The Phoenix Suns, which are owned by Robert Sarver, will be sold for at least $2.5 billion.
The Phoenix Suns are about to lose a lot of money because of Robert Sarver.
The NBA suspended Sarver for a year and fined him $10 million last week after an investigation found that he had acted in a racist and misogynistic way at work, which was against the rules.
Sarver, who owns 35% of the Suns, said today that he wants to sell the team, which he bought for $401 million in 2004. Suns will likely sell for at least $2.5 billion. A year ago, Forbes said the Suns were worth $1.8 billion, making them the 18th most valuable team in the league.
A price of $2.5 billion might seem too high, since it is about eight times what the company will make in 2021-22. It would be the second-highest sale price in NBA history, after Joe Tsai's purchase of the Brooklyn Nets for $3.2 billion in 2019. But think about this: In a sale of a minority stake last month, the Utah Jazz were valued at $2.4 billion, which is nine times their income.
The Jazz do own Vivint Arena, but the city of Phoenix owns the Footprint Center, which is where the Suns play. But the Suns own the master lease to their recently remodeled arena, so they have control over the money. Also, there are 5 million people in the Phoenix metro market, but only 1.2 million in the Salt Lake City metro market.
Private-equity firm Dyal HomeCourt Partners, which bought less than 5% of the Suns in July 2021, will also benefit from the sale. The deal gave the team a value of $1.55 billion for a minority discount and about $1.8 billion for a controlling interest. Even though it was announced in July 2021, the $1.55 billion minority-interest deal between Dyal and the Suns was priced back before the end of 2020.