The Minnesota Mishap: Contracts and the NBA
In April of 2021, it was announced that the Minnesota Timberwolves and the Lynx were to be sold from then franchise owner Glen Taylor, who bought the team in 1994 for $94 million, to an ownership group led by former New York Yankee Alex Rodriguez and Minority owner Marc Lore for a total cost of $1.5 billion.[1] The deal was unique in structure, dubbed a tiered sale, as Lore and Rodriguez would purchase 20% of the team immediately, 20% in 2023, and 40% in early 2024.[2] The first two payments went off without a hitch, much to the pleasure of Taylor, who “had been looking for a partner who would come in as a minority owner, ride shotgun for a few years with Taylor and then take over as the general partner.”[3]
However, issues arose when weeks before the third tier was to be sold when the private equity firm Lore and Rodriguez were working with to buy the team had to withdraw.[4] Although the group quickly found a replacement firm, the damage had already been done.
Taylor claimed that by not completing the closing after the deadline had been missed, they had failed a condition of the contract, entitling Taylor to revoke the sale.[5] In contrast, Lore and Rodriguez pointed to the provision stating that the window “shall be automatically extended by an additional ninety days if all NBA Approvals or other required approvals of any Governmental Entity have not yet been obtained,” and arguing that since they were waiting on said NBA approval, the extension applied.[6] The issue, while seemingly complex, actually comes down to interpreting a single provision in the contract.[7]
The parties entered into arbitration, mandated by the contract, and was preferred by the parties due to its confidentiality and ability to pick expert judges in a 3-person panel in which each side could select one with one neutrally appointed arbitrator.[8] In the meantime the case has been ugly and public, including intrigue on the court when the separate ownership groups sat in opposing chairs courtside during the 2024 playoffs, leading to vast media coverage when Rodriguez hugged superstar Anthony Edwards while in attendance.[9] The result of this arbitration has finally come to fruition as of 2025. ESPN reported on April 2nd that, “Glen Taylor has agreed to the Marc Lore-Alex Rodriguez group acquiring 100% ownership of the Minnesota Timberwolves and Minnesota Lynx at the same $1.5 billion price the sides reached agreement on in 2021”.[10]
However, the fallout from this sale is large, with NBA commissioner Adam Silver stating that the league may re examine what financing deals will be allowed in the future.[11] This may already be seen in the Boston Celtics sale. While the deal by new owner Bill Chisholm appears similar to the disastrous Timberwolves sale, it has one critical difference.[12] The deal is a tiered transaction where former Celtics owners the Grousbeck family would remain on board as CEO and governor for the next three seasons, however, critically different is that Chisholm will take control of 51% of the franchise immediately.[13] Although some of the details of the deal are still emerging, this percentage likely gives him true control over decisions made despite the title given a member of the Grousbeck family. [14] This decision may reflect NBA decision making in the future, allowing tiered transactions lead by private equity firms, since the ever-growing prices of NBA franchises (Boston sold for $6.05 Billion) makes it difficult for individuals to purchase teams all at once, while requiring a majority stake to be turned over to avoid a repeat of the unfortunate Minnesota sale. [15]
Footnotes
