Fellow Billionaire’s Exorbitant Losses Resulted in Michael Jordan Bagging Home a $2,975,000,000 Profit

By now, basketball followers are well-educated about Michael Jordan boosting his net worth following the sale of his majority stake in the Charlotte Hornets. As the majority owner, he brought the team in 2010 for a reported $275 million. Just a week ago, he sold his major share for $3 billion, roping in an astronomical profit on his initial investment. However, it seems the story goes much deeper. In fact, His Airness might have made a much more significant gain than the reports claim.

During a recent episode of ‘The Joe Pomp Show’, the host broke down the origin of Jordan’s 2010 acquisition. And it turns out it is a story of ‘one man’s loss is another man’s gain’.

Michael Jordan could only profit because of the mistakes of a former billionaire

Before the Chicago Bulls legend took over, the Hornets were the Charlotte Bobcats. At the top of the management was Robert L. Johnson. The BET founder was the first-ever African-American billionaire. He sold BET for $3 billion to Viacom in 2001 and assumed a life of luxury. However, dealing in businesses “out of his expertise” plundered his enormous empire.

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According to Pomp, Johnson’s Viacom and CBS stocks took a significant hit. On top of that, Johnson also went through an extortionate $400 million divorce. His diversified investments needed a huge load of capital. It came to a point where Johnson had to liquidate his stake in the Bobcats to fill his obligations in other investments. It was a sale for his survival.

Reports claim there was an upcoming debt payment coming up on the Bobcats. This is where Johnson approached Michael Jordan. Already a minority owner, he offered the six-time champion a place as the major owner. The BET founder wanted $325 million. However, the NBA later announced the sale – Jordan brought the team for $275 million. But that figure is ‘inaccurate’ claims Pomp.

He explained on his podcast, “Michael Jordan only put down $25 million in cash… So he essentially said ‘Look, on a cash basis I’m going to put down 25 million dollars on an equity valuation of 170 million dollars. And the remaining 275, so 105 million dollars is essentially debt and other liabilities,”.

Joe Pomp further stated – “The enterprise value of 275 million dollars is correct, but Michael Jordan only put down, reportedly, 25 million dollars on this deal in cash,”. 

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This means Jordan made a whopping $2,975,000,000 profit through the sale of his majority stake in the Charlotte Hornets. It was earlier this year that Robert L. Johnson admitted he regrets ever selling the team to MJ in 2010 on the David Rubenstein Show. However, as things went, it worked out lavishly for His Airness. He might not have had a successful reign as an owner, but there are no disputes – he won the deal.