Marc Lore, who several years ago said that owning the Timberwolves was a dream come true, largely walked away from his option to buy control of the team leaving it to Alex Rodriguez.
Marc Lore, who several years ago said that owning the Minnesota Timberwolves was a dream come true, largely walked away from his option to buy control of the team leaving it to Alex Rodriguez, sources close to the situation said.
If the deal closed, Lore would have become the owner of the team with his pal and co-investor Rodriguez taking a more secondary role, sources said.
Yet, Lore who told the NBA he was worth about $4 billion did not want to invest much of the $520 million needed for him and A-Rod to increase their stake in the team, along with co-investors, from 40 to 80 percent by Wednesday’s deadline
Timberwolves owner Glen Taylor on Thursday terminated the sale, ending Lore and A-Rod’s chances of buying a majority stake in the team.
Lore was willing to invest a relatively little amount of money, but wanted A-Rod, who had put in a lot less than Lore, to catch up in this new round of financing to a level much closer to what he had invested, sources with direct knowledge of the situation said.
The initial plan was Lore and A-Rod would invest roughly equally in the team. That meant A-Rod needed to raise most of the money for this next investment round and he tried to for months.
A-Rod did not use an investment banker in recent months which could have helped, sources said.
He and Lore agreed to buy the Timberwolves in a three-step process in 2021 at a $1.5 billion valuation. They together have bought 40 percent of the team in two stages. A-Rod, who is believed to be worth much less than Lore, needed to find the money for this next payment largely by himself, sources with direct knowledge of the situation said.
A-Rod was trying to sell interests in the new round of financing not at his $1.5 billion valuation but at a valuation of more than $2 billion, sources with close knowledge of the situation said. The team in three years had gone up in value, based on other NBA sales, to roughly $3 billion.
A-Rod would have pocketed the difference between his buy-in price of $1.5 billion and the valuation at which he sold the stakes, sources close to the situation said.
Perhaps, he would have had an easier time had he lowered his expectations.
Not many parties wanted to play second fiddle to the Lore and A-Rod ownership group.
“Alex has gone through everyone,” a source who spoke recently to A-Rod and considered investing in the team said.
A-Rod’s ace in the hole was private equity firm The Carlyle Group. But, it took months for the NBA to approval Carlyle and ultimately it approved Carlyle in the last few days.
Still, A-Rod without Carlyle had a back-up plan and raised the money but the whole process was delayed.
