Michael Jordan’s Purchase of Charlotte Bobcats Approved

Transforming the debt-laden basketball team will require NBA legend's presence and pocketbook

Bobcats majority owner Michael Jordan. (Source: Bobcats.com)

Now that Michael Jordan’s $275 million bid to buy the Charlotte Bobcats from billionaire Robert L. Johnson has been approved by the National Basketball Association’s Board of Governor’s, the former basketball great’s MJ Basketball Holdings L.L.C. has a controlling interest in the team, the Time Warner Cable Arena, and gives him the option to change the team’s name.

“Purchasing the Bobcats is the culmination of my post-playing career goal of becoming the majority owner of an NBA franchise,” said Jordan, in an interview with NBA.com.

Johnson, the founder of The Bobcats Basketball Holdings L.L.C. (No. 40 on the 2009 BE Industrial/Service Companies list), became the first African American owner of an NBA franchise when he paid $300 million for the expansion team in 2002. Jordan, a six-time NBA champion and hall of famer, will be the second African American and the first NBA player to own a franchise. Johnson will remain a minority owner of the team.

“I am confident that Michael’s leadership will bring success to the Bobcats whether it’s measured by on the court performance, success as a business, or making a positive impact in the Charlotte community,” said Johnson, who also owns several companies including Maryland-based RLJ Development (No. 8 on the BE Industrial/Service list with $605.2 million in revenue) and Urban Trust Bank (No. 12 on the 2009 BE Banks list with $206.9 million in deposits).

Jordan is a five-time NBA MVP — notably for the Chicago Bulls — and 14-time All-Star who has made millions selling sneakers, apparel and other items, according to the Associated Press.

Johnson, the creator and former owner of Black Entertainment Television, put the team up for sale because poor on-court performance and little interest from fans have kept ticket sales low and caused the team’s debt to rise. The transaction involves Jordan taking on $150 million of debt, which might be more than his net worth of $400 to $500 million can handle, according to ESPN.

Jordan, 47, bought a minority stake in the Bobcats in 2006, which came with the opportunity to be manager of basketball operations. Critics at ESPN say that both Johnson and Jordan’s absence from daily operations in Charlotte and Jordan’s ineffectual draft picks produced the Bobcat’s lackluster financial performance. However, on the court, the team has improved and the franchise could make its first NBA Championship Playoff appearance this year.

“Now that I’m the principal owner, I understand the commitment I’ve made and know the responsibilities are different,” says Jordan, who resides in Chicago and Charlotte. “I’m up for that challenge. I’ll do whatever I can to make this team a success both on and off the court.

The team was represented in the transaction by GSP Securities LLP and Jordan was represented by Moag and Co.  and Wachtell, Lipton, Rosen and Katz.

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  • WALTER WEBB / FREELANCE WRITER

    SINCE MICHAEL JORDAN TOOK OVER THE NBA’S CHARLOTTE BOBCATS THERE HAS
    BEEN INCREASED INTEREST IN INVESTING IN THE SPORTS MANAGEMENT FIELD. WELLS
    FARGO / WACHOVIA SECURITIES (WFC) AND BANK OF AMERICA (BAC) ARE FINANCIALLY INVESTED IN THE BASKETBALL TEAM. AND BAC IS HEAVILY INVESTED IN THE NFL’S CAROLINA PANTHER FOOTBALL PROGRAM. HENLEY LIMITED PARTNERSHIP/BOSTON CELTICS (HYNLZ)HAS WITNESSED INCREASES IN ITS SHARES ON
    THE NEW YORK STOCK EXCHANGE (NYX). OTHER COMPANIES HAVE LARGE PERCENTAGE OF SHARES IN STILL MORE SPORTS TEAM. COMCAST (CMCSA) CENTER IN PHILADELPHIA IS INVESTED IN THE 76ERS BASKETBALL AND FLYERS PROFESSIONAL
    FRANCHISE TEAMS. IN THE WORLD OF GOLF CALLAWAY GOLF (ELY) SUPPLIES THE PGA
    AND LPGA WITH CLUBS. AND TOP RECREATION OUTLETS LIKE DICKS SPORTINGS GOODS
    (DKS) HAS ALL YOUR PROFESSIONAL AND RECREATIONAL SPORTING NEEDS. WITH TIA
    NORFLEET BEING THE FIRST AFRICAN AMERICAN WOMEN ABOUT TO BREAK THE COLOR
    BARRIER IN NASCAR MANY AFRICAN AMERICANS ARE LOOKING SERIOUSLY AT DOVER
    MOTORSPORT INC. (DVD) AS A PROFESSIONAL SPORT INVESTMENT VEHICLE. JOINING
    THE IVORY COAST’S DIDIER DROGBA WHO HAS INFLUENCED MANY TO VIEW SOCCER TEAMS LIKE JUVENTUS (JVTSF) FOOTBALL / SOCCER AS AN OUTLET FOR PUTTING THEIR MONEY IN. AND IF THIS IS NOT ENOUGH NIKE (NKE) HAS PURCHASED UMBRO
    SOCCER TEAM AS PART OF THEIR GLOBAL SPORTS MANAGEMENT AND APARREL BUSINESS. INVESTMENT COMPANIES ARE ALSO PLAYERS IN THE SECURITY INVESTMENTS OF SPORTS. RLJ HOTELS & REAL ESTATE FUND (RLJ) CHIEF EXECUTIVE
    OFFICER MR. ROBERT JOHNSON COMPANY HAS INVESTMENTS TIED UP IN HIS REAL ESTATE. AFTER SELLING THE BOBCATS TO MICHAEL JORDAN IT WILL ALLOW HIM MORE TIME TO CONCENTRATE ON HIS BRAINCHILD COMPANY. IN MARYLAND M&T BANK
    (MTB) HAS PUT UP A LOT OF CAPITAL IN THE NFL’S BALTIMORE RAVENS FOOTBALL
    TEAM. AND ACROSS TOWN LEADING FINANCIAL COMPANY LEGG MASONS (LM) SPONSORS
    THE ATP’S PROFESSIONAL ANNUAL TENNIS TOURNAMENT FOR THE METRO BALTIMORE-
    WASHINGTON, D.C.-NORTHERN VIRGINA AREA PROFESSIONAL SPORTS EVENTS. BERSHIRE HATHAWAY (BRKB) HAS PURCHASED A MINORITY INTEREST IN WRIGLEY GUM
    FOR JUST OVER TWO BILLION DOLLARS WHILE CANDY MAKER MARS HAS AGREED TO BUY
    THE COMPANY MAKING ROOM FOR HERSHEYS (HSY) TO BE A PLAYER. HAWAII HOLDINGS
    PARENT OF HAWAIIAN AIRLINES(HA) HAS A TRANSPORTATION AND INVESTMENT PACKAGE WITH THE NFL’S LA RAIDERS FOOTBALL TEAM. THEY ARE ALSO TRANSPORTATION SPONSORS FOR THE SEATTLE SEAHAWKS PRO FOOTBALL TEAM.