The two investors informed the NBA team Thursday that they intend to buy another 20% of the Timberwolves and Minnesota Lynx, said the person, who was granted anonymity because the details are private. Lore and Rodriguez had until Dec. 31 to exercise the option, part of a unique layaway deal approved by NBA owners last year. The pair must close on this portion within the next 60-90 days.
The valuation in this payment, according to other people familiar with the deal, is slightly higher than the $1.5 billion in the 20% that Lore and Rodriguez purchased last year. It’s unclear who’s paying what, or if other investors are joining the pair in this round. The two have been raising money throughout 2022, and the New York Post reported last year that Lore footed the bulk of the first payment.
A representative for Lore declined to comment. Representatives for Rodriguez and the Timberwolves didn’t immediately respond to a request for comment. The news was first reported by The Athletic.
This is the first of three call options in the deal Lore and Rodriguez struck last year with majority owner Glen Taylor. In July 2021, Lore and Rodriguez purchased 20% of the Timberwolves and Lynx at a $1.5 billion valuation. That deal gave them three call options to keep buying shares—another 20% by the end of 2022, another 40% by the end of 2023, and the final 20% by the end of 2024, each at slightly higher valuations. The group has 60-90 days to close after exercising each option. If a payment is missed, the rest of the deal is terminated, and the two investors keep only what they’ve already bought.
The agreement turned heads in the NBA when it was announced because of the valuation, the structure, and uncertainty surrounding the money. Lore has a successful track record as an entrepreneur, including the sale of his Jet.com to Wal-Mart for $3.3 billion, though it’s unclear if he’s a billionaire. Rodriguez made $455 million in salary in his MLB career, according to Spotrac.
The two business partners spent much of 2022 raising money to continue with the purchase, according to multiple people familiar with the talks. They pitched individual investors, family offices and private equity firms on the possibility of joining their deal, often at significantly higher valuations. Some of those talks, which continued into December, the people said, centered around valuations higher than $2 billion.
Many in the NBA now view the original purchase agreement as a steal. The Timberwolves are worth $1.7 billion, according to Sportico’s most recent valuations, but there’s reason to believe the team would sell for more on the open market. The Phoenix Suns, which Sportico valued at $3 billion, are in the process of selling to billionaire Mat Ishbia in a deal that values the NBA club (and its WNBA team) at $4 billion, a record price for an NBA franchise.
Lore and Rodriguez will own 40% of the Timberwolves and Lynx once this transaction closes. The next call option, for a 40% tranche that includes all the equity held by Taylor’s minority partners, would make the pair the teams’ majority owners.