So are the billionaires just bickering or could this lawsuit that truly impact the future of the Portland Trail Blazers?
That’s what we need to know.
Alex Bhathal and his sister Lisa Bhathal are picking a fight with someone who could be their future Moda-mate, threatening to derail hard-driving Tom Dundon’s proposed $4.25 billion bid to buy the Trail Blazers by taking a swing at the wealthiest known investors in his proposed ownership group.
Their suit filed in Delaware on Monday seeks to bar Panda Express founders Andrew and Peggy Cherng from participating in the purchase of the team from Paul Allen’s estate.
The Blazers are not named as a party to the suit. Neither is Dundon nor Jody Allen.
But it doesn’t require any legal knowledge to understand who the likely target is here.
The Bhathals came up short in the race to buy Portland’s NBA team from Paul Allen’s estate. It appears they are, for lack of a better term, lovers scorned.
It was no secret that the recently arrived owners of the Portland Thorns and the WNBA’s Fire, who already own a minority stake in the Sacramento Kings, were attempting to fortify their sports holdings in the market with the state’s crown jewel.
But they lost. So why the suit?
That’s the $7.7 billion question.
Are the Bhathals simply seeking a little bit of get-back against the Cherng family after getting burned in the bidding process? Or are they truly attempting to complicate Dundon’s bid and potentially get back in the mix?
Either way, the Bhathals’ lawyers will have to clear a high legal bar to get a friendly judgment.
While specific terms of the lawsuit have yet to come to light, the initial filings point to an exclusivity and confidentially agreement between the Bhathals’ RAJ Sports and Cherngs that RAJ claims was signed on July 24.
Reading between the lines? Sure seems like the Cherngs were at one point on the Bhathals side. Then, it appears, they jumped the fence, helping seal the deal for Dundon.
As we have laid out before, Dundon only needed to pony up 15% of the purchase price, roughly $637.5 million, to serve as the team’s governor. That leaves more than $3.6 billion that he needed to find elsewhere. As an individual investor, Marc Zahr doesn’t have that kind of money. Neither does Sheel Tyle.
Enter the Cherngs and what we might for literary purposes refer to as Panda-monium.
If their investment is at all proportional to their wealth relative to what Dundon, Zahr and Tyle reportedly have, then they are in for a huge chunk of this purchase.
Dundon might have the ability to simply backfill with new deep-pocketed backers if he loses the fast food magnates. In that case, this is merely a squabble between two rich families that won’t ultimately impact Portland fans.
But I think there’s more to it than that.
It doesn’t behoove the Bhathals to look petty in this process. It curries no favor to lay traffic spikes in front of the eventual sale to Dundon. Not in a city that has been desperate for new NBA ownership since Paul Allen died nearly seven years ago and left his sister Jody as the provisional caretaker of an adrift franchise.
RAJ Sports will need to work with the Trail Blazers as co-tenants at Moda Center starting next spring. Going so public with their pursuit of the Blazers reveals that the siblings are ogling opportunities beyond their “global epicenter for women’s sports” mission before their WNBA team even played one game.
So, again, why the suit?
Two things can both be true in this head-to-head battle for the Blazers.
One, that Dundon represents the more credible owner from the standpoint of proven performance. He has turned around a Hurricanes NHL franchise that was a perennial loser before his arrival and shown a willingness to be aggressive that Blazers fans will love.
And two, that of the vying parties, it is the Bhathals who have the greatest incentive to keep the Blazers in Portland.
For many people, the claim by the Allen estate that Dundon’s group “confirmed its intention to keep the team in Portland” was all they needed to hear.
It was good enough for Gov. Tina Kotek, who called Dundon’s agreement with the Allen estate “great news” that secured the Blazers’ “long-term future.” She added: “This legacy belongs to Portland and it’s here to stay!”
Except that feels incredibly premature.
I don’t purport to know Dundon’s true intentions. But there is a costly arena project needed to keep the Blazers here for the long-term, and it is going to take a significant public investment.
How much? Local leaders I talk to are bracing for sticker shock.
At what price are the city and state willing to see Portland’s premier sports franchise leave forever? At what price are their hands tied?
So it is possible to view the Bhathals’ gambit not simply as revenge but as an all-out effort to try to keep the team out of the hands of an owner who might eventually become motivated to look elsewhere.
Far-fetched? It really isn’t.
If Dundon wants to play hardball, and by no one’s account is he a pushover, he could insist that the Rose Quarter is not viable for an arena district, demand an entirely new building and use the threat of leaving Portland to squeeze as much from the Oregon Legislature and City of Portland as he can.
If they don’t meet his terms, he can pack up and move the team to a market like Seattle or Las Vegas, where corporate dollars flow freely. Even with the stain of the SuperSonics exit to Oklahoma City relatively fresh, the NBA isn’t standing in his way if he puts forth a good-faith effort, wink-wink, and Oregon policymakers don’t deliver.
At this point, we have to assume that Andrew and Peggy Cherng are the linchpin to Dundon’s deal.
That is why the Bhathal’s legal injunction is so fascinating.
It feels like they are going for the head of the snake.
There is so much we don’t know about the Bhathals as team operators. They are still relative newcomers to Portland. They still live in Newport Beach, California. Calling them local owners would be a stretch.
They haven’t found their stride with the Thorns. And the Fire sputtered out of the gates with a disastrous hire at the top and a botched brand launch.
My sources believe those optics hurt them in the eyes of the NBA.
But the Blazers leaving would be as disastrous for Bhathals as it would be for Portland and the state of Oregon. Without an NBA team, Portland’s arena quagmire lacks a solution. Without a renovated arena, how invested in Portland is the WNBA really?
Put differently, Dundon might be the best owner for the Blazers, but the Bhathals might have been the best owners for Portland.
I don’t want to assume that Dundon will inevitably use the threat of leaving to strong-arm Portland into the kind of deal it simply can’t make.
I’d like to believe the best about Dundon and trust his stated intentions. But he is still a businessman who will be looking for the best deal. From the city and the state, yes, but if he can’t get that, I worry, from a different city and state.
There is a lot more at stake in the Delaware courts than whether the renovated Moda Center concourse will feature a Panda Express outpost.
Looking a few steps down the line, it could be the difference between Portland having the Trail Blazers and, well…
I can’t even say it.