The sale of the Phoenix Suns of the NBA was announced Tuesday. The deal marked the largest deal in league history with the NBA team and WNBA’s Phoenix Mercury valued at $4 billion.
Here’s a look at the sale and the potential new NBA rivalry it could be creating.
What Happened: The Suns will now be majority-owned by Mat Ishbia and his brother Justin Ishbia with them acquiring more than 50% ownership of the team from current owner Robert Sarver. Mat Ishbia is the CEO and chairman of UWM Holdings Corp UWMC, a mortgage company that went public in January 2021.
The $4 billion valuation of the Suns marked the largest in NBA history, surpassing the $4.4 billion valuation of the Brooklyn Nets in 2019.
“Mat is the right leader to build on franchise legacies of winning and community support and shepherd the Suns and Mercury into the next era,” Sarver said. “As a former collegiate basketball player and national champion, Mat has exactly the right spirit, commitment and resources to pursue championships.”
The acquisition was pending league approval and had no completion date. While the Ishbias will own a majority stake, other owners will also stay on, which could include Dyal Capital Partners, a unit of Blue Owl Capital Inc OWL, which acquired a minority stake in 2021.
Ishbia called it a dream come true and shared more about his basketball and mortgage experience.
“Basketball is at the core of my life, from my high school days as a player to the honor of playing for Coach Izzo and winning a national title at Michigan State University," Isbhia said.
"I’ve spent the last two decades building my mortgage business, United Wholesale Mortgage, into the number one mortgage lender in America and I’m confident that we can bring that same level of success to these great organizations on and off the floor.”
The acquisition ends the search for a suitor of the team after allegations of misogyny and racism circulated around Sarver.
News of a potential Suns sale saw interested parties including former President Barack Obama, Amazon.com, Inc. AMZN founder Jeff Bezos, Oracle Corporation ORCL founder Larry Ellison and Walt Disney Co DIS all rumored to be interested.
Related Link: United Wholesale Mortgage CEO Talks IPO Plans, Lending Technology And Brokers
A New NBA Rivalry Could Emerge: One of the huge storylines of Ishbia becoming an NBA team owner will be him now going head-to-head with his mortgage rival Dan Gilbert on the hardwood.
Gilbert has owned the NBA’s Cleveland Cavaliers since March 2005 and is the owner of Rocket Companies Inc RKT, a mortgage company that went public in August 2020, one month before United Wholesale announced a SPAC deal to go public.
As shared by Joe Pompliano, Gilbert and Ishbia are both alumni of Michigan State University but have a huge business rivalry. Ishbia donated $32 million to the athletic department of MSU. One month later, Gilbert announced a five-year deal to have Rocket Mortgage as the sponsor of MSU’s basketball team.
United Wholesale Mortgage announced in 2021 that it would no longer do business with mortgage brokers who worked with Rocket Mortgage, taking a rivalry between the two companies to a whole new level and leading to some lawsuits.
Ishbia spoke out publicly after Rocket Mortgage announced a series of voluntary buyouts.
“Disappointed is the nicest way to describe my thoughts around Rocket Mortgage/Quicken Loans laying off over 2,000 of their people, as this should not be necessary for a company that made over $5 billion last year in profits,” Ishbia wrote on LinkedIn.
The UWM Holdings CEO said that his company nearly doubled its workforce since the start of the COVID-19 pandemic and would never layoff employees.
The rivalry between Gilbert and Ishbia could now spill into the NBA. It should be reasonable to expect the two teams not to be trading partners or helping each other out.
It will also be interesting to see how the Suns and Ishbia will feel about playing against the Cavaliers at the Rocket Mortgage Fieldhouse, a stadium that has the name of his rival’s company.
Could this potentially turn into when Michigan and Ohio State play each other in college sports and Ohio State blocks out the M on all materials ahead of the matchup due to the rivalry? Could the Suns state it is playing at the Fieldhouse and not mention the name Rocket Mortgage?
The Suns play in the Western Conference and the Cavaliers in the Eastern Conference and only play each other twice in the 2022-2023 season. While it won’t be a huge rivalry in the number of games played each year or a place in the divisional standings, the rivalry could be more important for the owners and bragging rights than the players on the court.
Read Next: You Can Buy These 10 Public Sports Teams And League
Photo: Alex Kravtsov via Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
