Meet The New Owners Of The Phoenix Suns, Mat And Justin Ishbia

Mat Ishbia hardly had a future in professional basketball. As a walk-on point guard at Michigan State University, where he rode the bench during the team’s 2000 national title run, he “had to be the hardest working guy to be the worst player on that team” and saw coaching as his lifeline to stay connected to the game, he once told Forbes. That’s all about to change.

On Tuesday, Forbes confirmed an ESPN report that Ishbia and his brother Justin Ishbia had reached an agreement to buy control of the NBA’s Phoenix Suns at a record price that values the team at $4 billion. The WNBA’s Phoenix Mercury will also be included in the transaction.

The Suns and the Mercury had been for sale since September after allegations of racism, misogyny and a toxic workplace centered on controlling owner Robert Sarver had rocked the organization and prompted the NBA to suspend Sarver for one year and fine him $10 million. Forbes valued the Suns at $2.7 billion in October. Sarver purchased the team for $401 million in 2004. If the new deal goes through, it will very likely make Sarver a billionaire. (A representative for Sarver could not be reached.)

Forbes estimates that Mat Ishbia, the chairman and CEO of Michigan-based mortgage lender United Wholesale Mortgage, is worth $4.7 billion. Most of that comes from his 71% stake in the company, which trades on the New York Stock Exchange as UWM Holdings Corp. His brother Justin owns 22% of UWM and is worth $2.1 billion, according to Forbes estimates. Together, the brothers are picking up 60% of the Suns for $2.4 billion, valuing the team at $4 billion, people familiar with the deal told Forbes’ Mike Ozanian. The previous record purchase price for an NBA team was the $3.2 billion Joe Tsai paid for the Brooklyn Nets in 2019.

The NBA’s board of governors will have to vote to approve Mat Ishbia as the new controlling owner, but assuming that doesn’t prove to be a roadblock, the 42-year-old would supplant the Memphis Grizzlies’ Robert Pera and the Utah Jazz’s Ryan Smith as the youngest controlling owner in the league. A representative for Mat and Justin Ishbia declined to comment.

As the billionaire brothers enter the world of pro sports, they have their father to thank for laying the groundwork for what would become their fortune. An attorney by day, but an entrepreneur at heart, Jeff Ishbia launched a variety of endeavors—an alarm business, a title company and, in 1986, a mortgage company. It fit in nicely with his legal services and took little of his time.

Mat had no plans to enter the mortgage business. Fresh off a national title at Michigan State, where he appeared in 48 games over three seasons and averaged 0.6 points per game, he didn’t consider his father’s 11-person outfit all that exciting. But after graduating in 2003, he gave it a shot, at his father’s request. “I went there with the concept that I was gonna be there for six months, a year,” Mat told Forbes in January 2021. “No one likes mortgages. I don’t like them still.”

While things started slow—UWM issued just 45 mortgages in February 2004 and was “barely breaking even” through 2006—Ishbia settled in and decided to stay. The company then caught a massive break during the 2007-08 financial crisis. Unlike powerhouse mortgage firms such as New Century and Countrywide, UWM wasn’t issuing subprime loans. When the bigger outfits collapsed, the Ishbias scooped up the new business and available staff. In 2009, UWM issued more than $2 billion in loans.

It was a turning point. The business had its best year, and Mat’s father asked him what he wanted to do next. “I want to be the largest wholesale lender in the country,” he said. Over the next six years, Mat bought out his dad (who still sits on the UWM board) and grew UWM’s top line without taking on outside money. UWM started issuing more than $1 billion in mortgages monthly and making $100 million in annual profits in 2015.

Then, the pandemic threatened it all. In a bid to prop up the faltering economy, the Federal Reserve committed on March 23, 2020, to buying “unlimited” amounts of mortgage securities. It sent mortgage bond prices skyrocketing, leaving interest-rate-hedging lenders like UWM facing margin calls. Mat turned to Goldman Sachs for a solution, and together they settled on a special-purpose acquisition company. In a SPAC deal, a publicly traded shell company raises capital from investors and puts the money in escrow until it finds a private company to pump the proceeds into. It’s a much quicker, and more controversial, path to going public than a traditional IPO.

In January 2021, UWM sold 6% to a SPAC managed by billionaire investor Alec Gores, raising $925 million at a $16 billion valuation. The deal turned Mat into a billionaire with a net worth of $12.6 billion, and gave Justin a $4 billion fortune.

The public markets haven’t been kind to UWM, however. Since debuting at $11.95 per share in January 2021, the stock price has lost two-thirds of its value, closing at $3.78 on Tuesday. Mat’s fortune, which is mostly tied up in UWM stock, has declined nearly 63%. Justin, who also runs private-equity firm Shore Capital Partners, is down about 48% since January 2021. Given that the Ishbia brothers don’t appear to have billions of dollars in cash, it’s unclear how the deal will be financed.

If they can pull it off, it’s an opportune time to be joining the ranks of NBA ownership. The average NBA team value has grown 15% over the last year, to $2.86 billion, thanks to record sponsorship and advertising revenue, as well as sky-high expectations for the league’s next media rights package. (NBA teams on average have appreciated 1,200% since 2002.) The NBA as a league currently earns $2.66 billion annually from a mix of media deals with ESPN, Turner and ABC—a sum that gets split among the 30 teams. The next package could double that figure.