Basketball legend Michael Jordan has agreed a deal to sell his majority stake in the Charlotte Hornets basketball team to hedge fund billionaire Gabe Plotkin and private equity titan Rick Schnall, the Hornets said Friday.
The sale, which is subject to approval by the National Basketball Association’s board of governors, values the team at roughly $3bn, according to two people familiar with the matter.
The sale is the latest sign of how professional sports team valuations are appreciating amid more lucrative media rights agreements and the influx of private capital investment at the minority shareholder level.
Joining Plotkin and Schnall in the new ownership group is the sports-focused investment fund Dyal HomeCourt Partners, a division of asset management firm Blue Owl, and rapper J Cole, a North Carolina native, among others.
Plotkin, a former top trader at SAC Capital, struck out in 2014 to create his own firm Melvin Capital, named after his late grandfather. The firm raised over $1bn and received backing from SAC’s owner Steven Cohen.
It raised billions of dollars more after its launch on the back of strong returns between 2014 and 2021.
Plotkin was caught out by the meme-stock craze that sent shares of companies such as AMC and GameStop surging in early 2021. His fund suffered multibillion-dollar losses and required an emergency $2.75bn investment from Ken Griffin’s Citadel and Cohen’s Point72.
Last year, after vowing to make his investors whole, Plotkin closed his hedge fund, returned capital and converted his investments to a family office.
Schnall, one of the top executives at Clayton, Dubilier & Rice, led the company’s investments in healthcare and growth investments. He was named co-president in 2020 as part of a succession plan.
Jordan, a six-time NBA champion with the Chicago Bulls, is widely considered one of the greatest players of all time. He bought the Hornets in 2010 for a reported $27mn, and will retain a minority interest in the team. However, that will leave the NBA without a black principal owner when diversity in sports front offices has been a point of criticism.
”I would love to have better representation in terms of principal governors,” Adam Silver, NBA commissioner, told reporters earlier this month amid rumours of a looming Hornets sale. “It’s a marketplace. It’s something that if we were expanding [by adding new teams] that the league would be in a position to focus directly on that, but in individual team transactions, the market takes us where we are”.
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