Glen Taylor bought the Minnesota Timberwolves in 1994, saving the team from a potential move to New Orleans.
He announced Tuesday that he is looking into a potential sale of the franchise, which has made just one playoff appearance since 2004, and has hired bankers to help identify bidders.
ESPN's NBA insiders Brian Windhorst, Bobby Marks and Tim Bontemps break down the situation and what comes next, including who is interested in buying the team, why this is happening and if the team could leave Minnesota.
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Who is interested in buying the team?
One group approached Taylor recently and offered him more than $1 billion for the franchise, sources said, but wouldn't agree to Taylor's terms that the team remain in Minnesota.
ESPN's Adam Schefter reported Tuesday that the Wilf family had emerged as a serious bidder. Zygi Wilf, brother Mark Wilf and cousin Leonard Wilf have owned the Minnesota Vikings since 2005 and have a share of MLS team Nashville SC. The family, which made its fortune in real estate, is believed to have a net worth of more than $5 billion.
Wolves minority owner Meyer Orbach is also preparing a bid, multiple sources told ESPN. Orbach, a New Jersey-based real estate magnate, bought 10% of the team in 2016.
Former Wolves great Kevin Garnett expressed on Twitter his desire to assemble a group to make a bid. Garnett had planned to join the late Flip Saunders to make a bid to buy the Wolves from Taylor after his retirement. But Saunders died in 2015, and Garnett became furious that Taylor didn't follow through on what he thought was a promise.
"At this point, I don't want any dealings with Glen Taylor or Taylor Corp. or anything that has to do with him," Garnett told The Athletic earlier this year. "I don't do business with snakes."
Taylor said on WCCO radio that he expects the WNBA's Minnesota Lynx to remain part of the same ownership group.
Why would Taylor sell the team now?
Taylor has mulled selling for years. He put the team on the market in 2013. But when Saunders returned to become president, Saunders acquired an ownership share, and Taylor agreed to take the team off the block, as he intended to give Saunders some time to try to put together a group to buy the team.
After Saunders' death, Taylor came to an agreement with Steven Kaplan to sell Kaplan 30% of the team, with a plan to sell him a controlling share when Taylor was ready to let it go. But Kaplan was unable to sell a minority stake in the Memphis Grizzlies, and the deal fell apart.
Like most teams, the Wolves are facing heavy financial losses next season if fans cannot attend all or some games because of the coronavirus pandemic. Selling before next season would shelter Taylor from those losses. He recently sold interest in other businesses in the wake of the pandemic.
As he has almost done in the past, Taylor could decide to sell a piece of the team, with the new buyer having a contractual pathway to buying him out at a later date. That would provide fresh capital to weather the coming storm but wouldn't require Taylor to give up control of the team immediately.
Would the team move?
Taylor, believed to be the richest man in Minnesota, has been adamant that this isn't an option. In the past, sales agreements have included provisions that forbid new owners from moving the teams under certain conditions.
Several times in the past decade, bidders have come to Taylor with the intention of buying the team to move it, including a group led by Chris Hansen, who tried to buy the Sacramento Kings and move them to Seattle in 2013.
The Target Center recently completed a renovation that included $75 million in public money. As part of the deal, the Wolves extended their lease with the city-owned building through 2035.
It should be noted that the Wilf family engaged in difficult negotiations with the city to replace the Metrodome with the team's current home, U.S. Bank Stadium. Before a deal was struck in 2012, the Vikings were believed to be candidates to move to Los Angeles.
How much could the Wolves sell for?
The most comparable recent sale came last year, when Grizzlies owner Robert Pera bought out his partners in a deal that valued the team at $1.25 billion.
If Taylor were willing to allow the team to be moved as part of a sale, it could get significantly more -- perhaps north of $1.5 billion, several brokers who handle team sales told ESPN. With Taylor unwilling to agree to such terms, the price could be closer to the Grizzlies' number.
Having said that, Taylor's decision to publicly announce his plans and that he has bidders could be designed to juice the price and attract new interest. Although Taylor has been in talks about a possible sale for at least a month, the news caught some fellow NBA owners contacted by ESPN by surprise.
NBA sales have been robust recently, with big-market teams such as the Brooklyn Nets ($2.35 billion), Houston Rockets ($2.2 billion) and LA Clippers ($2 billion) pushing the average NBA franchise value to more than $2 billion, according to Forbes.
What's the financial situation with the Wolves' roster?
The Wolves will be in the luxury tax this year, though that's mostly an anomaly due to the trade-deadline acquisition of D'Angelo Russell. Although they will pay a $582,264 penalty this year, the Wolves have been in the tax only four times since the 2002-03 season. Unless there is a significant decline in the projected $139 million luxury tax for 2020-21, the Wolves will steer clear of paying a penalty for a second consecutive season.
Moving forward, a new ownership group would inherit the four years and $131 million left on Karl-Anthony Towns' contract and the three years and $90 million for Russell. More than 61% of the Timberwolves' payroll in 2020-21 is tied up in those two players. The rest of the roster with committed long-term salary includes seven players -- Josh Okogie, Jarrett Culver, Omari Spellman, Jacob Evans, Naz Reid, Jaylen Nowell and Jarred Vanderbilt -- who are on rookie-scale or minimum-level contracts. (James Johnson's $16 million deal expires after next season.)
Minnesota will have the potential to add three inexpensive contracts (for a projected total of $13 million in 2020-21) in the draft, including their lottery pick, a first-rounder via Brooklyn (if the Nets make the playoffs) and an early second-rounder (projected at No. 33).
Although Minnesota will not have cap space this offseason, the big financial commitment for a new ownership group would come via the restricted free agencies of Malik Beasley and Juan Hernangomez. The two players were acquired at the trade deadline from Denver and posted career highs in minutes and points before the season was postponed.
Will Minnesota's front-office strategy change?
Moments such as this always create some anxiety for a basketball operations department, with decision-makers wondering if a new ownership group will overhaul a front office. But the Timberwolves have a creative and resourceful executive in president of basketball operations Gersson Rosas.
Since he was hired in May, Rosas has turned over the roster (only Towns and Okogie remain) with a series of trades, added an All-Star in Russell and reshaped the front office by building out scouting, analytics and sports science departments that were previously below league average.
Plus, Rosas is not a novice when it comes to navigating the unknown of an ownership sale. In 2017, he was with the Houston Rockets when the team was sold to Tilman Fertitta.
Are more teams going to go up for sale?
The NBA is in a difficult place financially right now, leading to plenty of curiosity around the league about the potential for several teams to be up for sale in the next year or two. Although it appears that the league is on its way to pulling off its bubble inside the Walt Disney World Resort, there is no way to know what next season will look like.
Adam Silver said on a call with players in May that up to 40% of revenue comes from live attendance at games -- something that, because of the ongoing coronavirus pandemic, might not be an option next season. There also is the possibility for revenue sharing to be turned on its head if the big-market teams, which typically buoy smaller market clubs such as Minnesota, don't have excess money to share. That could lead to significant losses for some teams.
Franchise valuations have soared over the past decade. Owners who cash out now could double their initial investments, and that opportunity might be too appealing to pass up.