There will never be another Jay Z, at least in NBA circles. Until he became a certified agent and had to sell his stake, the rap superstar owned a miniscule (like, under one percent) stake in the Brooklyn Nets and was routinely trotted out as the face of the franchise. According to a new report, the NBA has passed a new rule limiting such in-name-only owners: each team can now have no more than 25 individual owners, and each owner’s stake must be at least one percent.
From Grantland’s Zach Lowe:
The league had been contemplating the change for years, sources say. The new Bucks’ ownership group may have provided the final impetus. Marc Lasry and Wes Edens, two of the three largest stakeholders in the team, are among 37 individuals who own some portion of the Bucks, per league sources. Both Lasry and Edens sold small chunks of the team to friends, family members, and prominent members of the Milwaukee community — a key method of gathering support for a new arena.
Owners for decades have sold small pieces of their teams to friends and colleagues, including stakes that amount to less than 1 percent equity — and could cost in the mid- to low-six-figures, per several league sources. Those with such little equity usually don’t get any of the biggest perks of owning an NBA team. They don’t get a seat at the Board of Governors or any real say in the team’s big basketball- or business-related decisions. Some even have to scrounge for tickets if they decide at the last minute they’d like to attend a game.
The league’s reasoning for this move is sound — as the new influx of TV money comes in, the prices of NBA franchises are only going to climb higher. They want to keep those allowed at the ownership table to people who are more seriously invested.