6:15pm: Sarver has issued a statement, confirming that an agreement has been reached between him and brothers Mat and Justin Ishbia regarding the purchase of the majority stake in the Suns and WNBA’s Mercury, Charania tweets. The agreement values the Suns and Mercury at $4 billion.
The deal involves more than 50% ownership of the team, including all of Sarver’s interest, and a portion of the interest of minority partners. Mat Ishbia will serve as governor, while Justin Ishbia will serve as alternate governor, pending league approval.
12;05pm: Mat Ishbia, a billionaire mortgage lender, is finalizing a deal to buy the Suns, reports ESPN’s Adrian Wojnarowski. Ishbia will pay about $4 billion, according to Wojnarowski, which would be a record price for an NBA team. The WNBA’s Phoenix Mercury will also be part of the deal, Woj adds.
Ishbia is chairman and CEO of United Wholesale Mortgage, which is based in Michigan, and he has a net worth of $5.1 billion, per Forbes. He played college basketball at Michigan State from 1999 to 2002 and won a national championship in 2000. He was part of a group that tried to buy the NFL’s Denver Broncos earlier this year, according to Mike Florio of NBC Sports.
Mat’s brother, Justin Ishiba, will be “a significant investor” as well and will serve as an alternate governor for the team, sources tell Shams Charania of The Athletic (Twitter link).
Current Suns owner Robert Sarver decided to sell the team in September following a lengthy investigation into workplace conditions. The NBA suspended Sarver for a year and fined him $10MM for behavior that “clearly violated common workplace standards.”
The law firm of Wachtell, Lipton, Rosen & Katz, which conducted the investigation, determined that Sarver had used racially insensitive language in the workplace, made inappropriate comments about female employees and treated workers in general in a “demeaning and harsh” manner.
In a statement issued when he decided to sell the Suns, Sarver said he “deeply” regrets the comments he made to employees and vowed to “work on becoming a better person.” He also expressed disappointment at not being able to return to running the team and “make amends” for his behavior.
Sarver purchased the Suns in 2004 for $401MM, so he will realize a huge profit from the sale. The current record price for an NBA team is $2.35 billion, which Joe Tsai paid for the Nets in 2019. As Wojnarowski notes, the Lakers sold a minority share based on a $5 billion valuation, but that deal only involved a small portion of the team’s ownership changing hands.
Although Sarver only owned about one-third of the Suns’ shares, he has the authority to sell the team in full as its managing partner, sources tell ESPN. Mat Ishbia will have to undergo a background check and his purchase of the franchise will be subject to a vote by the NBA’s Board of Governors, but that’s expected to be a formality, per Wojnarowski.
Luke Adams contributed to this story.
27 thoughts on “Sarver Reaches Agreement For Sale Of Suns, Mercury”
He’s so rich, he’s buying the sun, too.
From a purely financial standpoint that is a really bad deal.
These billionaires know a thing or two. They can almost see the future. Yes this is double what Balmer paid for the Clippers and that was astronomical at the time. Does this mean inflation? Does this mean inflation is not ending anytime soon?
We’ll see but inflation kind of comes and goes, Ebbs and flows. With the FED doing what it does to try to stop inflation it could be 25 years before the suns are worth 10 billion. But if you’re a billionaire where else do you put your money?
I don’t think so. I thought cash was King but now I’m not so sure. Perhaps assets are king?
This bodes well for the stock market if you think of it this way. Like I said, these gazillionaires know a thing or two. This almost says it’s safe to invest in assets for the long term right now.
being that there were other investors in the team, do they split the $4b among the investors or does sarver get everything
Apparently you don’t understand how investing works.
Which is why he’s asking the question. Do you have an answer or just snark?
Sarver is selling his portion. Whatever that is I think 50%? Plus I think a couple of minority investors sold their piece as well so these brothers get perhaps 55 or 60% of the team?
Replying to myself but I guess I didn’t give a complete answer.
The Suns would be worth 4 billion dollars and if Sarver sells 50% which is his total current ownership share, he would pocket 2 billion dollars.
The other minority owners total the other 50% or whatever it actually is, and their asset value is 2 billion dollars. They would stay on board and keep their ownership shares. Only Sarver is selling.
I hope that helps and I hope I’m right lol.
Think even if I had billions in the bank I wouldn’t be that interested in buying a team for this much.
Sarver brought the team for like 400mil in the early 2000’s and will now sell for 4bil.
But I can’t see this team being worth 100bil or something crazy like that in another 20 years.
Team can easily pass 10 mil in value over the next decade. I think the Mercury being included in the deal really helped. Especially after the Griner situation, the NBA is going to commit a lot of money over the next 10 years to get the WBNA really rolling. 4 bil for a potential perineal finals team is a fair deal
Washingtonbonercats you’re on the right track but prices have escalated to an incredible degree these last 2 years and will slow down considerably.
Well I take that back in addition to this 2-year incredible run up in prices, we’ve had an 11-year run in asset value increase.
But, even with that in mind, I think it will take 20 years + to reach 10 billion dollar value. Inflation is Ebb and flow, in fact the FED is trying to slow down inflation right now. But nonetheless, a great investment for the long term, at least according to these gazillionaires..
Sarver turned out to be a real creep, but for the league to pretty much run him off despite him not breaking any laws is heavy-handed. Michigan fans don’t like Sparty, or want anything to do with their alumni so this Ishiba character is already off on the wrong foot for me. BTW, has Colangelo ever explained what happened to Johnny High? I always thought that looked like a professional hit.
He sold the team on his own accord. Be that to avoid further controversy, or otherwise, is beside the point. He chose to sell. Btw if you think Sarvers a creep, might want to do some digging in Boston. If the coach is balls deep in adultery (literally) I can only imagine what ownership is doing.
Sports franchises always sell for prices that could never be supported by any valuation model, except for the greater fool theory of value. Then again, the same could said for the common stock of many publicly traded companies.
The good news for the Suns buyer here is that the greater fool theory has stood the test of time for sports franchises. In my lifetime, I can remember only a few occasions when a franchise wasn’t sold for significantly more than its was purchased, even when the purchase and sale were relatively close in time.
FWIW, by almost any standard valuation method, the Suns are a better investment today at this price, than either (1) the Suns were when Sarver bought the team in 2004 at 400 mm, or (2) the Nets when Tsai purchased them at 2.3 billion.
DXC, brother I’ve known you a while.. may I ask what type of business you are in?
I’m retired real estate investor. I like your interesting opinions and I’m just curious.
I’m going to disagree here with the greater fool Theory because the market dictates the price because of supply and demand. Individuals and groups are lined up to buy professional franchises and you almost have to apply to purchase.
Like a heated real estate market, low Supply/ heavy demand.., prices rise. I commented above some of my thoughts on this Suns sale but genuinely curious what your business background is if you care to tell. Thank you brother.
@Gary – My background is in real estate as well, at various times law, finance and development.
Yes, the price of a sport franchise is going to be determined by the market, and the interplay supply and demand. But before a market materializes and determines what the price is, there needs to be participants that come to it with their own opinions of what the price should be, usually based on one or more valuation models (some objective, some subjective, but in a business context most are tied to inherent value measures such as NOI/NCF).
The Greater Fool Theory isn’t a pejorative. It just refers to the lack of much inherent value (yield / usefulness) to the owner. Meaning the value of the asset is based on the assumptions that there will always be a purchaser willing to buy it from the owner, and that the purchaser will always be willing to pay more than the owner paid for it.
Purchasing a home in the residential real estate market is different because the purchaser can find subjective value in living there himself, and thus realize value from the home despite collecting no income from the property forever and also being unable to sell for what he paid for it forever.
Thank you for this explanation. Had to read it three times lol.. first time was early this morning and I couldn’t quite get it so I put it away for a couple hours till I woke up.
Oh had to look up “pejorative” too, lol.
Thanks brother, always enjoy your posts. I think you provide a very level-headed, always reasonable, accurate opinion.
Lets be clear the Suns are worth $4.1B the “Mercury” are worth -$100m.
New Suns buyer…
“They’re PAYING US to take the Mercury.”
dudes worth only 5 bil. they’ll barely make payroll.
He is spending 2 billion, still has 3 billion left.
I guess we can trade Crowder now.
Leave DA right where he is.
Seems a little high for Suns. Even if it is with the Mercury. Still a good investment. NBA is still growing. And Suns are a contender right now. New owner actually played ball. That’s cool.