SameOldNudityDrew wrote: ↑Fri Jun 07, 2024 3:59 pm
This is great news. There will be a mountain of money behind this team. Luxury tax, shmuxury tax!
No way this portents a move to NY. They already have 2 teams.
This can only be good news.
Pretty sure the word "portents" hasn't appeared since the ESPN board days...
While I agree with the general sentiment here that this is good news, I also think WF makes a good point above. Billionaires (and near billionaires) buy sports franchises because 1) they want to be in the game, and 2) historically they have always gone up in value...and dramatically so in the case of the NBA. But things change, and there is no guarantee that the value will continue to go up. At some point, a group of relatively new owners may find their franchise is no longer as valuable as it was when they bought it. I understand that the TV contracts prop up the values, and right now, there doesn't appear to be any lightening of demand to watch the NBA. But for an example of how quickly things change, look no further than pop music. Last summer it appeared there was no ceiling for how much fans would pay for a concert ticket (mostly Swift and Beyonce, but others too). But this summer things have changed drastically. Performers like Bad Bunny and the Black Keys have significantly cut back their planned concert dates, and Jennifer Lopez has canceled her entire summer tour. I'm not going to shed many tears if billionaires like Bloomberg end up holding the bag, but I think they're kidding themselves if they think they are going to get the kind of astronomical returns owners like Glen Taylor has gotten.
Sorry, in the verb form it should be "portends!" In my defense, it was really late and I was falling asleep!
I am guessing he was calling you out due to style rather than substance.
Regarding Taylor's "astronomical returns", I am not seeing it. Taylor owned the team for around thirty years. His returns seem very reasonable over that time period.
Carlos Danger wrote: ↑Fri Jun 07, 2024 5:53 am
Only potential red flag is there are now a lot of NY guys owing our team....I know they can't move us back to NY because they already have teams. But I'm trying to wrap my head around why NY guys would be so interested in buying OUR shitty franchise? Did they just get a really good deal and hoping to flip/make more $? I'm not much of a G. Taylor fan. But he is a home grown success story. It made sense that he bought the team because of his roots. Help me understand what a bunch of New Yorkers have in mind with this deal?
I spent several years living in NJ right across from NYC - people are different out there vs. here. I feel like there is something the new potential owners have up their sleeve that we won't know about until later...
Because there are only 30 NBA franchises and they have become extremely valuable. There are very few people in Minnesota, much less the greater Midwest, that have the kind of money to buy the Timberwolves. The kind of money one needs to own it tend to reside in places like New York, California, Texas, and Florida.
I haven't actually looked it up, but my guess a lot of owners of professional sports franchises don't have their primary residence in the state of the franchise.
You nailed it, Q. A few additional thoughts:
1. As a result of having only 30 teams as you note, all NBA franchises, including what some might call “shitty” ones, are dramatically increasing in value. And yet, they are all also incredibly safe investments because, unlike other businesses, an NBA franchise will never disappear in Chapter 7 bankruptcy or decline in value to the point where you have to sell at a loss. It’s really rare to find a business with rapidly escalating valuations that is also almost entirely free from downside risk.
2. Everyone who hasn’t been living in a cave the past few years knows the NBA is going to expand into at least two new markets (Las Vegas & Seattle) in the next five years. Expansion will result in HUGE franchise fee distributions to all the existing NBA organizations. So there’s a huge pile of free money on the near horizon for any NBA owner.
3. Owning an NBA franchises can provide cross-marketing opportunities for an owner’s other businesses. An NBA franchise is another entry point into the incredibly lucrative entertainment business with stars and rapidly loyal followers. Lot’s of opportunity for really smart business people who have already amassed billions through their business acumen.
4. An NBA owner with a franchise that has operational losses can turn those losses into significant tax benefits.
5. While the Timberwolves might be fairly considered a “shitty” franchise, the team is in a great market and it’s the market that matters. The Wolves are in the Nation’s 15th largest media market. To put that in perspective, Denver is 16th, Orlando 17th, Miami 18th, Cleveland 19th, Portland 22nd, Milwaukee 38th and Vegas 40th. Therein lies the value since the NBA is driven largely by media revenue. Also, the Twin Cities has a particularly strong economy with lots of money. Minneapolis/St. Paul together are 9th nationally in the number of Fortune 500 company headquarters. Minnesota has one of most diverse and therefore resilient economies in the Country. There’s a reason David Stern intervened to keep the Wolves in Minneapolis when Glen Taylor appeared out of nowhere to buy the team. This is an attractive market for owing a professional sports franchise.
But that is my concern. MN might be the 15 (middle) market team. But what if a San Jose or Seattle is available (possibly bigger/better market). Can they move our team there?
We all can agree it's all about the $ with these guys. I don't know what the rules are for expansion areas (does it have to be a new/start up or can existing teams move).
I seem to recall Taylor had a clause about not moving the team in his deal. Not sure how all that works.
Because there are only 30 NBA franchises and they have become extremely valuable. There are very few people in Minnesota, much less the greater Midwest, that have the kind of money to buy the Timberwolves. The kind of money one needs to own it tend to reside in places like New York, California, Texas, and Florida.
I haven't actually looked it up, but my guess a lot of owners of professional sports franchises don't have their primary residence in the state of the franchise.
You nailed it, Q. A few additional thoughts:
1. As a result of having only 30 teams as you note, all NBA franchises, including what some might call “shitty” ones, are dramatically increasing in value. And yet, they are all also incredibly safe investments because, unlike other businesses, an NBA franchise will never disappear in Chapter 7 bankruptcy or decline in value to the point where you have to sell at a loss. It’s really rare to find a business with rapidly escalating valuations that is also almost entirely free from downside risk.
2. Everyone who hasn’t been living in a cave the past few years knows the NBA is going to expand into at least two new markets (Las Vegas & Seattle) in the next five years. Expansion will result in HUGE franchise fee distributions to all the existing NBA organizations. So there’s a huge pile of free money on the near horizon for any NBA owner.
3. Owning an NBA franchises can provide cross-marketing opportunities for an owner’s other businesses. An NBA franchise is another entry point into the incredibly lucrative entertainment business with stars and rapidly loyal followers. Lot’s of opportunity for really smart business people who have already amassed billions through their business acumen.
4. An NBA owner with a franchise that has operational losses can turn those losses into significant tax benefits.
5. While the Timberwolves might be fairly considered a “shitty” franchise, the team is in a great market and it’s the market that matters. The Wolves are in the Nation’s 15th largest media market. To put that in perspective, Denver is 16th, Orlando 17th, Miami 18th, Cleveland 19th, Portland 22nd, Milwaukee 38th and Vegas 40th. Therein lies the value since the NBA is driven largely by media revenue. Also, the Twin Cities has a particularly strong economy with lots of money. Minneapolis/St. Paul together are 9th nationally in the number of Fortune 500 company headquarters. Minnesota has one of most diverse and therefore resilient economies in the Country. There’s a reason David Stern intervened to keep the Wolves in Minneapolis when Glen Taylor appeared out of nowhere to buy the team. This is an attractive market for owing a professional sports franchise.
But that is my concern. MN might be the 15 (middle) market team. But what if a San Jose or Seattle is available (possibly bigger/better market). Can they move our team there?
We all can agree it's all about the $ with these guys. I don't know what the rules are for expansion areas (does it have to be a new/start up or can existing teams move).
I seem to recall Taylor had a clause about not moving the team in his deal. Not sure how all that works.
We’re not “middle” market. We’re 15th of 210 media markets. And there are only two bigger media markets that don’t currently have an NBA team - Seattle and Tampa/St. Pete/Sarasota. It’s widely known that Seattle has been selected to get a new franchise as part of the next round of expansion in the next few years and expansion means a new team; not moving an exiting one. The demographics of the Tampa market aren’t conducive to an NBA franchise and Florida already has 2 teams. San Jose is part of the San Francisco and of course they already have the Warriors. So there simply aren’t many or even any places to go with better NBA economics than the Twin Cities.
Of course, if Lore and A-Rod are struggling to get a new arena 5 or 6 years down the road, they might start looking to move or sell the franchise to billionaires in other attractive markets like St. Louis (24), Nashville (27), Columbus (32), Kansas City (33), or Louisville (48/rabid basketball community). But it’s noteworthy that those are all significantly smaller media markets than the Twin Cities. More importantly, the odds of all those things aligning at any point, much less within the next 10 years, are slim to none and slim’s out of town.
So it’s highly likely this franchise stays here as far as the eye can see regardless of whether it’s owned by Glen Taylor’s heirs or the Lore/A-Rod tandem along with Bloomberg. My concern about ownership relates to who we can trust to build and maintain a sustainable winner.
Lipoli390 wrote: ↑Sun Jun 09, 2024 10:06 am
We’re not “middle” market. We’re 15th of 210 media markets. And there are only two bigger media markets that don’t currently have an NBA team - Seattle and Tampa/St. Pete/Sarasota. It’s widely known that Seattle has been selected to get a new franchise as part of the next round of expansion in the next few years and expansion means a new team; not moving an exiting one. The demographics of the Tampa market aren’t conducive to an NBA franchise and Florida already has 2 teams. San Jose is part of the San Francisco and of course they already have the Warriors. So there simply aren’t many or even any places to go with better NBA economics than the Twin Cities.
Of course, if Lore and A-Rod are struggling to get a new arena 5 or 6 years down the road, they might start looking to move or sell the franchise to billionaires in other attractive markets like St. Louis (24), Nashville (27), Columbus (32), Kansas City (33), or Louisville (48/rabid basketball community). But it’s noteworthy that those are all significantly smaller media markets than the Twin Cities. More importantly, the odds of all those things aligning at any point, much less within the next 10 years, are slim to none and slim’s out of town.
So it’s highly likely this franchise stays here as far as the eye can see regardless of whether it’s owned by Glen Taylor’s heirs or the Lore/A-Rod tandem along with Bloomberg. My concern about ownership relates to who we can trust to build and maintain a sustainable winner.
We are middle market in the context of existing NBA teams. NY has 7.6M homes per Nielsen ratings. The Twins Cities has 1.8M per Nielsen. Most of the existing Franchises are around 1 to 2M homes, so don't get too caught up in the #15. Outside of the top (mostly East Coast and West Coast) it's a middle tier pack of franchises within a few hundred thousand home of each other. I personally consider us part of that middle pack vs. a top tier market.
You mention their are only a few existing markets larger than our without a team and that is correct....for the US. But what if they expand internationally?
Another possibility is what you mentioned where an open market dangles a new arena to entice a move. Even if it's a slightly smaller market, it might make financial sense to move in that situation - especially if you are looking to flip a franchise.
It is what it is. I'm certainly not losing any sleep over it. But I learned a long time ago not to trust New Yorkers! And I do recall Taylor stating he had some sort of contingencies in the sale to keep the team here (for how long - IDK).
Of course, if Lore and A-Rod are struggling to get a new arena 5 or 6 years down the road, they might start looking to move or sell the franchise to billionaires in other attractive markets like St. Louis (24), Nashville (27), Columbus (32), Kansas City (33), or Louisville (48/rabid basketball community). But it’s noteworthy that those are all significantly smaller media markets than the Twin Cities. More importantly, the odds of all those things aligning at any point, much less within the next 10 years, are slim to none and slim’s out of town.
So it’s highly likely this franchise stays here as far as the eye can see regardless of whether it’s owned by Glen Taylor’s heirs or the Lore/A-Rod tandem along with Bloomberg. My concern about ownership relates to who we can trust to build and maintain a sustainable winner.
I think the new arena situation is coming to a head a lot sooner than that.
In fact, I've come around a bit on my "keep the team together" take a bit more because of it. Especially with the Twins situation, I can see the new ownership team investing their own money into the current team as a sign of good faith. And that will lead to (1) continued winning (2) more excitement about the team (3) as it will be the most successful pro team in the state.
Then, with all that attention and excitement and good vibes toward the new ownership group "committed to winning"... the owners can ask for public contributions to replace the "worst NBA arena." And remember, as with ALL of these situations, the threat of relocation will be used at some point.
[Note: I'm pretty confident that Lore/Rodriguez will own this team. But the delay is really f-ing with their carefully choreographed plan to ask for a new arena. So maybe it really will be 5 years before the threat of relocation happens?]
Last edited by AbeVigodaLive on Mon Jun 10, 2024 7:46 am, edited 1 time in total.
This is the best article I’ve seen explaining the ownership situation.
It looks like Bloomberg is in only for the limited amount needed to buy Taylor’s last 20% share before March 2025 when Lore/A-Rod would otherwise be allowed to buy that remaining amount. I think it just reflects the acrimony between the buyers and Taylor right now - i.e., Lore and A-Rod do not want Taylor to be a co-owner of any share of the team once the arbitration is over sometime this summer. Bloomberg’s investment will allow the buyers to make Taylor an offer he can’t refuse for that final 20%. It’s also probably a signal to the arbitrator that there should be no doubt about the financial strength of the buyers.
I just don’t see how Taylor wins this arbitration. The arbitrator would have to find that the contract required the buyers to transfer the final $600 million payment to Taylor by March 27, 2024 or the contract could be unilaterally cancelled by Taylor even though the contract gave the buyers the right to a 90-day extension pending NBA League approval and in spite of the fact that they buyers had already paid for 40% of the team as part of an overall deal to purchase an additional 40% and take majority control by the end of this season. The right to a 90-day extension pending League approval would make no sense if the buyers were required to transfer the final cash payment prior to getting the extension. The whole point of an extension is to postpone final payment pending final sign-off from the League. In theory, the League could reject the deal. That’s why the extension is there. It’s there so the buyers don’t have to transfer $600 million for something the League might not let them have. It’s a classic contingency. The only sensible interpretation is that the buyers were required to submit financial commitment documentation by March 27 with final payment due 90 days later upon League approval. Unless you believe Lore is lying that’s exactly what the buyers did. And again, the buyers had already followed through earlier by paying for the initial 40% so there’s no reason to question the buyers’ good faith or ability to come up with the money. Taylor’s grasping at straws in my view.
This is the best article I’ve seen explaining the ownership situation.
It looks like Bloomberg is in only for the limited amount needed to buy Taylor’s last 20% share before March 2025 when Lore/A-Rod would otherwise be allowed to buy that remaining amount. I think it just reflects the acrimony between the buyers and Taylor right now - i.e., Lore and A-Rod do not want Taylor to be a co-owner of any share of the team once the arbitration is over sometime this summer. Bloomberg’s investment will allow the buyers to make Taylor an offer he can’t refuse for that final 20%. It’s also probably a signal to the arbitrator that there should be no doubt about the financial strength of the buyers.
I just don’t see how Taylor wins this arbitration. The arbitrator would have to find that the contract required the buyers to transfer the final $600 million payment to Taylor by March 27, 2024 or the contract could be unilaterally cancelled by Taylor even though the contract gave the buyers the right to a 90-day extension pending NBA League approval and in spite of the fact that they buyers had already paid for 40% of the team as part of an overall deal to purchase an additional 40% and take majority control by the end of this season. The right to a 90-day extension pending League approval would make no sense if the buyers were required to transfer the final cash payment prior to getting the extension. The whole point of an extension is to postpone final payment pending final sign-off from the League. In theory, the League could reject the deal. That’s why the extension is there. It’s there so the buyers don’t have to transfer $600 million for something the League might not let them have. It’s a classic contingency. The only sensible interpretation is that the buyers were required to submit financial commitment documentation by March 27 with final payment due 90 days later upon League approval. Unless you believe Lore is lying that’s exactly what the buyers did. And again, the buyers had already followed through earlier by paying for the initial 40% so there’s no reason to question the buyers’ good faith or ability to come up with the money. Taylor’s grasping at straws in my view.
Lip, I am thinking exactly the opposite. I find it hard to believe that the NBA doesn't have a copy of the contract between the two parties and yet they are waiting on the league approval process. What I continue to hear from Lore is that they secured funding and submitted paperwork to the NBA, but I never hear him state that they submitted documents and put the money in escrow for the purchase. If they had done that, they would have documents signed by Taylor.
You don't do a billion plus deal and rely on handshakes.
Bloomberg being anywhere near this scares the hell out of me. He has the kind of money to get almost anything he wants including a relocation.
This is the best article I’ve seen explaining the ownership situation.
It looks like Bloomberg is in only for the limited amount needed to buy Taylor’s last 20% share before March 2025 when Lore/A-Rod would otherwise be allowed to buy that remaining amount. I think it just reflects the acrimony between the buyers and Taylor right now - i.e., Lore and A-Rod do not want Taylor to be a co-owner of any share of the team once the arbitration is over sometime this summer. Bloomberg’s investment will allow the buyers to make Taylor an offer he can’t refuse for that final 20%. It’s also probably a signal to the arbitrator that there should be no doubt about the financial strength of the buyers.
I just don’t see how Taylor wins this arbitration. The arbitrator would have to find that the contract required the buyers to transfer the final $600 million payment to Taylor by March 27, 2024 or the contract could be unilaterally cancelled by Taylor even though the contract gave the buyers the right to a 90-day extension pending NBA League approval and in spite of the fact that they buyers had already paid for 40% of the team as part of an overall deal to purchase an additional 40% and take majority control by the end of this season. The right to a 90-day extension pending League approval would make no sense if the buyers were required to transfer the final cash payment prior to getting the extension. The whole point of an extension is to postpone final payment pending final sign-off from the League. In theory, the League could reject the deal. That’s why the extension is there. It’s there so the buyers don’t have to transfer $600 million for something the League might not let them have. It’s a classic contingency. The only sensible interpretation is that the buyers were required to submit financial commitment documentation by March 27 with final payment due 90 days later upon League approval. Unless you believe Lore is lying that’s exactly what the buyers did. And again, the buyers had already followed through earlier by paying for the initial 40% so there’s no reason to question the buyers’ good faith or ability to come up with the money. Taylor’s grasping at straws in my view.
Lip, I am thinking exactly the opposite. I find it hard to believe that the NBA doesn't have a copy of the contract between the two parties and yet they are waiting on the league approval process. What I continue to hear from Lore is that they secured funding and submitted paperwork to the NBA, but I never hear him state that they submitted documents and put the money in escrow for the purchase. If they had done that, they would have documents signed by Taylor.
You don't do a billion plus deal and rely on handshakes.
Bloomberg being anywhere near this scares the hell out of me. He has the kind of money to get almost anything he wants including a relocation.
Why do you think Bloomberg would want to move the team and where do you think he'd move it to?
This is the best article I’ve seen explaining the ownership situation.
It looks like Bloomberg is in only for the limited amount needed to buy Taylor’s last 20% share before March 2025 when Lore/A-Rod would otherwise be allowed to buy that remaining amount. I think it just reflects the acrimony between the buyers and Taylor right now - i.e., Lore and A-Rod do not want Taylor to be a co-owner of any share of the team once the arbitration is over sometime this summer. Bloomberg’s investment will allow the buyers to make Taylor an offer he can’t refuse for that final 20%. It’s also probably a signal to the arbitrator that there should be no doubt about the financial strength of the buyers.
I just don’t see how Taylor wins this arbitration. The arbitrator would have to find that the contract required the buyers to transfer the final $600 million payment to Taylor by March 27, 2024 or the contract could be unilaterally cancelled by Taylor even though the contract gave the buyers the right to a 90-day extension pending NBA League approval and in spite of the fact that they buyers had already paid for 40% of the team as part of an overall deal to purchase an additional 40% and take majority control by the end of this season. The right to a 90-day extension pending League approval would make no sense if the buyers were required to transfer the final cash payment prior to getting the extension. The whole point of an extension is to postpone final payment pending final sign-off from the League. In theory, the League could reject the deal. That’s why the extension is there. It’s there so the buyers don’t have to transfer $600 million for something the League might not let them have. It’s a classic contingency. The only sensible interpretation is that the buyers were required to submit financial commitment documentation by March 27 with final payment due 90 days later upon League approval. Unless you believe Lore is lying that’s exactly what the buyers did. And again, the buyers had already followed through earlier by paying for the initial 40% so there’s no reason to question the buyers’ good faith or ability to come up with the money. Taylor’s grasping at straws in my view.
Lip, I am thinking exactly the opposite. I find it hard to believe that the NBA doesn't have a copy of the contract between the two parties and yet they are waiting on the league approval process. What I continue to hear from Lore is that they secured funding and submitted paperwork to the NBA, but I never hear him state that they submitted documents and put the money in escrow for the purchase. If they had done that, they would have documents signed by Taylor.
You don't do a billion plus deal and rely on handshakes.
Bloomberg being anywhere near this scares the hell out of me. He has the kind of money to get almost anything he wants including a relocation.
Why do you think Bloomberg would want to move the team and where do you think he'd move it to?
He seems to pride himself on being kind of a visionary, so maybe...
