Earlier this summer, news came out that Michael Jordan was selling his majority stake in the Charlotte Hornets at a valuation of $3 billion. The buying group is led by Gabe Plotkin and Rick Schnall. And the NBA's Board of Governors officially approved the deal, allowing the selling process to continue.
This valuation is quite the change from when Jordan first purchased the team. He initially invested as a minority owner in 2006, buying out the previous owner, BET founder Robert L. Johnson. Jordan spent $275 million to complete the purchase.
By most accounts, Jordan had an 80% stake in the Hornets. He's still retaining a small portion of the team; let's assume it's a 10% stake. At a $3 billion valuation, Jordan will make $2.1 billion in the sale before taxes and fees.
Take away the initial purchase price, operating costs, and federal taxes, and Jordan will walk away with about $1.1 billion. That's about a 5x return on his purchase. But there's more — since he still has a 10% stake in the team, Jordan will get another $300 million from his investment. Even that small minority stake is worth more than when he purchased the team 13 years ago.
Other members of the buying group include rapper J. Cole, singer-songwriter Eric Church, venture capitalists Dan Sundheim, Ian Loring, Chris Shumway, and local Charlotte investors, such as Damian Mills and Amy Levine Dawson.
Despite being one of the greatest players in NBA history — or, per many fans, THE greatest — Jordan's Hornets haven't seen much success under his ownership. Since 2010, the team went 423-600, which is 26th in the league during that span. Their last postseason appearance was seven years ago, and they won a grand total of zero playoff series.
But perhaps things are looking up as Jordan is on the way out. The team has a solid point guard in LaMelo Ball and added Brandon Miller and Nick Smith Jr. in this year's draft. Charlotte also has a veteran presence in Gordon Hayward and will welcome back Miles Bridges, who missed all of last season after being arrested on domestic violence charges.
If the Hornets do manage to turn things around, Jordan will still reap some of the benefits with his minority stake. Combined with more than a billion dollars, that's not a bad deal at all.