Mediation was unsuccessful this week in the dispute between minority owners and business partners Marc Lore and Alex Rodriguez and principal owner Glen Taylor over majority control of the NBA’s Minnesota Timberwolves and WNBA’s Minnesota Lynx.
After failed mediation, Timberwolves, Lynx ownership dispute heads to arbitration
Arbitration process will take place in Minneapolis and must be completed within six months, according to contract.
The Minnesota Star Tribune
May 2, 2024 at 10:08PM
The conflict will now head to arbitration, a binding procedure for settling private disputes to avoid going to court.
The mediation hearing, supervised by retired Hennepin County Judge Rick Solum, did not resolve a central disagreement over a call option clause for the completion of a deal for Lore and Rodriguez to acquire majority shares from Taylor, people with knowledge of the matter told the Star Tribune.
When contacted Thursday, Solum declined to comment on the mediation hearing. The Timberwolves also declined to comment. Messages to lawyers representing Lore, Rodriguez and Taylor were not answered.
The value of the dispute exceeds $5 million, so by terms of the contract agreement, an arbitration award would be determined by a three-member panel. One of the members has to be a retired Hennepin County or federal district court magistrate judge from the District of Minnesota. Each side can choose an arbitrator for the panel.
In the event Taylor, Lore and Rodriguez can’t agree on the retired judge selection, a chief judge of the Hennepin County District Court will choose for them.
The arbitration must be completed within six months and take place in Minneapolis, according to the contract.
Lore and Rodriguez were expected to make their third and final installment of a $1.5 billion payment to Taylor for the teams by March 27, giving them 80% ownership of the franchises. The next day, Taylor said in a statement that the acquisition option had expired because Lore and Rodriguez missed the deadline.
Lore, a billionaire tech entrepreneur, and Rodriguez, the former baseball star-turned-investor, said they secured the necessary funding for the deal and submitted the paperwork to the NBA on time. That deadline can be extended 90 days, they said, if the sides are awaiting league approval to finish the acquisition.
The Timberwolves and Lynx are valued at a combined $2.5 billion.
The arbitration panel could rule in Taylor’s favor, determining he was allowed to say the team was no longer for sale. The panel could also rule Lore and Rodriguez were allowed a 90-day extension and Taylor, who also owns the Star Tribune, must sell them the team, or pay monetary damages.
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If Lore and Rodriguez win the arbitration battle, they still would have to go through and complete the NBA’s approval process, but a decision in their favor would likely expedite the ownership transfer process.
Staff writer Chris Hine contributed to this report.
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