Alex Rodriguez stares at ‘financial jail’ as Timberwolves saga prolongs
- May 22, 2024
- 9:02 am
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Follow UsThe feud over the ownership of the Timberwolves is pushing Yankees legend Alex Rodriguez into a big financial problem. He and his partner Marc Lore are locked in a dispute with majority owner Glen Taylor following the failure of a seamless transition of power within the NBA franchise.
According to a report by Sportico, the ownership dispute is expected to be resolved through court arbitration in the coming months after mediation attempts proved unsuccessful. The outcome of this legal battle is likely to come with a hefty financial burden for Alex Rodriguez and Lore, surpassing their initial expectations to bankroll the squad.
ESPN’s Zach Lowe, on his podcast “The Lowe Post,” warned that regardless of who emerges victorious in this ownership fight, they will find themselves in “financial jail.” Lowe emphasized that the Timberwolves’ current success leaves the new owners with no choice but to keep the team together, despite the substantial luxury tax implications.
In April, ESPN’s Adrian Wojnarowski reported that Alex Rodriguez and Lore had plans to reduce the team’s payroll to $171 million starting next season, which falls below the $172 million luxury tax threshold. This move would allow the team to receive a tax distribution instead of paying a tax payment.
The Minnesota Timberwolves are projected to have the fourth-highest payroll in the NBA for the 2024-25 season at $198 million, including contracts for three maximum-salary players. Analysts suggest that it would be challenging for an Alex Rodriguez-led team to significantly reduce its roster expenses without trading away key players.
Alex Rodriguez faces a tough ownership battle
In 2021, e-commerce entrepreneur Marc Lore and former Major League Baseball star Alex Rodriguez reached an agreement with Taylor to purchase the Timberwolves and the Minnesota Lynx WNBA franchise for $1.5 billion. Taylor, who acquired the team in 1994 for $88 million, structured the deal in phases to serve as a mentor to the new owners as they familiarized themselves with the league, the organization, and the Twin Cities community. Lore and Alex Rodriguez currently own a combined 36% of the club.
The ownership dispute between current owner Glen Taylor and the prospective buyers, Alex Rodriguez and Marc Lore, took a new turn when the 82-year-old Taylor announced on March 28 that he was pulling out of the final stage of the unusually structured deal. Taylor claimed that Lore and Alex Rodriguez failed to meet the deadline for the last payment of approximately $600 million, which would have transferred an additional 40% stake in the club to them.
However, Lore and Alex Rodriguez strongly disagreed with Taylor’s assertion. They maintained that they had submitted the necessary paperwork by the March 27 deadline, entitling them to a 90-day extension per the contract, and were awaiting NBA approval. The pair accused Taylor of experiencing seller’s remorse due to the increased value of the Timberwolves since the agreement was made, reflecting the overall growth in NBA revenues.
Forbes reported that as of October 2023, the Timberwolves’ value had risen to $2.5 billion, a 50% increase from their 2022 valuation of $1.7 billion.
According to a report by The Athletic, Alex Rodriguez, Lore, and Taylor have agreed to prompt arbitration through a three-person panel in Minnesota, although the process of appointing judges and setting schedules will take some time. The resolution of the dispute hinges on a roughly 1,500-word section of the sales agreement that outlines the transaction’s terms and the steps to be taken in the event of an impasse.
Taylor, the current owner of the Minnesota Timberwolves, acknowledged his change of heart regarding the sale of the team last month. However, he attributed his decision to the positive atmosphere surrounding the organization during a 56-26 season, which was the second-best in franchise history.
Taylor expressed his enjoyment in running the team and his satisfaction with the coach and staff in an interview with the AP following his announcement. He stated that he didn’t need the money and would rather continue operating the team, allowing everyone to keep their jobs.
Alex Rodriguez ranks at the top among the richest ever Yankees players with a net worth exceeding $350 million.
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