Basketball legend Michael Jordan has agreed to sell his majority stake in the Charlotte Hornets basketball team to hedge fund billionaire Gabe Plotkin and private equity mogul Rick Schnell, the Hornets said Friday.
The sale, subject to approval by the National Basketball Association’s Board of Governors, values the team at about $3 billion, according to two people familiar with the matter.
The sale is the latest sign that professional sports team valuations have appreciated amid more lucrative media rights deals and an influx of private capital investment at the minority level.
Joining Plotkin and Schnall in the new ownership group are sports-focused investment fund Dyal HomeCourt Partners (a unit of asset manager Blue Owl) and rapper J Cole, a North Carolina native, among others.
Plotkin, a former top trader at SAC Capital, struck out in 2014 to start his own firm, Melvin Capital, named after his late grandfather. The company has raised more than $1 billion and is backed by SAC owner Steven Cohen.
With strong returns between 2014 and 2021, it has raised billions since its launch.
In early 2021, the meme-stock frenzy that sent shares of companies like AMC and GameStop soaring put Plotkin in a bind. His fund has suffered multi-billion dollar losses and needs an emergency investment of $2.75 billion from Ken Griffin’s Citadel and Cohen’s Point72.
Last year, after vowing to make his investors whole, Plotkin closed his hedge fund, returned capital and converted his investments into a family office.
Schnall is one of Clayton, Dubilier & Rice’s senior executives, leading the firm’s investments in healthcare and growth investments. He was named co-president in 2020 as part of succession planning.
Jordan won six NBA championships with the Chicago Bulls and is widely regarded as one of the greatest players of all time. He reportedly bought the Hornets for $27 million in 2010 and will retain a minority stake in the team. However, it leaves the NBA without a primary black owner when diversity in the sports front office becomes a focus of criticism.
“I wish there was better representation on the key governors side,” NBA commissioner Adam Silver told reporters earlier this month amid rumors of an impending sale of the Hornets. “It’s a market. If we expand (by adding new teams), the league will be able to focus on that directly, but in individual team deals, the market will take us to where we are.”