Imagine investing in a sports team, only to find yourself in a bitter legal battle with the new owner over what you believe your share is worth. That's exactly what's happening with the Phoenix Suns, and it's getting ugly. Majority owner Mat Ishbia is now countersuing two minority owners, escalating a dispute that's raising eyebrows across the NBA. But here's where it gets controversial... is it a fair valuation dispute, or something more?
According to a complaint obtained by ESPN, Ishbia alleges that Scott Seldin and Andy Kohlberg, both holdovers from the Robert Sarver era, are demanding an "exorbitant premium" to relinquish their ownership stakes. This countersuit, filed in Delaware State Court, is a direct response to a lawsuit Seldin and Kohlberg filed in August, accusing Ishbia of denying them access to the team's internal records. Access to those records would allow them to better understand the current financial state of the team, and thus, its true value.
To put this into perspective, ESPN reported that the Suns sent a letter to Kohlberg and Seldin in August outlining their demand: a staggering $825 million for their shares. This valuation would peg the entire Phoenix Suns franchise at around $6 billion – a whopping 60% increase from the valuation when Ishbia acquired his controlling interest back in 2023. That's quite a jump in just a couple of years! The Suns, in their letter, made it crystal clear that they believe they have absolutely no obligation to meet this buyout demand.
Ishbia's spokesperson released a statement emphasizing that when Ishbia took the reins of the Suns and Mercury, he clearly communicated his intention to invest heavily in the teams, the fans, and the community. The spokesperson argued that all investors had a clear choice at that point: either sell their shares at a premium or remain invested alongside him. The statement continues, "Andy Kohlberg and Scott Seldin want it both ways. They don't want to invest in the teams, but they are demanding a payday significantly higher than what Mat originally offered, which was still over 20x their original investment. That's not how it works, and we're confident we'll prevail in court." It's a strong stance, painting Seldin and Kohlberg as opportunists trying to cash in without contributing to the team's future success.
As of the time of this report, an attorney representing Kohlberg and Seldin has not yet responded to requests for comment. It's worth noting that the August lawsuit filed by Seldin and Kohlberg is just one in a series of legal challenges facing the Suns. Since November 2024, the team has been hit with six lawsuits, five of which were filed by current or former employees. These lawsuits include serious allegations such as discrimination, retaliation, harassment, and wrongful termination.
And this is the part most people miss... While these employee lawsuits are separate from the ownership dispute, they create a backdrop of potential organizational issues that could impact the team's overall valuation and attractiveness to investors.
During an appearance on ESPN's "NBA Today" on September 24th, Ishbia addressed these lawsuits head-on. "Obviously anyone can file a lawsuit for any reason they want, for anything they want," Ishbia stated matter-of-factly. "How many lawsuits have we actually lost? The answer is zero. How many will we lose? Zero." He then revealed his firm stance on settlements: "The way I look at it a little differently than other people is we don't settle. We don't settle with someone. You want to say, give me $30,000 and I won't file a lawsuit? I say file a lawsuit. We didn't do anything wrong. If we do something wrong, we take care of people, but I'm not going to be leveraged by people." That's a bold declaration, suggesting a willingness to fight every legal battle rather than concede to what he perceives as frivolous claims.
This situation raises some interesting questions. Is Ishbia's refusal to settle a sign of strength and integrity, or could it potentially lead to higher legal costs and prolonged negative publicity for the team? Could the minority owners have a legitimate claim, or are they simply trying to capitalize on the team's rising value under new ownership? What impact, if any, do the employee lawsuits have on the overall situation?
Ultimately, this legal battle will likely hinge on the interpretation of the original investment agreements and the court's assessment of the team's fair market value. It's a complex situation with high stakes, and the outcome could have significant implications for the future of the Phoenix Suns and the relationships between team owners and investors across the NBA. What do you think? Are the minority owners being greedy, or does Ishbia need to pay up? Let us know in the comments below!
