How a Pair of Hedge Fund Billionaires Bought the NBA’s Worst Team

Can the discipline required to invest in distressed assets be applied to purchasing the ultimate trophy asset – a professional sports franchise? Marc Lasry and Jamie Dinan found that it can, but only to a point, when they bought the NBA’s worst team.

Lasry and Dinan spoke at the Leaders Sports Business Summit NYC 2018 on May 22. Both are described by Forbes as self-made billionaires and feature on a list of the top 25 highest-earning hedge fund managers.

Lasry is the CEO and co-founder of Avenue Capital Group and he has a background in law. Prior to founding Avenue, he was the co-founder of Amroc Investments.

Dinan is the CEO and founder of York Capital Management. He has a degree in economics from Wharton and an MBA from the Harvard Business School.

The two are among the most successful asset managers in the country and they both specialize in distressed debt investments.

I will explain what these Wall Street veterans were surprised to learn from buying an NBA franchise, but first let’s look at how they came to own the Milwaukee Bucks.

Buying the Bucks

In 2014, Lasry and Dinan joined a growing list of Wall Street financiers who have bought a professional sports team. They sought to turn around the struggling franchise, as their investment firms had done repeatedly with debt and equity investments.

The acquisition was a record amount paid for an NBA team. “At the time, the team was making about $10 million a year,” according to Lasry. They bought the Bucks for $550 million, more than 50-times the team’s income.

The massive purchase was remarkable given that the Bucks have only had two conference finals appearances on record, and in 1971 won the only championship in the team’s history.