1/🧵 In 2010, Michael Jordan bought the Charlotte Hornets for $275 Million
He's just sold his majority stake in it for $3B. More than he ever made from the Jordan brand through Nike
#threadstorm 👇🏽
1/🧵 In 2010, Michael Jordan bought the Charlotte Hornets for $275 Million
He's just sold his majority stake in it for $3B. More than he ever made from the Jordan brand through Nike
#threadstorm 👇🏽
2/🧵 The deal MJ got was a classic example of buying low. His friend, Bob Johnson was in desperate need of cash. So desperate that MJ only had to shell out $25M upfront and take on debt payments
3/🧵 After MJ took the reins, his second season was nothing short of a disaster. The Hornets held the dubious record of the worst season in NBA history, winning a meager 10% of their games. It was an inauspicious start for MJ's venture
4/🧵 For years, the team's performance didn't take a leap. In 2018, a controversy erupted around MJ slapping Malik Monk on the back of his head. The Hornets never clinched a single playoff series under Jordan
5/🧵 The revenue growth, while steady, was slower than the valuation growth. In 13 years, the Hornets' revenue went from $93 million to $269 million annually. Though a 3x increase, it didn't quite match the 10x appreciation
6/🧵 Analyzing Jordan's return rate, he scored a 19% CAGR to hit the 10x in 13 years. In the same timeframe, the S&P500 only had an 11% CAGR, quadrupling in value. Talk about outperforming the market
7/🧵 The Hornets are now in the hands of Gabe Plotkin, infamous for his part in the GameStop saga of 2021 which saw his $8B hedge fund implode. Plotkin is placing his bets again, this time on a sports franchise he believes has potential.
8/🧵 Jordan's exit seems well-timed. The Hornets are primed with the number 2 pick in the forthcoming NBA draft. Brandon Miller and Scoot Henderson, both promising prospects, are on Plotkin's radar
9/🧵 Thus ends one of the best investments / pay-days that MJ has ever had
One of the main things I love about this story is how he bought a distressed asset that he believed to be valuable. He found a way to buy low & bloody
Wow, that's an impressive return on investment! 🏀 Michael Jordan continues to prove that his prowess extends far beyond the basketball court.
His vision and strategic insight for the sports business are as noteworthy as his legendary career with the NBA.
Jordon was a bad owner.
The fact he made such a big return shows how #sports franchises explode in value.
I can only imagine the value of the Knicks and Lakers now.