ziggy
04-01-2010, 01:27 PM
Link to full article (http://www.thedailybeast.com/blogs-and-stories/2010-03-31/michael-jordan-bails-out-a-billionaire)
When the nation’s first African-American billionaire, Robert Johnson, bought the expansion Charlotte Bobcats NBA team in 2002, his highest-profile move was hiring the most famous athlete in the world, Michael Jordan, to run the team. In a twist thick with irony, the employee has now become the savior: Two weeks ago, Jordan bought the team for pennies on the dollar. The sale underscores Johnson’s dire financial situation. Four sources with firsthand knowledge tell The Daily Beast that the 63-year-old founder of BET desperately needs cash. The Bobcats sale was precipitated by a need for liquidity to fund his other investment obligations and avoid becoming insolvent, according to business associates of Johnson’s and sources involved in the sale.
Indeed, three sources specifically involved with the team sale said Johnson was eager to ink a deal before an upcoming interest payment on the team’s $40 million in bank debt, so he could save the cash, even though it was only for a few million dollars. That, combined with the deal’s terms, suggests that Johnson is dangerously close to being illiquid. Though reports said he initially wanted between $325 million and $350 million for the Bobcats, the NBA valued the deal at $275 million. But that includes the assumption of debt and other liabilities taken on by Jordan. His Airness only paid Johnson a fire-sale price of $25 million cash in the deal, these three sources say. “If he didn’t get out now,” says a former colleague of Johnson’s who asked to remain anonymous because of their prior relationship, “he’d be [out of cash] soon.”
A large chunk of Johnson’s fortune, conservatively estimated at $400 million, was awarded to his ex-wife Sheila in their divorce (she went on to marry the judge who presided over the divorce).
When the nation’s first African-American billionaire, Robert Johnson, bought the expansion Charlotte Bobcats NBA team in 2002, his highest-profile move was hiring the most famous athlete in the world, Michael Jordan, to run the team. In a twist thick with irony, the employee has now become the savior: Two weeks ago, Jordan bought the team for pennies on the dollar. The sale underscores Johnson’s dire financial situation. Four sources with firsthand knowledge tell The Daily Beast that the 63-year-old founder of BET desperately needs cash. The Bobcats sale was precipitated by a need for liquidity to fund his other investment obligations and avoid becoming insolvent, according to business associates of Johnson’s and sources involved in the sale.
Indeed, three sources specifically involved with the team sale said Johnson was eager to ink a deal before an upcoming interest payment on the team’s $40 million in bank debt, so he could save the cash, even though it was only for a few million dollars. That, combined with the deal’s terms, suggests that Johnson is dangerously close to being illiquid. Though reports said he initially wanted between $325 million and $350 million for the Bobcats, the NBA valued the deal at $275 million. But that includes the assumption of debt and other liabilities taken on by Jordan. His Airness only paid Johnson a fire-sale price of $25 million cash in the deal, these three sources say. “If he didn’t get out now,” says a former colleague of Johnson’s who asked to remain anonymous because of their prior relationship, “he’d be [out of cash] soon.”
A large chunk of Johnson’s fortune, conservatively estimated at $400 million, was awarded to his ex-wife Sheila in their divorce (she went on to marry the judge who presided over the divorce).