Mat Ishbia’s declining UWM Holdings stock has raised questions about whether the Phoenix Suns owner could eventually be forced to sell part of his sports portfolio. But based on the available information, a sale of the Suns does not appear to be an immediate or necessary outcome.
Joe Pompliano detailed the financial structure behind Ishbia’s $4 billion purchase of the Suns in his Aug. 19 edition of Huddle Up. Before completing the 2023 acquisition, Ishbia secured loans from JPMorgan and pledged 805 million shares of UWM stock as collateral, according to Pompliano.
The concern is straightforward: UWM’s share price has fallen more than 70% from the level when those shares were pledged, sharply reducing the value of the collateral. If a loan agreement requires a specific loan-to-value ratio, a lender can require additional collateral or repayment when the pledged assets lose value.
That scenario has become more relevant after UWM reported a $600 million loss connected to a failed acquisition and an interest-rate hedge. The company subsequently secured a $1.5 billion capital infusion from Oaktree, with Ishbia’s holding company contributing another $150 million and UWM planning a $400 million rights offering.
UWM also suspended its quarterly dividend, which contributed to a further drop in its share price. Those developments have fueled speculation that Ishbia could face pressure to raise liquidity by selling stakes in the Suns, Mercury or other investments.
However, Pompliano argued that a falling UWM stock price does not automatically mean Ishbia must sell the Suns. The exact outstanding balance on the JPMorgan loans and the full package of collateral securing them have not been publicly established.
Recent filings also suggest that the collateral may extend beyond UWM shares to include future distributions from the Suns and other private-equity assets. UWM said in a statement that claims suggesting Ishbia’s financial position or ownership of the Suns is threatened are “clearly ignoring the facts,” adding that the outstanding loan balance is low enough to be repaid at any time.
Pompliano further noted that Ishbia and his family have received more than $6 billion in distributions from UWM over the past five years, largely through dividends. Ishbia’s personal $150 million contribution alongside Oaktree also provides evidence that he currently has access to substantial liquidity.
The more significant issue may therefore be the health of UWM rather than Ishbia’s ownership of the Suns. The Oaktree financing carries substantial costs, including a 10% annual cash return that can rise to 13% if payments are not made in cash, along with 330 million warrants and significant governance rights.
Meanwhile, Ishbia appears to be moving in the opposite direction of a potential Suns sale. Bloomberg reported this week that he is finalizing a transaction to buy out the remaining Suns and Mercury shareholders, which would increase his ownership stake to 99%.
On the court, the Suns are coming off a 45-37 season and a No. 7 finish in the Western Conference before being swept 4-0 by the eventual conference champion Oklahoma City Thunder in the first round. Devin Booker averaged 26.1 points and 6.0 assists in 64 games, while Dillon Brooks posted a career-high 20.2 points per game.
Phoenix has nevertheless continued to spend aggressively, acquiring Miles Bridges, signing Luke Kennard and retaining Collin Gillespie, Mark Williams and Jordan Goodwin during the offseason. Brooks also agreed to a three-year, $73 million extension.
A forced sale would become a realistic possibility only if Ishbia could not satisfy the requirements of his lenders or needed to generate liquidity that his other assets could not provide. Based on the information currently available, the decline in UWM stock creates financial pressure, but there is no confirmed evidence that Ishbia is close to losing control of the Suns.
