Michael Jordan has chosen to sell a considerable piece of equity in the Hornets to two hedge-fund executives from New York; Gabe Plotkin and Daniel Sundheim. It’s yet known the share they are buying or the price, but Jordan isn’t giving up the franchise control.
So, why is Jordan selling part of Charlotte Hornet at this time? Jordan estimated net worth is $1.9 billion; thus, he is unlikely to be running short of cash.
It’s nearly a decade since Jordan acquired most of Hornet from Bob Johnson. At the time he bought the then Bobcats, they were losing money annually. A shortage of cash forced Jordan to kick in additional funds at the expense of minor investors. This continued raising Jordan to manage partner. He kept growing equity controls and a source familiar estimates him to control about 97% of the franchise. Due to NBA revenue sharing, Hornet started turning a profit.
Last season, national NBA television ratings weren’t high. Thus it’s a bad idea to assume that franchise values will continue growing as they have in the previous decade.
A source close to Jordan said that he doesn’t plan to sell the control of the franchise. Hornet hasn’t won even a first round of playoff series while under Jordan control, he is unlikely to walk away from the team.
Jordan also said that he would continue making all decisions related to the team and organization. So the new deal will change nothing in the organization operation.
The partial sale of the franchise matters to Jordan because it will bring in more cash and smart guys with smart ideas into the ownership group. Most of the minor shareholders in Hornet predate Jordan. But in a world rapidly changing, there is a need to view games and sports in a sense that tap into people and probably make a fortune in the emerging trends.