Mat Ishbia Pledged More Than Half His Company’s Shares To Buy The Phoenix Suns

ByJoey Heldon August 31, 2023inArticles›Sports News

Mat Ishbia made headlines earlier this year when he bought the Phoenix Suns at a valuation of $4 billion. The former Michigan State walk-on has become a billionaire thanks to serving as the chairman, president, and CEO of United Wholesale Mortgage. He has a higher net worth than Michael Jordan and LeBron James combined.

However, the gap between those net worths is closing. Ishbia had to pledge more than half of his UWM shares to be able to purchase the Suns. The stock was worth $4.6 billion, which Ishbia used to back two loans he made mere days before buying the Suns.

Pledging shares means taking a loan against securities you already own. It’s not an uncommon business practice, but it can have an impact on net worth in the short term (and potentially long-term if the move backfires). Ishbia’s net worth dropped an estimated $3.4 billion after he pledged his shares.

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Chris Coduto/Getty Images

Ishbia holds his stake through SFS Holding Corp. SFS owns 94% of UWM’s outstanding stock and pledged 805 million shares for the two loans. Though other CEOs, like Tesla’s Elon Musk , have pledged their shares, it’s rarer to see someone tie up this large of a holding in collateral.

These loans are margin loans, meaning Ishbia will be keeping a close eye on UWM’s stock price. If the value drops, lenders can request that the loan be repaid, or, failing that, they can ask for extra collateral.

Ishbia agreed to purchase the Suns in December 2022 after former owner Robert Sarver was accused of racist and sexist behavior and inappropriate workplace conduct. The deal includes more than a 50% stake in the Suns and the WNBA’s Mercury.

Since purchasing the team, Ishbia fired head coach Monty Williams , who the Detroit Pistons hired and made one of the highest-paid coaches in the NBA. Ishbia also traded Chris Paul in exchange for Bradley Beal , putting together a superteam in Phoenix with Beal alongside Devin Booker , Kevin Durant , and Deandre Ayton .

He’s clearly going all-in on the Suns — in more ways than one.

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Next Season The Phoenix Suns Will Pay Just Four Players A Ridiculous Amount Of Money

ByJoey Heldon June 28, 2023inArticles›Sports News

Earlier this year, the Phoenix Suns shook up the NBA with a massive trade to acquire Kevin Durant . The move didn’t result in postseason success, as the team never fully gelled and lost to the eventual champion Denver Nuggets in the second round.

Now, the Suns are back at it again. They traded Chris Paul , Landry Shamet, multiple second-round picks and a pick swap to the Washington Wizards in exchange for Bradley Beal , Isaiah Todd, and Jordan Goodwin.

The Suns, a team that reached the NBA Finals in 2021, are clearly trying to win a championship before their window closes. Beal joins Durant, Devin Booker , and Deandre Ayton to create an impressive group of stars. Although it’s going to cost the Suns a LOT of money to field this roster.

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Bradley Beal (L) shooting over Devin Booker. (Patrick Smith/Getty Images)

All four players are on max contracts. This upcoming season, the Suns will owe Durant (about $47.6 million), Beal (about $46.7 million), Booker (about $36 million), and Ayton (about $32.4 million). All together, next season these four will earn a collective…

$163 million

Adding to the complexity, the upcoming collective bargaining agreement will impose strict penalties on teams that go over the second apron of the luxury tax. That threshold currently sits at $179.5 million. To avoid going past that number, the Suns will have to figure out a way to split about $16.5 million between ten players.

This isn’t a one-year issue, either. Beal still has $207 million and four years remaining on his contract. Durant has about $149.5 million over three seasons, plus a few extra million in likely incentives. Ayton will make a shade over $102 million in the next three seasons. Booker is in the final year of his deal, but at just 27 years old and still in his prime, the Suns will try to do all they can to retain him.

It’s almost a given that most of the Suns’ bench will consist of players on veteran minimum contracts. The only other players currently under contract are backup guard Cameron Paine; Ish Wainright, who averaged about 15 minutes per game last season; Goodwin, who was productive with the Wizards; and Todd, who’s played 135 minutes total in two seasons.

With the free agency period kicking off on June 30, the Suns probably have more moves to make. If it leads to the first championship in franchise history, all the spending will be worth it.

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