As Timberwolves battle for NBA crown, off-court dispute simmers over team's ownership

Minnesota billionaire Glen Taylor on Wednesday sat in his usual seats at Target Center: next to the Timberwolves bench.

Baseball star-turned-investor Alex Rodriguez and billionaire tech entrepreneur Marc Lore sat on the opposite side of the court.

The three men, all with ownership stakes in the team, may be unified in their support of the Minnesota Timberwolves, making only its second-ever appearance in the NBA's Western Conference Finals, but their business relationship has turned sour.

The simmering feud — with majority owner Taylor on one side and Rodriquez and Lore on the other — is the result of a failed $1.5 billion deal, one of the most unusual major league sport deals in recent history.

As the Wolves try to reach the NBA Finals for the first time in the franchise's 35-year history, the two ownership camps will soon meet, at an undisclosed office in Minneapolis, for forced arbitration.

Lore said they would fight "with all means possible" to close the deal that would give them controlling interest of the teams. Since the deal was penned in 2021, the teams' collective value has risen 87% from $1.57 billion to $2.9 billion.

At stake is not only millions of dollars in potential monetary damages, but controlling ownership of one of the league's most promising young teams.

How it started

83-year-old Glen Taylor has owned the Wolves since 1994 when he bought the team for $94 million. He later took ownership of the Lynx, which has won four WNBA titles. Taylor, who also owns the Star Tribune, began entertaining offers in 2020. Several suitors emerged and failed to produce a deal, including with former Grizzlies minority owner Daniel Straus and a group led by former NBA players Arron Afflalo and Kevin Garnett.

By April of 2021, he had found his buyer, agreeing to sell the Timberwolves and Lynx for $1.5 billion to Lore's and Rodriguez's joint company, Purple Buyer Holdings. Taylor previously said the sale came together over the course of a few days. His wife, Becky Mulvihill, made everyone hamburgers and banana cream pie as they discussed the deal in person at the Taylors' Florida home, the Star Tribune reported.

A few months later in July, the NBA's Board of Governors approved the pair's first acquisition for 20% of the teams.

Lore and Rodriguez had previously tried to buy the New York Mets for $1.7 billion in 2020, but lost out to billionaire hedge fund manager Steven Cohen.

As a guest on a recent episode of a Bloomberg podcast co-hosted by Rodriguez, Lore said it was "the underdog" story in Minnesota that drew them to the team.

Rodriguez said Taylor did all of the negotiating and set the terms and price. Taylor previously has said it was Rodriquez's and Lore's idea that he remain controlling owner, initially through 2023.

"They said, 'We got to learn about basketball. We'd like you to stay around and help us run it for a while.' Then we'll switch over," Taylor said.

The deal itself, with payments to be made in installments over time, experts say, was strange to begin with.

NBA Commissioner Adam Silver in April said, given how the transaction has played out over multiple years, the league might re-examine whether it will approve such a structure in future deals.

"It's certainly not ideal to have a stepped transaction like this," Silver said. "I mean, it met our rules from that standpoint. And it's what Glen Taylor wanted and it's what they were willing to agree to at the time. But I think once the dust clears on this deal, it may cause us to reassess what sort of transactions we should allow."

Deal Structure

Most sports deals — especially when a party is buying control of a team — are completed as quickly as 60 days, but not longer than six months, said a investment banker at a high-level firm serving the professional sports industry, who asked not to be named. While a buyer may put down a deposit, which would be lost if the buying party misses a key deadline, the funds are typically transferred all at once, with the buyer wiring the seller money after receiving league approval.

He said the Timberwolves and Lynx deal "was unusual."

There are a few reasons why a buyer would agree to purchasing a team in installments, he said. First, they might need time to raise money. Second, they need to learn more about the business before taking over, which apparently was the case with Lore and Rodriguez. The seller might choose installments becauseeach payment could be of higher value than the last. Or they still might have an attachment to the team and don't want an abrupt breakup. Finally, it could be an opportunity to defer one's taxes.

For Taylor, the banker said, it could have been as simple as valuing the relationship and seeing potential with the younger investors, who sought to "breathe new life into the businesses side of the team." Taylor previously said another suitor offered to buy the team for $2.5 billion.

During this time between installments, Lore and Rodriquez were often seen with Taylor after games, shaking hands or hugging at midcourt.

"You might sell it to the nice guy for a little bit less because you like him and you want the community to think that you sold it to good people," the banker said.

Where it fell apart

Lore and Rodriguez were expected to make their third and final installment to Taylor for the teams by March 27, upping their ownership share from 40% to 80% in both franchises. A week prior, though, investment firm Carlyle Group decided not to move forward in a deal that would have provided structural financing to the duo, aiding the next payment.

Questions surfaced as to whether they could finalize the deal. Lore and Rodriguez said they submitted paperwork to become controlling owners to the league on March 21.

The day after the March 27 deadline, Taylor released a statement to the press saying the acquisition option had expired and the team was no longer for sale.

Lore and Rodriguez expressed shock. They told the Star Tribune they had secured the necessary funding for the deal and because they submitted the paperwork to the NBA on time, their payment deadline to Taylor could be extended 90 days if the sides are just awaiting league approval .

Taylor contends Lore and Rodriguez didn't fulfill necessary, contractual steps on time and that gave cause to terminate that part of the deal.

ESPN reported Taylor nixed the deal because he was concerned about Lore and Rodriguez's ability to sustain the franchise's success. According to the report, Rodriguez and Lore submitted a budget projection for next season at $171 million, below the luxury tax line, which the Wolves will have to exceed to keep this season's roster largely intact for another run.

A mediation hearing on May 1 failed to resolve the dispute, automatically moving the issue to arbitration, a binding procedure for settling private disputes to avoid going to court.

Impact on the team

In the emotional aftermath of beating the defending champion Denver Nuggets in Game 7 on Sunday, the national broadcast caught Wolves star Anthony Edwards performing a special handshake-and-hug with Rodriquez, who had flown to the Mile High City to sit courtside.

After announcing the team was no longer for sale, Taylor's counsel informed Lore and Rodriguez they could no longer have access certain team facilities or communicate with players and staff. Yet a camaraderie remains.

During media access this week, players and coaches deflected questions about the ownership squabble.

"I have a great relationship with all ownership parties," Timberwolves coach Chris Finch said. "It's been, you know, not even been on my mind at all."

"The most important thing for me right now is to focus on making sure that we try to accomplish our goal and then, you know, we'll see what happens," said Rudy Gobert, the team's starting center, who joined the team in 2022.

Were the players concerned about which side might own the team at the end of the season? "Not at all. Not at all," Conley said.

What's next?

The soured deal could end with Lore and Rodriguez selling their shares of the teams, if they can't gain a controlling stake, the banker said. Not only is there incentive to sell those non-controlling shares, as they are "now worth more than they paid for it because NBA team values have gone crazy," but owning a minority stake is less attractive.

"It may be a great investment, but they're not making decisions," he said.

A date for the arbitration hearing to begin has not been disclosed, though it must happen in Minneapolis and be completed within six months.

The winner of arbitration could seek compensatory damages. For Rodriquez and Lore, that amount cannot exceed what they've already paid, which is about $600 million. For Taylor, the amount of damages he could seek could possibly be much greater,

said Twin Cities attorney Marshall Tanick.

"It's business," Taylor told Star Tribune columnist Patrick Reusse after he voided the sale. "Everyone has the right to bring in the lawyers."

As the team claws its way through the Western Conference Finals — and lawyers prepare for a closed-door legal battle — both sides of the dispute hope to be there for the franchise's first NBA Championship.