San Antonio Spurs Ownership Selling Minority Stake In NBA Team (EXCLUSIVE)

By Scott Soshnick

LOS ANGELES (Variety.com) – The ownership group of the San Antonio Spurs is selling a minority stake in the team, people familiar with the matter told Sportico.

The team has retained Guggenheim Partners to manage the process, said the people, who were granted anonymity because the matter is private.

Guggenheim’s chief executive officer is Mark Walter, who is the controlling owner of baseball’s Los Angeles Dodgers.

Guggenheim didn’t reply to an email seeking comment on the stake sale. A Spurs spokesperson said in a statement, “As an ownership group we remain 100 percent committed to the city of San Antonio. Every day we celebrate the amazing relationship that exists between our community, our fans and our Spurs. San Antonio is home and will remain home.”

It isn’t known which member of the National Basketball Association team’s ownership group is selling or how large a stake is available. The Spurs are controlled by the Holt family, but the ownership group includes a number of investors.

It has become increasingly difficult for owners to unload limited partnerships, or LPs as they’re known, as the valuations of professional sports franchises have skyrocketed.

The Spurs, for instance, are worth about $1.8 billion, according to Forbes magazine, meaning a 5% stake would cost about $90 million.

That said, because limited stakes often come without a board seat or a say in how the franchise is run, there’s usually what’s referred to as an LP discount of 10-25%.

The NBA is weighing the creation of an investment vehicle that would allow private equity firms to buy LP stakes, including investments across multiple teams. Major League Baseball, meantime, changed its rules last year to allow investment funds to acquire LP stakes in multiple clubs.

The Spurs are one of the NBA’s most consistent franchises, having reached the playoffs 22 consecutive seasons.

The Holt family bought the team in 1996 for about $76 million.

The NBA regular season was halted in March after a Utah Jazz player tested positive for the coronavirus. The league is mulling several plans that would enable play to resume.

Scott Soshnick is the editor-in-chief of Sportico, Penske Media’s new sports business platform.

Story updated at 3:31 p.m. PT with a statement from the Spurs.