Billionaire Tom Gores Snags 27% Stake in LA Chargers for $750 Million
In a major deal that shakes up the NFL landscape, private equity mogul Tom Gores has agreed to purchase a 27% stake in the Los Angeles Chargers for a whopping $750 million. The transaction values the team at a staggering $4 billion, a significant discount from its estimated worth of $5.83 billion.
A Savvy Business Move
Gores, who also owns the Detroit Pistons, managed to secure a larger-than-usual discount due to the size of his investment. Typically, limited partners without control of the team receive a 20-25% discount. However, Gores’ 27% stake, just shy of the required 30% for controlling ownership, earned him a more substantial price cut.
The Fine Print
The deal comes with a “flip tax” of 10% of the sale amount, which will be paid by the seller and divided equally among the other 31 NFL teams. This tax was part of the Chargers’ agreement with the league when they relocated to Los Angeles in 2015.
Resolving Legal Disputes
The sale also brings an end to the legal disputes between Dea Spanos Berberian and her siblings, which began in 2021 when Berberian sought to force a sale of the franchise. With this transaction, all related lawsuits will be resolved.
Gores’ Sports Empire Expands
This move marks a significant expansion of Gores’ sports empire, which already includes the Detroit Pistons. The private equity founder has a history of preferring to rent rather than operate stadiums, a strategy that allows him to avoid financing and operating expenses.
The Stadium Factor
The Chargers’ valuation is heavily influenced by stadium economics, with the team playing in SoFi Stadium, also home to the Los Angeles Rams. Stan Kroenke, owner of the Rams, owns the stadium, which contributes to the Rams’ higher valuation of $8 billion compared to the Chargers’ $5.83 billion.
A Shrewd Businessman
Gores’ deal highlights his shrewd business acumen, as he manages to secure a significant stake in the Chargers while avoiding the financial burdens of stadium ownership. As the NFL landscape continues to evolve, Gores’ move is sure to have a lasting impact on the sports world.
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