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Private equity billionaire Tom Gores has agreed to pay $750 million to buy 27% of the National Football League’s Los Angeles Chargers for an enterprise value of $4 billion, according to two people with knowledge of the matter. agreement who spoke on condition of anonymity to discuss non-public matters. details.
The $4 billion valuation represents a reduction of more than 30% from the team’s value of $5.83 billion, according to CNBC’s official 2024 NFL team valuations. Sponsors who have no way of controlling the team typically get about a 20-25% discount on these deals.
Gores probably got a bigger discount than usual because he bought such a large share of the Chargers – 27%, just 3% less than the stake required for a majority owner, despite being a limited partner without having any say in how the team is. run.
In addition to the $750 million paid for his stake in the Chargers, Gores must pay a 10 percent “flip tax” to the NFL that will be split evenly among the league’s 31 other teams. The flip tax was a deal the Chargers made with the league in 2015 as part of the pact to move the team to Los Angeles, like the deal the Las Vegas Raiders made with the NFL before leaving Oakland , in California.
Gores is purchasing the entire 24% stake previously held by Dea Spanos Berberian as well as 1% each from Dean, Alexis and Michael Spanos, according to one of the people familiar with the matter.
Once the sale is finalized, Dean, Alexis and Michael Spanos will own 69% of the combined team, the person said, while Gores and his wife Holly will own 27% and two longtime sponsors will retain 4% overall. .
Dean Spanos remains the Chargers’ majority owner and chairman of the board. His father, the late Alex G. Spanos, purchased the team in 1984 for $72 million.
This transaction will also resolve, in their entirety, all of Berberian’s legal disputes with his three siblings and with the Chargers. These disputes date back to 2021, when Berberian filed a lawsuit seeking to force the sale of the franchise. The lawsuit and related actions brought by Berberian and his family were ultimately unsuccessful.
Gores also owns the Detroit Pistons of the National Basketball Association. The private equity founder and that company, Platinum Equity, purchased the team for $325 million in 2011. Gores purchased Platinum’s stake in 2015, giving him 100% of the team’s equity.
The purchase of the Chargers’ stake is being made solely by Gores and is not affiliated with Platinum Equity. The NFL declined to comment on the deal.
Although stadium economics are an important factor in determining teams’ valuations, when it comes to sports, Gores seems to prefer being a tenant rather than an operator.
The Pistons play at Little Caesars Arena, home to the Detroit Red Wings of the National Hockey League. The Ilitch family, which owns the Red Wings, operates the arena, meaning they receive money from non-NHL and NBA events.
Likewise, the Chargers play at SoFi Stadium, which is also the home of the Los Angeles Rams. Rams owner Stan Kroenke also owns the stadium, which is the main reason the Rams are worth $8 billion compared to the Chargers’ $5.83 billion, according to CNBC’s 2024 rankings.
But renting has its advantages: you don’t have to pay stadium financing or operating costs, or the responsibility of booking events.