The Robert Sarver saga has finally come to an end.
Just thirteen months after an ESPN story broke outlining heinous accusations about the Phoenix Suns owner, Sarver has sold his controlling portion of the team to Mat Ishbia. When the allegations became public, I wrote about the potential ramifications here.
The sale comes three months after the NBA released findings of an independent investigation into Sarver’s history with the Suns. The investigation, conducted by an independent law firm, found many of the accusations to be substantiated. On the heels of the investigation, the NBA fined Sarver $10 million and suspended him from all league activities for a year. However, the NBA did not force a sale of the Phoenix Suns. When questioned why the league didn’t come down harder, Adam Silver cited several reasons his hands were tied from taking further action. My thoughts on how the light punishment protected other owners can be found here.
So that leads us to the final chapter.
Following the punishment, public outcry for Sarver to sell the team heightened. Prominent players such as Suns point guard Chris Paul, and LeBron James tweeted their dissatisfaction with the penalties issued against Sarver.
The backlash and uncertainty became too radioactive for sponsors. PayPal, the jersey patch sponsor for the Suns, threatened to end their corporate partnership with the Suns if Sarver remained associated with the team.[1] It didn’t take long for Sarver to announce he would begin fielding offers to sell his controlling portion of the Phoenix Suns.
Who is Mat Ishbia?
Mat Ishbia is the CEO and president of United Wholesale Mortgage, a mortgage lending company based in Michigan. Ishbia is a former walk-on at Michigan State and won a national championship as a member of the 2000 Spartans. Along with his purchase of the Suns, Ishbia will also become the owner of the WNBA Phoenix Mercury.
Ishbia is well-known in league circles and has a close relationship with NBA commissioner Adam Silver. He reportedly had been seeking an ownership opportunity with the NBA and NFL for several years. Sarver’s reputational destruction seemed to be the golden opportunity Ishbia was looking for.
The Suns are widely considered one of the crown jewels of the NBA. The budding economy of the greater Phenix area, as well as the proximity to Los Angeles and Las Vegas, make the Suns extremely appealing to deep-pocketed individuals looking to own an NBA team. The sale sets a record for an NBA purchase at $4 billion. The previous high was set when Joe Tsai purchased the Brooklyn Nets for $2.9 billion in 2019.
Justin Ishbia, Mat Ishbia’s brother and founding partner in Shore Capital, will make a significant investment in the purchase and serve as alternate governor alongside Mat. The sale will still take some time to be finalized, but both sides have acknowledged the outstanding steps are mere formalities. Ishbia will have to undergo a background check and a vote of approval from the NBA board of governors.
In a statement concluding his eighteen-year ownership tenure, Sarver welcomed Ishbia to Phoenix stating, “Mat is the right leader to build on franchise legacies of winning and community support and shepherd the Suns and Mercury into the next era.”[2]
Takeaways
The book is closed on Robert Sarver and the NBA.
The NBA is pleased to rid itself of the black cloud and quickly transition to Mat Ishbia. But the NBA can learn several lessons from this saga to better position themselves moving forward.
In the last decade, the NBA has had two major scandals involving owners. Donald Sterling was permanently banned from the NBA and after a tumultuous legal battle, his ownership stake in the Los Angeles Clippers was sold in 2014. Both Sterling and Sarver have caused insurmountable strife throughout the league.
Just as the NBA considers players and coaches as representatives of the league, owners must be treated the same. Therefore, owners must be held to a certain behavioral standard that is expected of anyone associated with the NBA. We’ve seen firsthand with Robert Sarver the difficulty of removing an owner from an NBA team. Under Section 13 of the NBA Constitution, a 3/4 vote of other owners is required to remove someone from ownership:
As was the case here, other owners aren’t looking to lower the precedent for removing ownership because it could mean their team is next on the chopping block. So, the NBA had to rely on public pressure and corporate sponsorships to squeeze Sarver hard enough until he “voluntarily” decided to sell. While outside pressure can be a viable formula, the NBA shouldn’t rely on players bashing ownership as a tactic to force a sale. The optics get messy.
In order for the league to not go down this road again, the vetting process for new owners must be extensive. Ishbia seemingly has a clean track record and strong relationships throughout the league so he shouldn’t be a concern. But the NBA must be able to eliminate high-risk ownership candidates at the outset.
Furthermore, one of the troubling aspects of the Robert Sarver allegations was the duration they spanned. Sarver had been involved with the Suns since 2004 and behaved unprofessionally and inappropriately throughout his tenure. There’s no excuse for the league to wait until 2021 when the allegations were made public to investigate Sarver’s franchise. At best the lack of action amounts to negligence. The NBA failed to have any procedures in place to identify the problematic conduct and prevent it from continuing. That must change moving forward.
As the league moves forward, labor negotiations with the Player’s Association around a collective bargaining agreement continue. The players will take note of the eyepopping $4 billion sale price as a sign of the financial success of the league. Phoenix isn’t even considered an NBA market on the level of Los Angeles, New York, and Chicago. If anything, Ishbia’s high purchase price may make the players more money in negotiations.
The new CBA is just one example of how the ripple effects of Robert Sarver will be felt throughout the NBA for years to come.
Matt Netti is a 2021 graduate of Northeastern University School of Law. He currently works as an attorney fellow at the Office of the General Counsel for Northeastern University. You can follow him on Twitter and Instagram @MattNettiMN and find him on Linkedin at https://www.linkedin.com/in/matthew-netti-ba5787a3/. You can find all his work at www.mattnetti.com
Sources:
[1] Jack Stebbins, PayPal threatens to sever partnership with Phoenix Suns if owner Sarver returns, CNBC (last visited Jan. 2, 2023) https://www.cnbc.com/2022/09/16/paypal-threatens-to-sever-partnership-with-phoenix-suns-if-owner-sarver-returns.html.
[2] Adrian Wojnarowski, Mat Ishbia agrees to Suns purchase for record $4 billion, ESPN (last visited Jan. 2, 2023) https://www.espn.com/nba/story/_/id/35292815/sources-mat-ishbia-finalizing-suns-purchase-4-billion.
