Michele Kang is on her way to wresting control of the Washington Spirit from fellow owners Steve Baldwin and Bill Lynch, according to The Athletic.
Kang has convinced eight of the Spirit’s debt-holders to convert that debt to equity, the report says. In return, those holders would gain the right to vote on the club’s governance issues, which is akin to a potential sale.
The largest of the debt-holders, Devin Talbott, reportedly sold his stake in the team to Kang, leaving her as the club’s majority investor. Kang now owns more shares than either Baldwin or Lynch own individually. The other seven investors reportedly did not sell their stake in the club, but rather converted their debt to equity and are committed to aligning with Kang’s vision for the club.
When combining the investors who are siding with Kang and her new shares, the pro-Kang group within the club would control 52 percent of the votes.
In a letter obtained by the Washington Post to the NWSL’s Board of Governors, Kang said that she would continue to honor her offer to purchase the club at $35 million “for a reasonable time.”
“While Steve could not have legally closed on a sale of the team — over noteholder and owner objections — at a $25M valuation (a 40% discount of my offer), that point is moot,” she wrote. “Steve no longer has control of the team or the ability to dictate the terms of any sale. Steve and Bill may object and force legal action, but the governance issues are clear.”
New: Per a source, here's the full text of a letter sent from Michele Kang to the NWSL's Board of Governors, claiming that Steve Baldwin "no longer has control of the team or the ability to dictate the terms of any sale." pic.twitter.com/AUk7UHAfPz— Molly Hensley-Clancy (@mollyhc) January 11, 2022
New: Per a source, here's the full text of a letter sent from Michele Kang to the NWSL's Board of Governors, claiming that Steve Baldwin "no longer has control of the team or the ability to dictate the terms of any sale." pic.twitter.com/AUk7UHAfPz
Earlier in the day, the Washington Post reported that a group of the Spirit’s minority investors had brought on attorney Beth Wilkinson as legal representation during the sales process. Seventeen team investors issued a letter to Baldwin in December, calling Kang’s $35 million offer superior and threatening legal action if he did not sell to Kang, according to the Post.
Despite this, earlier reports indicated that Baldwin continues to press forward in “exclusive negotiations” with a group led by Todd Boehly and Jennifer Mackesy. NWSL interim commissioner Marla Messing and the NWSL’s board of governors are said to prefer Boehly over Kang.
With the majority voting power, Kang and her group would have the power to block any potential sale.