Timberwolves owner Glen Taylor has said if he is going to sell the franchise, the new owners must commit to keeping the team in Minnesota.
Taylor has some help in trying to hold any potential new owner to that promise: the agreement he made in 2016 with the city of Minneapolis for the continued use of Target Center, and the financial penalty that comes with breaking that agreement.
In 2016, Taylor Corporation and the city of Minneapolis signed a second amendment to the original agreement they made when Taylor took the team over in 1995.
That amendment, signed in light of renovations both parties contributed toward for Target Center, said the Wolves would agree to play there through the 2034-35 season.
Section 3 of that agreement, obtained by the Star Tribune, says Taylor Corporation agrees to pay $50 million to the city if it does not fulfill that obligation to play its home games at Target Center before the end of the 2034-35 NBA or WNBA seasons.
For reference, Taylor is reportedly asking for around $1.2 billion in the sale. A $50 million penalty equates to about 4.2% of that price.
A city spokesperson confirmed those would be the damages owed the city, and that responsibility would transfer to new ownership. The latter is spelled out in Section 8.03 of the original agreement signed in 1995.
In other words, if new owners tried to move the team before 2035, they would owe Minneapolis $50 million.
It’s unclear if that agreement also applies to the Lynx remaining at Target Center through 2035. Taylor also owns the four-time WNBA champions and has said he would prefer to sell the Wolves and Lynx in the same deal.
Taylor may insist on other covenants as part of a sale, such as a set term on how long the new owners must keep the team in Minnesota or additional financial. But legal experts who spoke to the Star Tribune recently said any covenants could not be overly restrictive or they may not pass NBA approval or hold up in court.
It’s also not guaranteed that a court would ultimately enforce the $50 million covenant though one legal expert said the contract appears to be written in such a way as to avoid objections to enforcement.
The city also holds the right to review information from the potential new owners to evaluate their financial ability to operate the team and adhere to any obligations with the city.
Since Taylor confirmed he was courting offers to sell the team through merchant bank Raine Group, multiple interested buyers have stepped forward.
Kevin Garnett said he was affiliated with a group attempting to buy the team. The Associated Press reported a group that features former NBA veteran Arron Afflalo was planning to make a bid while ESPN reported minority owner Meyer Orbach was preparing a bid. Bloomberg.com reported The Straus Group, a New Jersey-based firm, is also exploring a bid. Taylor and the Wilf family, which owns the Vikings, had dialogue, but sources said last week those talks were not active.
Taylor told the Star Tribune there was one family from out of state that was farther along in the process of buying the team than others.