Minnesota Timberwolves could sell for over $1 billion, but they're saddled with leadership and image problems

A jigsaw puzzle.

It’s how one team front office member described the Minnesota Timberwolves, the latest National Basketball Association franchise to hit bottom and now has the lowest winning percentage in major sports.

The Timberwolves entered the NBA in 1989 for $32.5 million and sold in 1994 to Glen Taylor for approximately $90 million. This so-called puzzle is now worth over $1 billion in 2021 and supposedly up for sale.

The pieces include Taylor feuding with the longtime franchise star Kevin Garnett, an executive, Gerson Rosas, who is wrapped up in his own public relations issue after an unusual hiring. And the Timberwolves roster, the main business attraction, is the other confusing piece and could be on the verge of another makeover.

One big jigsaw puzzle.

“It’s all mixed up,” the front office member said when asked about the team, adding the roster is “trying to play a way that they don’t have a roster for.”

The individual agreed to speak to CNBC on the condition of remaining anonymous as the person isn’t authorized to talk publicly about another NBA club’s affairs.

But NBA commissioner Adam Silver did speak publicly about Timberwolves before last weekend’s 2021 All-Star Game. In 1994, Silver, then chief of staff for former NBA commissioner David Stern, was around for Taylor’s handshake deal to purchase the club.

The league prevented legendary boxing promoter Bob Arum from buying the team for $152 million and possibly relocating it to New Orleans. Taylor, a former Minnesota state senator, stepped in to save the team.

“This is a Minnesota resource. I was afraid it was going to leave the state, so I got involved,” Taylor said in 1994, according to the Post Bulletin.

But since entering the NBA, the Timberwolves have only 988 wins and over 1500 losses. Earlier this month, it overtook the Tampa Bay Buccaneers for the worst winning percentage for a major U.S. sports team. Of the wins, 883 are attached to Taylor’s ownership. And Garnett helped Taylor claim 501 wins since his reign with the team commenced in 1995.

The two have a fractured relationship, and it took another blow after Garnett’s plans to buy the team failed. He used Instagram to announce he was pulling out as a buyer, setting his eyes on possible Seattle and Las Vegas franchises.

Taylor said Garnett never made a bid, and told local media outlets about 10 groups have made offers. Silver said he was “dismayed to read that back and forth” between the two and will use this as “an opportunity to get directly involved.”

One sports banker familiar with offers made for the team suggested Taylor could get approximately $1.3 billion for the club in a Covid-19 market. But whether he’s serious about selling the team is another question.

“He did have some discussions with groups about potentially buying the franchise, and I think Glen has waffled over the years,” Silver said. “I think he both loves owning the Timberwolves and being part of the league, and at the same time, he’s sort of looking out to the future and trying to be responsible for his family and community in terms of next-generation ownership.”

The Timberwolves declined to comment.

The club brings in roughly $200 million in annual revenue, according to Forbes, which also values the team at $1.4 billion. The team has a local TV rights deal with a Sinclair Broadcast Group and is praised for its community outreach initiatives, especially after George Floyd’s death.

But Taylor’s team has image other problems it needs to address.

Saunders, the beloved Flip Saunders’ son, was popular within the organization. His dad coached the Timberwolves to a franchise-best 58 wins in the 2003-04 season with Garnett. And NBA chatter suggests it was Flip who talked Taylor out of selling the team in 2013 just before valuations skyrocketed.

Rosas fired Saunders last month after seven wins this season and hired Toronto assistant coach Chris Finch. The hiring was abnormal and raised concerns for the NBA Coaches Association, as Rosas bypassed Timberwolves assistant David Vanterpool, who is popular among rival players and coaches.

And the roster is anchored around two-time All-Star Karl-Anthony Towns, but NBA scouts point out Rosas’ vision appears to emulate the Daryl Morey-led Houston Rockets with ace three-point shooters, but lacks the personnel. Some in NBA circles suggest trading Towns, who is making $29 million this season, and rebuilding around rookie Anthony Edwards.

With an ownership-franchise star spat, a front office mishap and roster issues, longtime marketing executive Tony Ponturo said corporate sponsors should avoid the Timberwolves.

“Any consumer brand that is tying into a sports sponsorship team is looking to enhance their image and find a way to relate better to their customers in that market,” Ponturo said. “When a team is not doing well, and presumably a team that has not done well for a longtime, one could argue that the image in Minneapolis is not that good. So, associating with that isn’t positive.”

The Timberwolves’ marquee asset is the jersey patch, and the club wants to have it sold before the 2021-22 season. The region is home to big corporations like Target and Best Buy, but Ponturo said marketers shouldn’t overpay to do business with the team, especially with other pro teams in town that are winning.

“If that image you’re associating with is a negative one, or damaged one, you should probably keep your money in your pocket and do something with the Vikings or Twins,” he said. “[Marketers] are better off letting them figure it out and the see in a year if the team has made strides going forward.”

Should a buyer entice Taylor to sell, the new owner will have the Target Center as an asset.

The downtown arena went through a massive $140 million upgrade to make it more modern. Taylor paid $58 million to help cover the cost.  

The building, operated by ASM Global, isn’t the most tech-advanced arena, but it’s admired for its “basketball geometry.” It’s a term used among longtime NBA execs and means the stadium was built to watch basketball games.

“It’s not a pleasing building, and walking into the building from a fan perspective, there is no initial wow factor,” said one team executive who asked not to be identified. “But the fact is when it’s a basketball geometry, it’s just a better building to watch a game in.”

The Target Center’s “backup-housing” – which means it can easily convert to accommodate other events – is also praised. But finding a way to maximize gameday revenue is the challenge.

Before the pandemic, the arena ranked 28th in NBA attendance, according to ESPN. The Timberwolves haven’t finished near the top 10 in this category since the 2003-04 season when Garnett led them to the Western Conference Finals.

But maybe Silver can help steer the Timberwolves in the right direction or find another owner willing to take the reins like Taylor did in 1994. Asked to sum up the current state of this NBA franchise, a former Timberwolves staffer described it as “unfortunate” and lacking direction.  

“I wouldn’t call it a jigsaw puzzle,” the staffer said. “It’s just been a lot of different leaders in a short period of time, and you’re changing directions every five minutes. You can’t win anything like that. It’s just too much inconsistency.”