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Michael Jordan is already a billionaire, but he pocketed several billions more in the sale of the Charlotte Hornets. The deal was finalized Thursday. Although his 13-year tenure as majority owner didn’t result in a championship or much success, he was the sole Black majority owner in the four major sports.
Jordan’s investment in the Hornets paid off from a strictly business perspective. He bought the team for $275M in 2010, now valued at $3B. Jordan will retain a minority interest. The team’s new owners are a group led by Rick Schnall and Gabe Plotkin. Plotkin upgrades his stake as a minority owner, and Schnall, who held a minority stake in the Atlanta Hawks, will serve as co-chairmen of HSE in a deal approved almost unanimously by the NBA’s board of governors last month.
“We want to thank Michael for this opportunity, as well as his support throughout this process,” Plotkin and Schnall said in a statement. “During his ownership, he brought stability to the Hornets franchise, achieved many business milestones, reconnected and reinvested in the Charlotte community and has the organization positioned for greater success. We look forward to building upon this success in the years to come.”
The new owners say they plan to take the team to the “next level” by upgrading the facility and fan experience.
But their real upgrade will need to be the team, which has struggled for relevancy in the Jordan years. The Hornets finished last season 27-55, losing 28 games at home despite the presence of the 2021 Rookie of the Year, Lamelo Ball.
North Carolina natives J. Cole and country singer Eric Church are among the minority owners of the team.
“I’m thrilled to be able to pass the reins to two successful, innovative and strategic leaders in Gabe and Rick,” Jordan said in a statement issued Thursday. “I know the Hornets organization is in great hands moving forward. I’m excited about the future of the team and will continue to support the organization and the community in my new role in the years ahead.”
Jordan explained that he’s got his eyes set on some new challenges, which is part of the reason he’s selling the team.
“Although my love for the game of basketball and the NBA remain strong, now is the right time for me to hand over the reins and focus on my family, my personal interests and some new challenges,” said Jordan.
Jordan’s profit is the sport’s world loss. Despite some attempts by ownership groups that have included Magic Johnson, Bryon Allen, and other prominent Black celebrities, sports teams are expensive purchases with billion-dollar-plus price tags.
The Phoenix Suns and Mercury were sold to Max Ishbia for $4B in February and the Washington Commanders were sold to a group led by Josh Harris last month for $6B, an NFL record. Jordan purchased the Hornets from BET founder Robert Johnson who became the first Black man to own a major sports team after paying the Hornets’ $300M expansion fee in 2002.
Even for billionaires, owning a sports team is not easy. Barriers to purchasing an NFL team, for example, are stringent financial requirements and a clause that 75% of the current owners must approve the sale.
“Whoever is proposing to be the majority owner of the team must personally, individually as a human being, own 30% of the equity,” Jodi Balsam, a Brooklyn Law School and New York University professor who was an NFL attorney for more than a decade told The Guardian UK. “So if you have a team worth $6B, 30% of the equity is roughly $2B. You need to have an individual owner who could come up with $2B liquid who can be part of that owner’s group.”
Robert Smith, worth $8B, is the richest Black man in America and Nigerian cement magnate Aliko Dangote is the richest Black man in the world, worth more than $12B. As rich as they are, their pockets pale in comparison to Elon Musk, the world’s richest man at $219B. While Smith was rumored to be interested in the Denver Broncos when they were for sale and he and Dangote could potentially form ownership groups to buy a team, it hasn’t happened yet.
Several African Americans are minority stakeholders in sports teams including Serena Williams, Dwyane Wade and Grant Hill. Financial guru Mellody Hobson and former Secretary of State Condoleeza Rice are part of the Denver Broncos ownership group led by the Walton family. Former WNBA player Renee Montgomery is part owner of the WNBA franchise the Atlanta Dream, whose $15-$67M valuation is much less than that of a major sports league team.
Robert Johnson’s ex-wife, Sheila Johnson, owns a principal stake in the Washington Wizards, Capitals and Mystics, the only Black woman to have one. But principal does not mean majority.
Ice Cube’s twelve-team Big 3 basketball league is the only prominent sports league majority-owned by an African American.
“Historically the wealth in this country belongs to white males,” sports attorney Richard Roth told Money.com in 2018. “It’s the same reason most Fortune 500 companies, most law firms, etc. are owned by white males.”
He added, “I do believe you’ll see more [people of color] break that glass ceiling. It just takes a little longer because of the size of the money.”
See how Twitter’s reacting to the sale below.
