Phoenix Suns and Mercury majority owner Mat Ishbia, who is the chairman and CEO of mortgage giant United Wholesale Mortgage, pledged more than half of the company's outstanding shares to back two loans before he bought the Suns for an NBA-record $4 billion, according to a report by Bloomberg.
According to Bloomberg, Ishbia pledged stock he controls “currently worth about $4.6 billion” to back loans that were finalized days before his purchase of the Suns was approved. His fortune, which is currently $5.5 billion, dropped by $3.4 billion after the shares were removed from his net worth, Bloomberg said.
While it is not unusual for executives to pledge shares as collateral, the nature of Ishbia's loans are unusual since more than half his shares are tied up as collateral, according to Bloomberg.
“Typically, if the value of the stock declines lenders can request additional collateral or for the loan to be repaid,” the story read. “If the borrower fails to comply, the lender can seize and sell the shares.”
Ishbia's aggressive, high-risk move is something similar to what he has shown as majority owner of the Suns and Mercury. He said in his introductory press conference money follows success, and he has made significant moves to help the franchise try and win its first-ever NBA championship.
The Suns traded assets for stars Kevin Durant and Bradley Beal to create a roster that has four players under maximum contracts, including Devin Booker and Deandre Ayton, trying to win this year. The Suns own just four first-round picks through 2030 and have the least-favorable pick in those years due to deals with other teams.
The same day he was introduced as Suns and Mercury owner, Ishbia traded for Durant in exchange for forwards Mikal Bridges — the NBA's runner-up for Defensive Player of the Year in 2021-22 — Cam Johnson, four unprotected first-round picks and a pick swap in 2028. Ishbia traded Chris Paul for Beal and also gave up Landry Shamet, five second-round picks, four future pick swaps and cash.
Phoenix traded long-term assets in search for success. Ishbia has said the Suns will try and win every year.
“In my business, I’ve never focused on money,” Ishbia said. “…Success is the key. Money just followed. We’re not sitting here focused on money. Nobody cares about money, we’re focused on winning, community impact, culture and fan experience. And guess what happens? A lot of success follows. Money follows success, not the other way around.”
With four max players, the Suns are testing the second apron at $182.8 million. If a team crosses it, it will have significant roster penalties.
The Suns' payroll for the 2023-24 season, $189,053,654, is over the second-apron cap of $182.8 million, per Spotrac.
Ishbia and the Suns are notably paying returning associate head coach Kevin Young over $2 million per year, making him the highest-paid assistant coach in the NBA, according to ESPN's Adrian Wojnarowski.
“To get the best team available, you need to have the best coaches, the best training staff, the best massage therapists,” Ishbia said. “The best, whatever it may be, on the staff, like every aspect, the best security people, every aspect of the organization. And I talked about it in my press conference when I bought the team, money follows success.”
Ishbia and the Suns also implemented a new media rights deal with Gray Television, Inc. (CBS5 and 3TV for over-the-air broadcasting) and Kiswe, a direct-to-consumer streaming device. The Suns lost income from exclusive broadcasting rights with Diamond Sports Group, which owns Bally Sports Arizona, but will bring Suns and Mercury games to a reported 2.8 million homes across Arizona, which they hope will engage and bring more fans to games.
“I've said from day one that our focus is our fans, our community, and every member of our organization and this deal checks every box,” Ishbia said in a statement. “By going entirely over the air and building our own DTC product, the Suns and Mercury will now be accessible to millions more fans in Arizona and globally. Success comes from new and innovative ways to invest in our players, continue our mission to build a world class organization on and off the floor, and make our product available to as many people as possible.”
Ishbia's changes are appreciated by Phoenix. The Suns' previous owner Robert Sarver, notably did not spend money that would have helped the team win a championship in the mid-to-late 2000s. Sarver also was found to have engaged in “conduct that clearly violated workplace standards,” including the use of racially insensitive language, “unequal treatment” of female employees and “harsh treatment of employees that on occasion constituted bullying,” according to a statement by the NBA following an investigation into the Suns' franchise.
The Suns have championship aspirations — they advanced to the 2021 NBA Finals and had a franchise-best 64 wins and the No. 1 record in the NBA in 2021-22 before they traded for Durant and Beal — and an owner whose aggressive habits might pay off. Phoenix is looking to win its first-ever championship with a new coach, Frank Vogel, four stars and a high-caliber staff.
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