Sale fell through, Glen Taylor remains owner

[Q-is-here]

I think most people here know this, but just in case.....

Capital appreciation is different than profit. If I own a Picasso that doubles in value over time, I don't realize any of that money until I actually sell it. Ever hear of folks that are house-rich, but cash-poor? In places like California you have middle class home owners whose net worth is over $1M thanks largely to the value of their home, yet they can hardly make ends meet in day to day living expenses.

So just because the market value of the franchise has gone up a bunch does not mean it's actually profitable. Extremely wealthy people don't buy professional sports franchises for the positive cash flow it spins off. They buy them because a) it's a status symbol that very few people on earth can obtain, and b) it could end up being a very good investment that appreciates, but they don't realize any of that value until they actually sell it.

As fans we can all make value judgments on how much an owner should invest in the franchise (stadiums, facilities, salaries, etc.), but it's anathema to most business people to see a bunch of their money disintegrate in taxes, regardless of how wealthy he or she is.

And lastly, a lot of these wealthy families have a certain amount earmarked for other businesses, heirs, or philanthropic causes that those beneficiaries are counting on. So when we complain about owners not spending more of their money on the sports team we follow, perhaps it's not about them being greedy bastards, but it's because they already have a huge percentage of their wealth earmarked for other causes and they can only spend X amount on the sports franchise without having to dip into other funds.

[AbeVigodaLive]

OOOOOOH... look at Q bragging about owning a Picasso.

What a dink.

[Q-is-here]

OOOOOOH... look at Q bragging about owning a Picasso.

What a dink.

Heh, emphasis on "if".

[FNG]

I don't know for sure, but I suspect it might be this one:

https://www.artranked.com/images/94/948 ... 5aa15d.jpg

[Wolvesfan21]

I don't think Lore and ARod can truly afford the team. They are both insanely rich by everyone's standards, but being NBA-Owner rich is a horse of a different color.

I predict Glen wins the power struggle and keeps the team.

I predict TC leaves for a more stable situation.

I predict the Wolves make a reasonable trade involving KAT which brings a point guard and draft capital back.

I predict the rest of the team remains mostly intact except for some free agents like NAW we won't be able to retain.

I predict we make the WC finals this year, losing to the Nuggets in game 7 of a spirited series.

I predict we remain relevant going forward as a top 4 team in the West

Didn't they basically double their money already on the 40% they officially own though? I mean making a nice 500 million in a couple years isn't exactly nothing (on paper to be fair). I don't buy into they can't "afford to pay lux tax" and that spiel either. We don't have hard figures on how much the team is making/losing after all revenue and expenses. Considering the value has gone up tremendously I would assume the franchise is really quite profitable right now. That means yes they can likely afford to go into the second apron, either way. Not even counting the 500 million in profit they already made in a couple years. lol

Now are Lore/ARod like the GSW owners rich? No. It doesn't mean the team can't still in the end make money and still pay a big chunk in lux tax too AND still be profitable. I just don't think the value of a business goes up THAT much if it loses money. That doesn't make sense in the most basic terms.

As far as what actually happened. I believe the paperwork and financing was approved and in on time. Now did Glen actually receive his money in his account by then. That is his sticking point, and the fact he said he has sellers remorse since the team is great and making money. lol

The point is Lore and ARod couldn't buy the team on a single transaction. They had to draw it out over many months. And then with Woj's report it begins to make sense that they don't have the horsepower of a traditional NBA ownership. They will surely make a lot of money when they sell their stake, but that doesn't mean they have the daily operating capital to live over the 2nd apron.

They can always borrow against their profit if needed which is why I mentioned their quick gains. You make 500 million on paper and you can turn a portion of that liquid pretty easily to run operating expenses. They can pay Lux tax easily next year. To say they can't is simply a lie. It's not like the Wolves are even capable of that much cutting salary either. Even if you trade KAT you're not saving much in the first year due to having to take back salary. You could in year two though. NBA contracts are gauranteed. This hit piece by Glen is a little silly to me. It just has too many holes in it.

Now for how long they could pay 2nd apron it depends on the future success of the franchise and themselves as businessmen more so then for other owners. It They could afford to have their arenas mostly empty and no merch sales for a while if things went super south.

[FNG]

Didn't they basically double their money already on the 40% they officially own though? I mean making a nice 500 million in a couple years isn't exactly nothing (on paper to be fair). I don't buy into they can't "afford to pay lux tax" and that spiel either. We don't have hard figures on how much the team is making/losing after all revenue and expenses. Considering the value has gone up tremendously I would assume the franchise is really quite profitable right now. That means yes they can likely afford to go into the second apron, either way. Not even counting the 500 million in profit they already made in a couple years. lol

Now are Lore/ARod like the GSW owners rich? No. It doesn't mean the team can't still in the end make money and still pay a big chunk in lux tax too AND still be profitable. I just don't think the value of a business goes up THAT much if it loses money. That doesn't make sense in the most basic terms.

As far as what actually happened. I believe the paperwork and financing was approved and in on time. Now did Glen actually receive his money in his account by then. That is his sticking point, and the fact he said he has sellers remorse since the team is great and making money. lol

The point is Lore and ARod couldn't buy the team on a single transaction. They had to draw it out over many months. And then with Woj's report it begins to make sense that they don't have the horsepower of a traditional NBA ownership. They will surely make a lot of money when they sell their stake, but that doesn't mean they have the daily operating capital to live over the 2nd apron.

They can always borrow against their profit if needed which is why I mentioned their quick gains. You make 500 million on paper and you can turn a portion of that liquid pretty easily to run operating expenses. They can pay Lux tax easily next year. To say they can't is simply a lie. It's not like the Wolves are even capable of that much cutting salary either. Even if you trade KAT you're not saving much in the first year due to having to take back salary. You could in year two though. NBA contracts are gauranteed. This hit piece by Glen is a little silly to me. It just has too many holes in it.

Now for how long they could pay 2nd apron it depends on the future success of the franchise and themselves as businessmen more so then for other owners. It They could afford to have their arenas mostly empty and no merch sales for a while if things went super south.

WF, I agree with you that the Lore group could come up with the resources to pay a lux tax. But Woj's tweet yesterday that the group submitted a budget to the NBA with a reduction in payroll to $171 million tells me that not only are they unwilling to pay a lux tax, but they also have a viable plan to cut enough payroll to get below the threshold. Obviously we still have a long way to go here, but Woj's tweet yesterday makes my wary of a Lore/Arod regime.

[Wolvesfan21]

The point is Lore and ARod couldn't buy the team on a single transaction. They had to draw it out over many months. And then with Woj's report it begins to make sense that they don't have the horsepower of a traditional NBA ownership. They will surely make a lot of money when they sell their stake, but that doesn't mean they have the daily operating capital to live over the 2nd apron.

They can always borrow against their profit if needed which is why I mentioned their quick gains. You make 500 million on paper and you can turn a portion of that liquid pretty easily to run operating expenses. They can pay Lux tax easily next year. To say they can't is simply a lie. It's not like the Wolves are even capable of that much cutting salary either. Even if you trade KAT you're not saving much in the first year due to having to take back salary. You could in year two though. NBA contracts are gauranteed. This hit piece by Glen is a little silly to me. It just has too many holes in it.

Now for how long they could pay 2nd apron it depends on the future success of the franchise and themselves as businessmen more so then for other owners. It They could afford to have their arenas mostly empty and no merch sales for a while if things went super south.

WF, I agree with you that the Lore group could come up with the resources to pay a lux tax. But Woj's tweet yesterday that the group submitted a budget to the NBA with a reduction in payroll to $171 million tells me that not only are they unwilling to pay a lux tax, but they also have a viable plan to cut enough payroll to get below the threshold. Obviously we still have a long way to go here, but Woj's tweet yesterday makes my wary of a Lore/Arod regime.

It's not really even possible to cut that much though next year, NBA contracts are of course guaranteed. Between Ant, KAT, Rudy, Naz, Jaden, all multi year contracts, etc... It's just sensationalist reporting. A budget projection could have simply been submitted for financing from Arods team. Making the Wolves look very profitable and thus better terms/safer/lower interest rate from the financers. They simply have too many players under contract and even if they traded and cut as much as possible I just don't see it. They could cut some for sure, but more so would have to be for 2026. Take back an expiring for KAT for example and that comes off the books the next following season. Not next year. The story doesn't make any sense. I call it BS from Glens side.

[WildWolf2813]

They can always borrow against their profit if needed which is why I mentioned their quick gains. You make 500 million on paper and you can turn a portion of that liquid pretty easily to run operating expenses. They can pay Lux tax easily next year. To say they can't is simply a lie. It's not like the Wolves are even capable of that much cutting salary either. Even if you trade KAT you're not saving much in the first year due to having to take back salary. You could in year two though. NBA contracts are gauranteed. This hit piece by Glen is a little silly to me. It just has too many holes in it.

Now for how long they could pay 2nd apron it depends on the future success of the franchise and themselves as businessmen more so then for other owners. It They could afford to have their arenas mostly empty and no merch sales for a while if things went super south.

WF, I agree with you that the Lore group could come up with the resources to pay a lux tax. But Woj's tweet yesterday that the group submitted a budget to the NBA with a reduction in payroll to $171 million tells me that not only are they unwilling to pay a lux tax, but they also have a viable plan to cut enough payroll to get below the threshold. Obviously we still have a long way to go here, but Woj's tweet yesterday makes my wary of a Lore/Arod regime.

It's not really even possible to cut that much though next year, NBA contracts are of course guaranteed. Between Ant, KAT, Rudy, Naz, Jaden, all multi year contracts, etc... It's just sensationalist reporting. A budget projection could have simply been submitted for financing from Arods team. Making the Wolves look very profitable and thus better terms/safer/lower interest rate from the financers. They simply have too many players under contract and even if they traded and cut as much as possible I just don't see it. They could cut some for sure, but more so would have to be for 2026. Take back an expiring for KAT for example and that comes off the books the next following season. Not next year. The story doesn't make any sense. I call it BS from Glens side.

If they were that worried about cutting payroll, Conley doesn't come back at all. Gobert never becomes a Wolf. Instead of Reid getting that time, Lore and A-Rod would nudge Finch to play Minott or Miller since they're on cheap deals.

[Wolvesfan21]

WF, I agree with you that the Lore group could come up with the resources to pay a lux tax. But Woj's tweet yesterday that the group submitted a budget to the NBA with a reduction in payroll to $171 million tells me that not only are they unwilling to pay a lux tax, but they also have a viable plan to cut enough payroll to get below the threshold. Obviously we still have a long way to go here, but Woj's tweet yesterday makes my wary of a Lore/Arod regime.

It's not really even possible to cut that much though next year, NBA contracts are of course guaranteed. Between Ant, KAT, Rudy, Naz, Jaden, all multi year contracts, etc... It's just sensationalist reporting. A budget projection could have simply been submitted for financing from Arods team. Making the Wolves look very profitable and thus better terms/safer/lower interest rate from the financers. They simply have too many players under contract and even if they traded and cut as much as possible I just don't see it. They could cut some for sure, but more so would have to be for 2026. Take back an expiring for KAT for example and that comes off the books the next following season. Not next year. The story doesn't make any sense. I call it BS from Glens side.

If they were that worried about cutting payroll, Conley doesn't come back at all. Gobert never becomes a Wolf. Instead of Reid getting that time, Lore and A-Rod would nudge Finch to play Minott or Miller since they're on cheap deals.

Agreed and would you also already being paying Connelly if the franchise simply couldn't afford it? 10 million is a real good chunk to pay an exec. If you are going on the cheap you can pay way less. ARod and Lore ARE already part owners. So going from a minor stake to a major stake isn't that major if the business is successful. In the end I just feel like this "house poor" owners spiel is complete crap. The Wolves probably still end up with a good profit after lux tax this year. Ant and team success is a major factor for sure though. So will it continue is the question and I think it will. We've got a potential top player in the league. Merch, tickets and eyeballs are all biig positives going forward for the franchise.

[Lipoli390]

A few thoughts:

1. I don’t think we know nearly enough to draw any conclusions from the Woj report about the document showing a payroll below the salary cap. We don’t know exactly what this document is. Moreover, we don’t know whether it was an indicator of actual intent or simply one of a number of financial scenarios. The document certainly isn’t binding. I’d want to know a lot more before drawing any conclusions about the future under Lore and A-Rod.

2. I don’t believe the purchase was strung out because Lore and A-Rod didn’t have the money for an immediate purchase. All the reports I’ve read have indicated that the ownership transition was delayed because that’s the way Glen wanted it. As we all know, he’s always been reluctant to sell. The delay clearly made it more difficult for Lore and A-Rod because interest rates have gone up substantially since the deal was struck, significantly increasing financing costs for Lore and A-Rod. Any sophisticated businessperson like Lore knew that rates were historically low when they first entered into the purchase agreement and that delay was a financial risk to them. So I don’t believe they would have agreed to the gradual transition if Glen hadn’t insisted on it.

3. Finally, while it would appear that Lore and A-Rod don’t have the enormous wealth of some NBA owners, I don’t think we can reasonably conclude that they wouldn’t be able or willing to pay the luxury tax for a season or two to remain a championship contender. Having a team competing for a championship drives revenue through ticket sales, media and sponsorships. At their current level of play, the Wolves are drawing capacity crowds and will almost certainly garner more national media attention and interest from potential sponsors. So you can’t look at the luxury tax payments without netting them against additional revenue that comes from being a winning team. And while Lore and A-Rod aren’t as wealthy as some owners, it’s not like they don’t have the assets to sustain luxury tax payment for a couple years.