After Mark Walter sold the Los Angeles Lakers after barely owning them for a year, Golden State Warriors owner Joe Lacob expressed surprise, declaring on a podcast, “This isn’t flipping a house!”
But after Minnesota Timberwolves co-owner Marc Lore sold his stake in the team Friday one year after assuming majority ownership, it does appear that private equity firms are treating NBA teams like “flippable” assets.
Minnesota Timberwolves and Los Angeles Lakers both changed hands quickly
The situations of the two recent NBA team sales are slightly different. New Timberwolves owner Marc Stad previously owned a smaller stake in the team and will effectively change places with Lore, who will retain a smaller share in the team. Wolves co-chairman Alex Rodriguez, the less wealthy member of the Lore-Rodriguez duo, will remain in place as the public-facing owner.
The Lakers sale appears to have been prompted by Walter facing federal investigations of investments made by his insurance companies. He’s also selling his share of Chelsea FC. Walter’s companies need to remove or restructure $20B of their outside investments by the end of the year, so selling his portion of the Lakers will go a long way towards that goal.
In both cases, the sellers made massive profits. Walter bought a controlling interest in the team last year at a $10B valuation, and sold at a valuation of $12.5B. Lore and Rodriguez agreed to buy the Wolves at a $1.5B valuation in 2021, and Lore sold with the team valued at three times that number — an incredibly return over five years, especially since he was able to buy the team in $300M installments.