Robert Sarver and the NBA are headed for a divorce. The embattled Phoenix Suns managing partner announced Wednesday that he has started the process to sell the franchise and the WNBA’s Phoenix Mercury.
That process could create a rash of potential buyers. “Bidders are going to line up from Phoenix to the Empire State Building,” said one longtime sports investment banker, who requested anonymity because of his dealings with multiple NBA teams.
Sarver’s announcement comes a week after the NBA suspended him for his workplace behavior. “As a man of faith, I believe in atonement and the path to forgiveness,” Sarver said in a statement. “I expected that the commissioner’s one-year suspension would provide the time for me to focus, make amends and remove my personal controversy from the teams that I and so many fans love. But in our current unforgiving climate, it has become painfully clear that that is no longer possible—that whatever good I have done, or could still do, is outweighed by things I have said in the past.”
The league suspended Sarver for one year and fined him $10 million after an investigation into accusations that he expressed a racial epithet, humiliated female employees and oversaw a hostile workplace. The investigation was triggered by an ESPN expose on Sarver published 10 months ago.
In December, Sportico valued the Suns at $1.92 billion, 18th in the NBA. The expectation is that the Suns will command more than $2 billion and could top the $2.2 billion Tilman Fertitta paid for the Houston Rockets in 2017. The record NBA sale is $3.3 billion for the Brooklyn Nets, which Joe Tsai paid in 2019 and included roughly $950 million for the rights to the Barclays Center. Sarver has not hired a bank yet to handle the sale, according to multiple sources.
“I fully support the decision by Robert Sarver to sell the Phoenix Suns and Mercury,” Adam Silver, NBA commissioner, said in a statement. “This is the right next step for the organization and community.”
Phoenix has always been an attractive market for NBA free agents, and the same rules should apply for potential buyers, who will also be drawn to a winter sport in the Arizona climate. Phoenix is one of the fastest growing major metros in the U.S. and currently ranks as the 11th largest media market.
In the coming months, a wide swath of American and international billionaires will kick the tires on this franchise. Oracle founder Larry Ellison and former Disney CEO Bob Iger, who are both based on the west coast, have expressed interest in owning NBA teams, but geography won’t be a limiting factor in a market like Phoenix. The NBA is the most attractive U.S. sports league for international billionaires. One hiccup: the continued strength of the U.S. dollar makes any deal more expensive for those with their money tied up in euros or pounds.
One idea floated by a second sports banker: A deep-pocketed owner buys both the Suns and Arizona Coyotes. The Coyotes, who have been an NHL problem child for more than a decade, are set to play their games in a college arena for at least the next three years amid their never-ending search for a permanent home. In 2021, Sportico valued the Coyotes at $410 million, last in the NHL and $110 million less than any other franchise.
Any new owner will have to think about the Suns long-term venue options. The Footprint Center, which was rebranded in 2021 when the engineering company Footprint bought naming rights, originally opened in 1992 as the America West Arena—US Airways Center and Talking Stick Resort Arena also had their runs as names. The then-revenue-rich building put the Suns near the top of the NBA’s financial table, but the club has since sunk to the bottom dozen as other teams built new arenas. There are now only three NBA venues older than Footprint, and one of them, Madison Square Garden, underwent a $1 billion renovation completed in 2013.
In 2004, Sarver led a group that bought the team for $401 million from Jerry Colangelo, who is considered the "godfather" of Arizona sports for helping bring baseball, basketball and hockey to the desert. Sarver owned 30% of the team at the time of purchase, and he should net at least $500 million on a potential sale. Sam Garvin, Jahm Najafi and Andrew Kohlberg also own significant equity stakes. In 2021, private equity firm Dyal Capital bought a 4.9% stake in the club at a discounted $1.55 billion valuation.
Garvin is a major shareholder and was selected as interim governor during Sarver’s suspension. He could have a leg up in the bidding process with a stake already estimated at 20%. Najafi spoke out strongly against Sarver when the NBA opened its investigation in late 2021. He doubled down last week when the punishment was released, publishing an open letter that called out Sarver’s ability to continue to own the team.
“Similar conduct by any CEO, executive director, president, teacher, coach or any other position of leadership would warrant immediate termination,” Najafi wrote. In the letter, he said he had no interest in being the managing partner. Najafi declined comment through a representative on Sarver’s sale announcement.
LeBron James, Chris Paul and NBPA executive director Tamika Tremaglio also blasted the punishment, arguing Sarver got off easy. Jersey patch partner PayPal vowed to end its relationship with the club if Sarver stayed involved at all.
The Suns were considered one of the NBA’s top franchises on and off the court under Colangelo, who was the controlling owner since 1987. Sarver quickly built a reputation as one of the NBA’s most meddlesome owners and one who would pinch pennies. The franchise missed the playoffs for 10 straight seasons—not easy in a league were more than 50% of clubs make the postseason. The club rebounded in 2021 with a trip to the NBA Finals and is considered a title contender for the 2022-23 season behind the backcourt duo of Devin Booker and Paul.
“I care very deeply for the organization,” Colangelo said in a phone interview. “I haven't had time to absorb [the sale news]. It's way too early.”
Scott Soshnick and Eben Novy-Williams contributed to this report.
(This story has corrected the spelling of Suns minority owner Jahm Najafi's name in the 11th, 12th and 13th paragraphs.)