Gordon Gund selling his 15% stake in Cleveland Cavaliers
Want to be LeBron James’ boss?
Have an extra $160 million lying around?Then we have a deal for you. Former Cleveland Cavaliers majority owner Gordon Gund is selling his 15 percent minority stake in the team, reports Bloomberg.
Billionaire venture capitalist Gordon Gund is selling his 15 percent stake in the Cleveland Cavaliers, who for the second year in a row are playing for the NBA championship, according to two people familiar with the situation.
The pro basketball franchise best known for four-time MVP LeBron James is worth about $1.1 billion, said valuations expert Peter Schwartz. The stake held by Gund, who owned the Cavaliers from 1983 to 2005, is worth as much as $160 million, said Schwartz, a presidential research scholar at New York University. Gund, 76, and his late brother, George, sold their controlling interest in the team to a group led by Quicken Loans Inc. founder Dan Gilbert in 2005 for about $375 million.
Gund may have sold the majority of the team a little early, the way the value of NBA franchises have skyrocketed (although they bought the team in 1983 for $20 million, so they turned a tidy profit). However, right now he’s not rumored to be the only owner (majority or minority) considering cashing in their chips.
My guess is he will have little trouble finding a buyer. The challenge for minority owners is they tend to be people who are captains of industry (it’s why they have $160 million to spend on a hobby) who are used to getting their way, but as minority owner they don’t have control. Dan Gilbert has the ultimate hammer. He will listen to them, talk to them, but ultimately decide to do what he thinks is best. The minority owner, however, still get to help pay the bills. That can lead to tension.
We’ll see who wants to own a part of the Cavaliers. So long as LeBron is there, the franchise value will remain very, very high.