Visits: 2
Joshua Kushner, the venture capitalist whose older brother is President Trump’s son-in-law and senior adviser, became a minority shareholder of the N.B.A.’s Memphis Grizzlies earlier this season, according to four people familiar with the matter.
Jesse Derris, a spokesman for Joshua Kushner, confirmed the purchase, as did a spokesman for the N.B.A.
“Brandon Arrindell and Joshua Kushner recently, in their respective individual capacities, purchased minority stakes in the Grizzlies,” said a team spokesman in a statement.
Kushner, 33, agreed with Grizzlies owner Robert Pera to purchase a share of the team as a limited partner in late 2018, according to two of the people, who weren’t authorized to discuss the partnership publicly. The transaction closed at the end of February.
Neither Jared Kushner, the president’s son-in-law, nor his father, Charles, who spent 14 months in prison for illegal campaign donations, tax evasion and witness tampering, is involved in the Grizzlies, according to the people. However, Joshua Kushner’s wealth can be traced to his family’s real estate fortune, which funded other investments he has made. Members of the Kushner family have previously lodged unsuccessful bids to buy the Miami Marlins, Los Angeles Dodgers and the Nets when the team was in New Jersey.
According to The Daily Memphian, which first reported the agreement, Brandon Arrindell, a principal at a Memphis investment management firm, also purchased a stake in the team.
The Kushner investment comes at a time when the relationship between top N.B.A. players and the White House is increasingly tense. No N.B.A. team has visited the White House since Trump became president. The N.B.A. superstars LeBron James and Stephen Curry have engaged in public spats with Trump; James has referred to him as “a bum.”
Joshua Kushner’s politics are very different from his brother’s. Joshua Kushner is a lifelong Democrat and said he did not vote for Trump in 2016. He participated in both the first Women’s March and the March for Our Lives protests.
The Kushners, especially Jared, have close ties to N.B.A. Commissioner Adam Silver. Silver attends sporting events with Jared Kushner, he told The New Yorker, and Kushner advised the N.B.A. on a real estate search. Kushner, who owned The New York Observer before selling it to his family’s trust, also once ordered the deletion of a benign article about Silver purchasing a new apartment, according to BuzzFeed.
Joshua Kushner is a mainstay of the New York tech scene, founding the investment firm Thrive Capital, which has $2.5 billion under management, and cofounding Oscar Health, a health start-up. He was brought into the Grizzlies ownership group by Pera, who is also part of the New York tech scene. The deal stemmed from an unusual arrangement Pera had with previous limited partners of the Grizzlies.
Pera agreed to purchase the Memphis Grizzlies from Michael Heisley in June 2012 for $377 million. Pera was 34, and made his wealth as the founder of Ubiquiti Networks, a New York-based wireless technology company. He founded Ubiquiti in 2005, and took it public in 2011.
But Pera, despite holding a controlling interest in the Grizzlies, purchased only about 25 percent of the franchise and put up just $45 million of his own money, according to The Memphis Flyer. Pera put together a large ownership group to pay for the rest. Steve Kaplan, a Los Angeles investor, and Daniel Straus, the founder of multiple health care companies, each bought a stake worth roughly 14 percent, while a consortium of more than 20 local investors bought the rest.
The agreement between Pera, Kaplan and Straus included an unusual buy-sell clause that allowed both Kaplan and Straus to exercise a right to purchase control of the team after five years. Once exercised, one or both of the limited partners could set a new valuation for the franchise. At that price, Pera had to either buy their shares or sell them his.
In November 2017, both Kaplan and Straus triggered the clause. After negotiations between the three were unsuccessful, Pera announced in April 2018 that he would retain his majority ownership. ESPN reported he had bought his former partners out at a $1.3 billion to $1.4 billion valuation of the franchise.
That meant Pera was forced to raise roughly $375 million — about the same amount the entire team was valued at in 2012 — to purchase the Straus and Kaplan shares. It seems he brought on minority investors to help shoulder that financial commitment.
The Grizzlies have slumped to a record of 29-42 after a promising start and will miss the N.B.A. playoffs for the second consecutive season. In February, Memphis traded its former All-Star center Marc Gasol to Toronto and is widely expected to trade the last remaining link to the club’s playoff successes — Mike Conley — in the off-season.
