Bobcats Add Jordan As Part-Owner, Basketball Ops Manager

Jordan (l) Acquires Minority Stake In Bobcats From Johnson

Michael Jordan has been named Bobcats Managing Member of Basketball Operations after entering into a venture with Bobcats Owner Robert Johnson to invest in business opportunities in media, entertainment and financial services. As part of the deal, Jordan becomes the largest individual owner of the team after Johnson. Johnson said Jordan paid cash for the stake and there “is no chance” of him playing for the team. Johnson said Jordan “will be engaged on a day-to-day basis,” but he “is not a day-to-day employee — he’s not an employee at all. He is an owner who I have given the authority to oversee all of basketball player personnel decisions. ... [Bobcats GM & coach Bernie Bickerstaff] will be returning as head coach and [GM] and working closely with Michael to make decisions about player personnel and everything associated with the players. Michael will have the authority to make decisions based on the input he gets from Bernie.” Johnson added Jordan “saw this as a way to be connected with basketball, do other business pursuits and do something with a friend of his in Carolina where he was born and played [college] ball, and do it with a team that has a fresh, new start.” In terms of leveraging Jordan on a marketing or PR basis, Johnson said, “You do not leverage Michael Jordan. You don’t need to. He knows what it means to be a part owner and what it takes to make a business successful” (THE DAILY).

PAY FOR PLAY: In Charlotte, Rick Bonnell cites an industry source as estimating that Jordan “will pay [$10-20M] for a piece of the team.” Johnson said that Jordan “did not acquire a right of first refusal should Johnson eventually want to sell controlling interest in the team.” Neither DC-based Johnson nor Chicago-based Jordan are “expected to move” to Charlotte on a full-time basis, though Jordan “would have office space at the new arena if he wants” (CHARLOTTE OBSERVER, 6/16). The CHARLOTTE BUSINESS JOURNAL’s Erik Spanberg cites sources saying that the addition of Jordan “leaves Johnson with a controlling interest of about 65% in the Bobcats.” There is no plan to bring Jordan to Charlotte for an introductory press conference, but Jordan “will participate in owners’ meetings and visit Charlotte as his schedule permits.” Johnson said that the deal “was consummated over a series of meals” in Chicago and DC and finalized on Thursday (BIZJOURNALS.com, 6/16).

WELCOME BACK: NBA Commissioner David Stern said of Jordan’s return, “We’re elated to have Michael back in the league ... in an area of the country ... where his contributions have been so well recognized” (NBA). Mavericks Owner Mark Cuban added, “It’s going to be hard for Michael, but it’s great for the league and it’s great to have Michael Jordan back in it” (N.Y. DAILY NEWS, 6/16).

MARKETERS QUESTION SUSTAINABILITY: Univ. of Oregon Warsaw Sports Marketing Center Managing Dir Paul Swangard said Jordan “infuses the franchise with a marketable asset. It may not be sustainable, but they’ll see a short-term bump from his involvement” (BLOOMBERG NEWS, 6/15). Sports Business Group President David Carter: “It will give them a lot of (notice) and a short-term bump, but if they start out 2-12, the struggles of the franchise will remain an issue” (CHARLOTTE OBSERVER, 6/16).

Bobcats Add Another Marketable Asset To Ownership Group

WHAT THEY’RE SAYING: In Chicago, Sam Smith writes it is “unclear whether Jordan’s influence will put people in the seats in Charlotte, but it will direct media attention to the Bobcats” (CHICAGO TRIBUNE, 6/16). In Charlotte, Scott Fowler: “Jordan’s arrival is a good thing. Put it this way: The Bobcats have very little to lose. Yes, they have a decent young nucleus of talent. But Charlotte hasn’t embraced the team. ... This team won’t engage this city until [it wins]” (CHARLOTTE OBSERVER, 6/16). In N.Y., Harvey Araton writes the timing of the announcement — “a couple of hours before the opening tip — made you wonder what [Jordan] was trying to say, or prove.” Jordan and Johnson “could have dropped the bombshell earlier in the day, or waited until today, or until after the series” (N.Y. TIMES, 6/16). In Denver, David Krieger writes Jordan “had decision-making authority over player personnel for a franchise once before [the Wizards] and it was pretty much a disaster” (ROCKY MOUNTAIN NEWS, 6/16). ESPN.com’s Marc Stein noted Jordan “softened his stance” that he would not get involved with a team “unless he had full operational control” (ESPN.com, 6/15). In N.Y., Mitch Lawrence writes, “Johnson has a reputation for tight purse strings, which could be a challenge for Jordan” (N.Y. DAILY NEWS, 6/16).

ON THE WING: As part of the deal, Jordan can invest in a number of Johnson’s other entities. Johnson: “We are looking at other business investments — an investment in Charlotte, North Carolina, in something called [RolloverSystems]. We have a number of businesses that Michael has the opportunity to look at, as well as to bring us deals” (Bobcats). The following chart presents a few ventures in which Johnson’s RLJ Cos. is involved. (CHARLOTTE OBSERVER, 6/16).

COMPANY	DESCRIPTION
Urban Trust Bank	provides banking services in urban areas
RLJ Development	hotel/real estate investment company
RLJ Urban Lodging Fund	private equity real estate fund
RLJ Asset Management Group	hedge fund investment firm
RLJ Equity Partners	private equity fund in partnership with The Carlyle Group
Bobcats	WNBA Sting and Charlotte Bobcats Arena Operations
Caribbean Gaming & Entertainment	video lottery terminal company
RolloverSystems	retirement services company
Three Keys Music	jazz recording company