Billionaire private equity mogul Tom Gores has agreed to pay $750 million to buy 27 percent of the National Football League’s Los Angeles Chargers at an enterprise value of $4 billion, according to two people with knowledge of the deal who spoke on condition of anonymity to discuss non-publicly. details.
The $4 billion valuation is more than a 30% discount to the team’s $5.83 billion value, according to CNBC’s Official 2024 NFL Team Valuations. Limited partners who do not have a path to group control typically receive a 20% to 25% discount on these offers.
Gores likely got a larger-than-usual discount for buying such a large chunk of the Chargers — 27%, just 3% less than the required stake for a controlling owner, though he’ll be a limited partner with no say in how the team is run. .
The deal is also subject to a ‘flip tax’ of 10% of the sale amount, with the seller liable to pay, which will be split equally among the league’s remaining 31 teams. The inversion tax was a deal the Chargers made with the league in 2015 as part of the deal to move the team to Los Angeles and is similar to the deal the Las Vegas Raiders made with the NFL before moving from Oakland, California.
Gores is buying the entire 24 percent stake previously held by Dea Spanos Berberian as well as 1 percent each from Dean, Alexis and Michael Spano, according to one of the people familiar with the deal.
When the sale closes, Dean, Alexis and Michael Spanos will together own 69 percent of the group, the person said, while Gores and his wife, Holly, will own 27 percent and two longtime limited partners will hold the entire the 4%. .
Dean Spanos remains the controlling owner and chairman of the board of the Chargers. 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 her three siblings and with the Chargers. Those disputes date back to 2021, when Berberian sued to force the sale of the franchise. The legal action and related lawsuits filed by Berberian and her family ultimately failed to move forward.
Gores is also the owner of the Detroit Pistons of the National Basketball Association. The founder’s private equity firm Platinum Equity bought the team for $325 million in 2011. Gores bought out Platinum’s stake in 2015, giving him 100% of the team’s equity.
The purchase of the Chargers stake is made solely by Gores and is not affiliated with Platinum Equity. The NFL declined to comment on the deal.
While stadium finances are a major factor in determining team valuations, when it comes to sports, Gores seems to prefer being a renter to an operator.
The Pistons play at Little Caesars Arena, which is home to the Detroit Red Wings of the National Hockey League. The Ilitch family, which owns the Red Wings, operates the arena, which means it takes the money from non-NHL and non-NBA events.
Likewise, the Chargers play at SoFi Stadium, which is also the home of the Los Angeles Rams. Stan Kroenke, who owns the Rams, 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 rankings for 2024.
But renting has its advantages: You don’t have to pay the costs of financing or running the stadium, nor do you have the responsibility of booking events.
Correction: Tom Gores’ deal for a stake in the Los Angeles Chargers is subject to a “reverse tax” of 10% of the sale amount, with the seller liable to pay. An earlier version incorrectly characterized the tax.