Selling Charlotte Hornets Is Enough For Michael Jordan To Be A Billionaire

Selling Charlotte Hornets Is Enough For Michael Jordan To Be A Billionaire

If you will make the decision, what will you choose?

In December 2002, Robert L. Johnson became the first African American majority owner of a major professional sports team in the United States. He was awarded the Charlotte Bobcats, now known as the Charlotte Hornets.

Two years earlier, when he sold BET to Viacom for $3 billion, Johnson made a $1 billion fortune. Unfortunately, Robert and his wife were estranged just as he finalized the Hornets contract. 

Robert agreed to pay Sheila Johnson between $400 and $500 million, or approximately half of his net worth at the time, upon their divorce. 

Michael Jordan’s net worth in 2006 was $450 million, and this is after he paid Juanita Jordan $168 million in a divorce settlement. His net worth at the time was almost solely attributable to his royalties from the Nike/Jordan brand.

Robert L. Johnson sold Michael a minority stake in the Bobcats in 2006. In 2010, Michael completely supplanted Robert as the team’s predominant owner; inn the same year, he paid $175 million for approximately 90 percent of the team.

In other words, Michael’s acquisition in 2010 valued the Hornets, then known as the Bobcats, at $233 million. Michael sold off minor portions of his Hornets equity over the years, reducing his ownership to 80%. Gabe Plotkin, a hedge fund manager, has been one of the primary purchasers. 

If this name sounds familiar, Gabe founded Melvin Capital, a hedge fund. Melvin was the primary target of a group of “stonk” Reddit speculators who orchestrated the infamous 2021 Gamestop short squeeze.

Gabe’s hedge fund may have been slain. Still, his finances appear to have survived, as he is now the primary investor in the rumored buyout of Michael’s Hornets ownership. According to widespread rumors, Michael Jordan is in advanced negotiations to transfer his majority stake in the Charlotte Hornets of the National Basketball Association. 

Michael owns 80% of the Hornets and is the only majority-black NBA team proprietor. Michael initially invested in the Hornets in 2006, when they were known as the Bobcats.

In 2010, he increased his stake to 80 percent by purchasing out the original majority proprietor, BET founder Robert L. Johnson, and in  2014, the franchise was officially renamed the Hornets. Under Jordan’s ownership, the Hornets’ value has skyrocketed despite the team’s lack of a notably impressive record since 2010. 

If the rumors about the sale are accurate, Michael’s financial windfall will make him the undisputed financial GOAT of GOATS. Suppose the Hornets are sold for $2 billion. Thus, a stake of 80 percent would be worth $1.6 billion. 

Let’s presume Michael has spent $250 million in purchases and other operational costs throughout his ownership. This leaves $1.35 billion in taxable gains. Michael’s principal residence is in Florida, which has no state income tax and Michael will earn approximately $1.1 billion.

After taxes, he received $1.1 billion deposited directly into his bank account for a franchise that has only made the playoffs three times in his 17 seasons as the owner, each time losing in the first round, and had only four winning seasons overall. 

Even with that performance, he will earn slightly more than a billion dollars, and Michael’s status as the GOAT of all GOATS will now be irrevocably cemented.