With an arbitration hearing approaching, potential Timberwolves owners Marc Lore and Alex Rodriguez have deposited a substantial amount of $942 million into an escrow account, as reported by Eben Novy-Williams of Sportico and Shams Charania of ESPN.
According to Novy-Williams, the primary objective for Lore and Rodriguez is to demonstrate that they possess adequate liquidity to finalize their purchase of both the Minnesota Timberwolves and the WNBA’s Minnesota Lynx, should the arbitration panel rule in their favor.
In addition to the escrow amount, they have allocated approximately $300 million in working capital to ensure they are prepared to assume control of the teams, as noted by Sportico.
Brian Windhorst from ESPN first disclosed last month that Lore and Rodriguez planned to secure more than $900 million in escrow ahead of the arbitration hearing scheduled for November.
This sum of $942 million is sufficient to completely buy out Glen Taylor, the longtime owner, under the terms of their agreement, thereby granting the new owners full control of both franchises.
Lore and Rodriguez initially reached an agreement in 2021 to acquire the Timberwolves from Taylor for a valuation of $1.5 billion. Their strategy involved a gradual buy-in over three years, starting with a 20% stake in the team, followed by an increase to 40%.
Earlier this year, they were poised to take majority control by raising their stake to 80%, while Taylor would retain a 20% ownership stake.
However, Taylor announced in March that he would maintain his majority ownership of the Timberwolves, citing that the prospective owners had failed to meet the deadline for their third payment, which would have elevated their stake from 40% to 80%.
In response, Lore and Rodriguez contested this assertion, claiming they had submitted the required financial documentation and were simply awaiting league approval.
The arbitration hearing is set to commence on November 4. Although Lore and Rodriguez reportedly feel confident about their chances of success, it is anticipated that the panel may take several weeks to reach a final decision.
This situation highlights the complexities of ownership transitions in professional sports and the financial maneuvers necessary to navigate such challenges.
With an arbitration hearing around the corner, prospective Timberwolves owners Marc Lore and Alex Rodriguez have put $942MM into an escrow account:https://t.co/rW4xlYTwdK
— Hoops Rumors (@HoopsRumors) October 23, 2024
