May 27, 2024

Brighton Journal

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The Timberwolves' messy ownership battle threatens to overshadow a successful season

The Timberwolves' messy ownership battle threatens to overshadow a successful season

The Minnesota Timberwolves' final two home games of the regular season should bring nothing but a festive atmosphere.

The Wolves still have an outside chance of being the No. 1 seed team in the Western Conference, will host Game 1 of a first-round playoff series for the first time in 20 years and will have All-Star Karl-Anthony Towns back. On the ground sooner than initially expected.

The players are fully occupied with the task at hand and the goal of advancing past the first round in the playoffs for only the second time in their 35-year history.

The rest of their organization was dealing with the turmoil while the planned ownership transfer from Glenn Taylor to Marc Lore and Alex Rodriguez caught fire, leading to a spectacular public battle between the two sides that caught fans and team employees caught off guard. in the middle.

All of that is expected to be public on Friday night when Loer and Rodriguez are expected to attend the game against the Atlanta Hawks, team sources said. The athlete. This will be the first time they have returned to the scene since the conflict began on March 28.

The heated claims have gone back and forth and gone on record. This week, comments from NBA Commissioner Adam Silver and a pair of source Reports The Timberwolves (55-25) keep the issue at bay as the Timberwolves (55-25) chase the No. 1 seed in the West.

Silver said the league would stay out of the fight, viewing the matter as a dispute between buyer and seller, which, under the purchase agreement, would move to mediation and arbitration to resolve. But he added some clarity to the situation when asked about Lore and Rodriguez saying the only reason they didn't shut down at the end of March was because they were waiting for league approval.

“What is specifically at issue is whether they acted within the option window that Glen Taylor sold to them,” Silver said at a Board of Governors meeting in New York this week. “This is the basis of the dispute. Therefore, this dispute will be resolved independently of the association office.”

Taylor claims that Lore and Rodriguez did not have the money on time and that they missed several criteria in the agreement before the March 27 deadline, causing their option to buy the final 40 percent to expire. The contract calls for a 90-day extension “if all required NBA or other approvals from any governmental entity have not yet been obtained,” but Taylor's point is that this does not apply because the option has expired.

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“If they had had the money on the 27th, the whole deal could have been completed, and they could have been in control,” Taylor said. The athlete On March 28, the day the sale was announced. “But they didn't.”

Documents reviewed by The athlete It shows that Lore and Rodriguez actually sent signed financial commitment letters to the NBA on March 20. The documents cover more than $600 million needed to buy the final 40 percent of the Timberwolves and Lynx, which would have transitioned them from limited partners to controlling owners. As part of a three-step, $1.5 billion purchase agreement, Lore and Rodriguez have already purchased parcels in 2021 and '23, bringing them to 36 percent ownership.

However, proof of funds does not constitute full repayment, and the circumstances surrounding the most recent capital raising may play a role in the arguments moving forward.

At least part of their money for the final piece came fairly late in the process when Lore and Rodriguez had to pivot quickly after The Carlyle Group couldn't comply with NBA guidelines for buyout engagement.

Lore and Rodriguez had been working for several months with Carlyle as a key part of their plans, but Carlyle had to withdraw from the study due to some potential conflicts of interest in the investment world. With Carlyle out, they moved to secure Dial Capitalthat was It has already been approved by the NBAto help bridge the gap.

As Silver said, this is the crux of the dispute. Rodriguez and Lore said last week that because they filed financial statements a week before the closing date, they were eligible for a 90-day extension to go through the league's approval process.

The contract calls for them to close the entire deal by March 27, not just provide proof of funds, Taylor said. When that date came and went, no money was transferred and no league approvals were made, so he believed he was allowed to move forward as general partner.

“The league never got their approval because they didn't get their stuff in time,” Taylor said in March.

“We were prepared to close on March 27,” Rodriguez said. The athlete On March 29th. “The NBA wasn’t ready.”

Even when things got ugly, Silver resisted getting in the middle of it.

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“In their purchase agreement, they had previously agreed to a dispute resolution mechanism that would include mediation and arbitration, and that is the current situation,” Silver said. “The league has no role in this process.”

Two other related items were reported this week, starting with ESPN's report on Wednesday that Loer and Rodriguez provided financial projections that called for the Timberwolves to stay below the luxury tax line next season. This meant they had to dismantle the core of the team to avoid heavy financial penalties. Expectations of cost-cutting “were among the concerns that led Taylor to cancel” the deal, the report said.

As a technical point: Taylor's feelings about Lauer and Rodriguez's spending habits do not give him legal grounds to terminate the contract, nor has he claimed that to be the case. He said last month that it was all due to a contract they failed to fulfill. He did not publicly express concerns about their ability to pay the tax at the time.

The athlete He confirmed that those predictions were made by Lore and Rodriguez. It is not binding. Lore said in March that he was flush with money and would not hesitate to spend it to bypass the luxury tax and keep the core of the successful team together.

“I have hundreds of millions of dollars of liquid capital sitting in the bank, ready to invest if necessary,” he said at the time.

Thursday, The athlete's Tim Connelly, the president of basketball operations who played a big role in the Wolves' rise to contention this season, has opted out of his contract this summer, Shams Charania reports.

Lore and Rodriguez drafted Connelly away from Denver two years ago, offering him a lucrative five-year contract. Taylor gave Lore and Rodriguez his blessing to go out and find an executive they wanted so the ownership transfer would be smooth, and he gave his final approval for the hefty compensation.

Given the strings Connelly pulled to help the Wolves get where they are, the odds of him becoming a free agent this summer loom large in the future of the franchise. Whoever makes the decisions this summer will have to make sure Connelly stays in Minnesota.

This means Connelly could continue on his current deal for the remaining three years, opt out and become a free agent or opt out and negotiate a new deal to remain in Minnesota.

The public nature of this fight is dampening the organization's mood in a season everyone has been waiting two decades to enjoy.

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On the court, the Timberwolves don't look like the error-prone teams that have littered their history since reaching the Western Conference Finals in 2004. They have a potential face of the league in Anthony Edwards, a renewed candidate for NBA Defensive Player of the Year in Rudy Gobert, and perhaps the most stable and accomplished pair One of the leaders they ever had in Connelly and coach Chris Finch and they sold out. Home game this season.

Off the field, the Timberwolves look very familiar right now. Dysfunctional, chaotic and full of drama, an episode of “Game of Thrones” threatens to distract one of the best teams of all time. It started with Taylor's public comments questioning Lauer and Rodriguez's level of involvement in the series, escalated when Lauer and Rodriguez fired back and continued this week with various reports of the tentacles of the situation.

This battle will not be won in the court of public opinion. It will be won in the quiet conference rooms of mediation and/or arbitration. Until that happens, the constant back and forth is a bad look for the organization at such an important time in its history.

While Silver tries to stay out of the fray, he says the saga has taught the league what not to do.

“I guess we'll wait and see how it goes. But it's certainly not ideal to do a tiered deal like this,” Silver said. “It's within our rules, from that standpoint, and that's what Glenn Taylor wanted and that's what they were willing to agree to in that the time. But I think once the dust settles on this deal, it may cause us to reevaluate what kind of transactions we should allow.

The team has the potential to play in June if all goes well. It is possible that the conflict over ownership will continue for a longer period.

(Photo by Alex Rodriguez and Anthony Edwards: David Berding/Getty Images)