The Athletic: Joe Tsai got Liberty from MSG for assumption of debt, promise of revenue split

In a story on the WNBA’s future and finances, The Athletic’s Chantel Jennings and Mike Vorkunov reveal that Joe Tsai paid James Dolan essentially nothing — “little new money changing hands” — for the Liberty back in January 2019.

While there has been voluminous reporting on how much Tsai paid for the Nets and Barclays Center later than year — between $3.3 and $3.5 billion— there’s been little on how much he paid for one of the WNBA’s original franchises. Last year, Jabari Young of CNBC.com reported that Tsai paid an estimated $10 to $14 million for the Libs, quoting “sports bankers.”

But on Thursday, Jennings and Vorkunov report that the sale was a distress sale, that Tsai got the team by assuming the Liberty’s debt:

League sources said the Liberty were sold with little new money changing hands and new owner Joe Tsai financing the transaction mostly by taking on debt, as well as stipulating fresh capital for MSG Sports if the Liberty hit certain revenue thresholds. The deal occurred only after the NBA asked several league owners to step in to take over the franchise because it had languished on the market for more than 14 months, sources said.

Jennings and Vorkunov did not provide details on how much debt the Liberty carried — or Tsai assumed. Two years earlier, when Dolan moved the Liberty from Madison Square Garden to the antiquated and much smaller Westchester Center, MSG said the team had “lost money every year since its inception and cumulative losses exceed $100 million.”

As for the undisclosed revenue thresholds Jennings and Vorkunov reported on, it seems unlikely that with the pandemic the Liberty have met them. The Liberty, who moved to Barclays Center last season, are averaging a little more than 4,000 fans a game, roughly 40 percent of what the Liberty averaged in their last year at MSG. (Attendance is up from the 1.757 the Liberty averaged in Brooklyn last season.)

The Jennings-Vorkunov article mainly addressed how the WNBA is at a crossroads, how WNBA Commissioner Cathy Engelbert told them that the league is considering expansion before the 2024 season.

• WNBA expansion could add 2 teams before 2024. Here are 6 possible cities - Chantel Jennings and Mike Vorkunov - The Athletic