Wes Edens wants to be the newest subprime scion.
Edens — founder of Fortress Investment Group and owner of the NBA’s Milwaukee Bucks — made his third debt-related acquisition in about a week on Tuesday when his lending company announced it was buying Citigroup’s OneMain for $4.3 billion.
The all-cash purchase by Springleaf Financial is expected to close in the third quarter of this year, and would make it the largest consumer-finance company — and subprime lender — in the country, with nearly $14 billion in receivables and almost 2,000 branches throughout the US.
The purchase comes just eight days after two other Edens companies made separate acquisitions of holdings formerly owned by Bill Erbey, the ex-chairman of mortgage servicing company Ocwen, who was recently forced to step down from his position after a two-year investigation.
The fact that a good number of Wisconsin’s elected officials from both parties are bending over backwards to hand over taxpayer dollars to Wes Edens so he can squeeze a greater profit out of the Milwaukee Bucks is absolutely galling, and I say if Wes Edens wants a shiny new basketball arena, he should pay for it himself.
Absolutely! The thing everybody seems to forget is that this isn’t your normal “owner-threatens-to-move-the-team” scenario. If the Bucks move, it would only be after the NBA buys the team and Edens/Lasry wouldn’t really make any money off it. The Sword of Damocles is hanging over Edens/Lasry just as much as the city/state.
Edens/Lasry bought the team in 2014 for $550M. The NBA has an option to buy the team for $575M. The Bucks would then probably be resold for north of $1B, but that profit would roll to the league, not Edens/Lasry. This would likely happen in 2017, so Edens/Lasry’s best case is earning $25M on a $550M investment over 3 yrs = 1.5% annual rate of return. That’s assuming the Bucks aren’t operating at a loss and ignoring their recent investments in hiring more staff, new office space, the logo/uni redesign, etc. Hedge fund managers, and especially ones who are into subprime lending, don’t get out of bed for 1.5%.
The state/county/city has leverage here. It blows my mind that the Bucks ownership proposed a 50/50 split on the arena, and Walker just accepted their opening offer. Walker has zero negotiation skill. His only move is to nuke the bargaining table and that won’t work here (or in many other “presidential” scenarios one could imagine).
Bucks ownership has already said they’re ready to go with hundreds of millions for the area surrounding the arena and $30M for a new practice facility. If they’re so confident the arena will spur development, let them use those funds on the arena itself. And Brewers owner Mark Attanasio has said he’s willing to invest his own money into a Bucks arena, but nobody has bothered to ask him yet.
Buck’s Owner and Slumlord Billionaire wants state and county taxpayers to help foot bill for new arena. Do you feel like you’re getting jacked on both ends?
http://www.commongroundwi.org/media-coverage/2015/01/30/common-ground-shines-a-light-on-wesley-edens-crumbling-foreclosures/
http://www.jsonline.com/news/milwaukee/common-ground-calls-bucks-co-owner-edens-a-slumlord-b99435465z1-290216331.html
Yes the Milwaukee democrats are really eager to run out and hand them 500 million dollars worth of taxpayer money while at the same time the dems cannot control the crime wave and cannot teach our kids to read. Big Bucks for billionaires by the Left again.
You might wanna look at who voted for the Bucks arena in the Senate, because a bunch of REPUBLICANS were all too eager to hand out $500 million in taxpayer dollars.
wi Con digest,
Is Scott Walker a “Milwaukee Democrat?”
Zach, thanks for staying on this.
This has been a “done deal,” since July 6.
“Is Bucks Arena a Done Deal? The way the team’s owners are buying up downtown land, they’re clearly certain the deal will pass.”
http://urbanmilwaukee.com/2015/07/06/plats-and-parcels-is-bucks-arena-a-done-deal/
Dems got zilch in return for these votes.
Will Democrats primary Senators in super safe districts who voted for this?
That’s my biggest complaint. The Dems got absolutely nothing during the budget process. They also proposed some very sensible amendments, all of which got voted down by the Republicans.
Why not refuse to give a vote on the arena for nothing in return? Make the Republicans come back to the negotiating table with something substantive.
I’m not necessarily against a new Bucks arena or re-development of that area of Milwaukee. But when you talk about “cheaper to keep them”, why not apply the same principle to our teachers, roads, UW system, etc?
Our priorities in this state absolutely suck right now, and the Democrats in the legislature and state senate should be playing hard ball in a situation like this.
On Twitter-
“Andy Suchorski @AndySuchorski Jul 14
Andy Suchorski retweeted Border Banter
Thank you @ChrisJLarson @SenTaylor @NikiyaQHarris for your commitment to Milwaukee and the @Bucks”
Milw Dems One Nation. Under GOP.