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Private equity billionaire Tom Gores has reached a deal to purchase a 27% stake in the National Football League’s Los Angeles Chargers for $750 million. The enterprise value of the team is $4 billion, which represents a significant discount compared to its estimated value of $5.83 billion. Gores’ larger discount is attributed to the substantial stake he acquired, just 3% shy of the required amount for a controlling owner. Despite the size of his investment, he will be a limited partner without control over the team’s operations.

The transaction includes a “flip tax” of 10% of the sale amount, to be paid by the seller and distributed among the other NFL teams. Gores is purchasing the 24% stake previously owned by Dea Spanos Berberian and additional shares from Dean, Alexis, and Michael Spanos. After the sale, the Spanos family will collectively own 69% of the team, while Gores and his wife will have a 27% stake, and two longstanding limited partners will retain 4%.

Dean Spanos remains the team’s controlling owner and chairman, following in the footsteps of his late father, Alex G. Spanos, who acquired the team in 1984. This deal also resolves all legal disputes between Berberian and her siblings, as well as with the Chargers, stemming from a 2021 lawsuit seeking a franchise sale.

Although Gores also owns the NBA’s Detroit Pistons, this purchase of the Chargers stake is a personal investment and not affiliated with his firm, Platinum Equity. Gores’ preference for renting sports facilities rather than owning them is evident in his ownership of the Pistons playing in Little Caesars Arena, controlled by the Ilitch family, and the Chargers playing in SoFi Stadium, owned by Stan Kroenke.

Renting stadiums offers financial advantages as it eliminates the burden of financing and operational costs, as well as event management responsibilities. Gores’ deal for the Chargers stake is subject to a “flip tax” of 10%, to be paid by the seller.

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