition would be smooth and that it’s his intention to give everybody the best chance for success here,” Finch said, “and he’s excited about the opportunities that are ahead and we talked about our team and as it stands right now.”
Jon Krawczynski: KAT very excited about the prospect of adding A-Rod to Wolves ownership. Told a story of how his mother once essentially helped him lift an A-Rod jersey from a Wal-Mart when the family had hard times financially. KAT is a huge A-Rod fan.
Christopher Hine: Karl-Anthony Towns just relayed a story about when he was younger in a Wal-Mart with his mom when he really wanted an A-Rod jersey. The family didn't have much money, so Towns just put the jersey on, they bought a few other things ... and he walked out with the jersey on.
Dane Moore: Chris Finch says he has had "no contact with the new owners" -- but said he has talked with Glen Taylor about the move. Finch says, he is "excited about a dynamic, new ownership group" -- and that he feels Alex Rodriguez can bring "sex appeal to the organization and city".
Jon Krawczynski: On relocation talk: - It's natural for it to be a concern. - My read is the league prefers expansion, not relocation. - Taylor keeping control for 2.5 more years is important. - Sources on both sides say major investments in MN are already being discussed.
Chris Hine: Just got off the phone with Glen Taylor. He said this deal with A-Rod and Lore happened very quickly, within the last few days. He thought all their personalities meshed and he felt good about doing a deal with them, brings him peace of mind and allows him to still be around.
Shams Charania: Alex Rodriguez and partner Marc Lore are nearing minority stakes with the Minnesota Timberwolves, with plan to take control of the franchise in two years under mentorship of Glen Taylor. Statement from A-Rod and Lore:
Chris Mannix: Glen Taylor has insisted that whoever buys the Timberwolves has to commit to keeping the team in Minneapolis. And the 'Wolves have a long term lease at the Target Center. Still -- will be plenty of questions about ex-Mariner A-Rod's interest in taking the team to Seattle.
Christopher Hine: The agreement does include the Lynx, according to team spokesperson.
Chris Hine: A team spokesperson confirms this news that A-Rod and Marc Lore have entered an exclusive letter of intent to purchase the Timberwolves. it would initially entail a limited partnership with a "pathway" to controlling ownership of the organization.
After Garnett posted on Instagram that he “just got the news that this process of trying to acquire the TWolves is over for me n my group,” Taylor said that neither he nor his representatives ever received any kind of offer from Garnett. “Kevin never contacted me at all saying that he was interested,” Taylor said in a phone call with The Athletic. “Nor was his name listed on any of the buying groups that asked for financial information to review.”
After Kevin Garnett posted on Instagram that he “just got the news that this process of trying to acquire the TWolves is over for me n my group,” Glen Taylor said that neither he nor his representatives ever received any kind of offer from Garnett. “Kevin never contacted me at all saying that he was interested,” Taylor said in a phone call with The Athletic. “Nor was his name listed on any of the buying groups that asked for financial information to review.”
Jon Krawczynski: Appears that KG has officially come to terms with not being involved in a sale of the Wolves. Short on details here so it is unclear if it was a money issue or if other things got in the way.
Sources said Glen Taylor, billionaire owner of the Minnesota Timberwolves, went to the NBA a few months ago with a pitch to sell to Arctos, a private-equity firm formed in 2019, to buy small stakes in teams. But the idea was shot down because Arctos had not been approved by the NBA, sources said. Arctos also recently filed to raise money via a blank-check company that will be used to buy stakes in basketball or baseball teams that need capital to cover losses. This is happening even though neither the NBA nor MLB has approved the controversial idea.
For most of a year, Taylor has explored a sale of the Wolves and Lynx. How’s that coming? “Well, it’s not coming is the best way to say it,” Taylor said. “I haven’t found anything that for sure says I should move ahead.” Taylor’s price tag for the Wolves and Lynx is estimated to be in the $1.5 billion range. With NBA expansion — Las Vegas and Seattle have been mentioned — current team owners could each be in for a reported $160 million expansion fee windfall. “Obviously I’m aware of that — you’ve got to pick your time,” Taylor said, adding that no definite decision for expansion has been made. “The other question: Is now a good time to sell when you don’t have fans? And it’s not a good time.”
If Afflalo’s group emerges as winners in the process, there would be a desire to become pillars in the Twin Cities community, sources said. The group has observed from afar as CEO Ethan Casson, Rosas, Saunders and the rest of the organization has thrust itself into community engagement following the death of George Floyd, which sparked riots across the country and put law enforcement relations with people of color under the microscope. The group includes several people of color who have an interest in the franchise playing a role in the discussion, sources said.
Another question for any transfer of power would center on the futures of Rosas, Saunders, Casson and the rest of the Wolves leadership group. Sources say Afflalo’s group, much like Straus, believes strongly in the leadership core and would not look to make any major changes at the top of basketball or business operations. But no deal, with either group, is imminent.
Haslam, whom Forbes says is worth about $2.9 billion, is one of several people eyeing a purchase of the Timberwolves, the people said, adding that Straus was still in talks to acquire the team. Haslam is the chief executive officer of truck stop company Pilot Flying J, which was founded by his father in 1958. A former investor in the Pittsburgh Steelers, Haslam and his wife, Dee, acquired control of the Browns in 2012. Dee Haslam is chair of the Haslam Sports Group.
Timberwolves owner Glen Taylor recently entered into an exclusivity agreement with former Grizzlies minority owner Daniel E. Straus to sell the Wolves and Lynx, according to reports from the Athletic and KSTP. That exclusivity agreement expired last week, but the Athletic reported the sides are engaged in advanced talks.
But a source told the Star Tribune that while Taylor and Straus are engaged in talks, a sale is not imminent. Information and paperwork needs to be exchanged before either side makes a decision on a deal, the source added.
As Minnesota Timberwolves owner Glen Taylor’s search for a successor reaches its second month, one group’s interest has stood out above the rest. An investment group led by former Memphis Grizzlies minority owner Daniel E. Straus is in advanced discussions to buy the Timberwolves and Lynx from Taylor, sources told The Athletic. The sides still have issues to resolve before any full agreement can be completed, sources said.
The Timberwolves’ availability was first reported on July 21, which is roughly the time that the Straus Group entered into an exclusive negotiating agreement with Taylor. Representatives from the Straus Group visited the Twin Cities two weeks ago for official meetings, toured the team facilities and reviewed financials as part of their due diligence. The sides had entered an exclusivity agreement that formally expired last week, and both parties have continued discussions about a deal, sources said. Those sources added that Straus would keep the Timberwolves in Minneapolis, as Taylor has mandated for his sale.
In an exclusive interview with Sports Headliners, Timberwolves and Lynx owner Glen Taylor said it’s not definite he will sell the franchises. Reports earlier this summer had the 79-year-old Mankato billionaire pursuing a sale of his longtime franchises for $1.2 billon. When asked whether he anticipated a sale soon or not happening for an extended period, he said: “I don’t really know the answer to that right now. We have opened it up to see if people would be interested. At this point we’re trying to see what value would they put on it, and we haven’t finished that. We’re just getting that information together. …We have some people that said they are interested.”
Although not likely, Taylor said it’s possible a sale of the NBA Timberwolves would not include the WNBA Lynx. Presently, one company runs the two franchises, with some employees working for both the Wolves and Lynx. “So that’s the most logical way (of selling),” Taylor said. “If we find a buyer I guess we’ll just have to sit down with that buyer and see what their interest is. I am open to almost anything.”
In 1999 the upstart WNBA was bleeding money as it pioneered opportunities for women on the court and in other basketball positions. Taylor, a socially conscious entrepreneur, became owner of the Lynx expansion franchise and the team joined the Wolves in playing at Target Center. “It isn’t like I thought about it (a lot),” Taylor said. “It just seemed like the right thing to do (women’s pro basketball). “I am more concerned why more (NBA owners)…why they don’t do it. There is nothing wrong with taking some of the money you’ve made on the NBA…putting some of it back into the WNBA. It isn’t going to make anybody broke, or anything like that.”
For a franchise that has dealt with incredible ups and downs, this offseason has been one of a kind, and that includes the news that Taylor, who also owns the Star Tribune, is heavily considering selling the team. Rosas said he has no doubts Taylor will find the right buyer. “To be fair, you have to understand Glen’s tenure and the stage that he is at in his personal life and in his family life,” Rosas said. “We all know this is part of the business. Glen has been unbelievable to me, to my family and to this organization during his time of ownership. But it’s not realistic to think that he’s going to be the owner forever. He has been very great, very supportive, very transparent through this process. I was aware and I knew this was something that he was working on. I know he’s doing everything he can to make sure that this organization moves forward and that we have the right ownership and the resources to be successful moving forward.”
The question becomes, what can Taylor do to make sure that happens? He has always been big on handshake agreements and the strength of a person’s word. But in a deal that league observers expect to soar past $1 billion and will chart the course for the franchise for years to come, the stakes are too big. The Wolves will likely look to include steep financial penalties for moving the team in any purchase agreement, sources told The Athletic. Exactly what that would look like, or how it would be enforced, will be determined through negotiation. As the process picks up — league sources say the Timberwolves have been inundated with interest since things became public last week — there are many factors to consider when examining the franchise’s long-term health in the Twin Cities. The tales of two other cities are worth examining as well.
As difficult as things have been with the Timberwolves of late, including just one playoff appearance since 2004 and home attendance that has plummeted near the bottom of the league, one league executive didn’t see the situation in a top 15 media market to be as dire as the one the Bucks faced. “For Milwaukee, the perfect storm to move was hitting,” the source said. “That storm is not hitting Minnesota right now. You’ve got 15 years on that lease. Minnesota’s a big market. I don’t see that same worry that people in Minnesota should have that people in Milwaukee had.”
The Athletic reached out to a handful of sources at the ownership level to gauge the appetite for addressing the Seattle market, and the return was split. While most viewed the market as teeming with possibility and deserving of an NBA team, the path to getting there was not as unanimous. Several sources said a preference would be to put an expansion team in Seattle, which would presumably bring a much larger startup fee than a team would be charged to relocate. But others have insisted that expansion has not really come up in league discussions, pointing to commissioner Adam Silver’s tepid public responses and a preference to table the issue until the next television rights deal is negotiated in 2025.
Orbach’s group would likely be committed to Minneapolis given his investment around Target Center and his brief history of coming to games here. Former Timberwolf Kevin Garnett has publicly stated that he wants to buy the team and keep it right where it is and The Associated Press reported that a group fronted by former NBA player Arron Afflalo would keep the team in Minnesota as well. There are at least five other legitimate bidders, sources said, which plays into Taylor’s hands. No matter the current state of an NBA franchise, there are only 30 of them in the world. The scarcity, and the status that comes from owning one, is intoxicating. If a group wants to get the upper hand on its competitors, agreeing to stronger legal frameworks to keep the team in Minnesota could be a way to do that.
The question becomes, what can Taylor do to make sure that happens? He has always been big on handshake agreements and the strength of a person’s word. But in a deal that league observers expect to soar past $1 billion and will chart the course for the franchise for years to come, the stakes are too big. The Wolves will likely look to include steep financial penalties for moving the team in any purchase agreement, sources told The Athletic. Exactly what that would look like, or how it would be enforced, will be determined through negotiation. As the process picks up — league sources say the Timberwolves have been inundated with interest since things became public last week — there are many factors to consider when examining the franchise’s long-term health in the Twin Cities. The tales of two other cities are worth examining as well.
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