Canzano: Who's at the wheel of the Trail Blazers sale?
“So much is happening behind the scenes.”
On the same day Tom Dundon agreed to buy the Trail Blazers for more than $4 billion, a 68-year-old convicted felon who lives in Arizona sold more than $33 million in Carvana stock.
It was one of more than a dozen recent stock sale transactions by Ernest Garcia II, the biggest shareholder of the used car e-commerce company. Garcia II has liquidated more than $1 billion in Carvana stock since June, according to SEC filings.
He appears to be gearing up for a big-ticket purchase.
The NBA’s advisory finance committee may soon poke around those stock transactions. They’re also likely to be interested in the activity of Garcia’s son, Ernest Garcia III, the CEO of Carvana.
Garcia III has liquidated $175 million in company stock since late May. Multiple sources say the father-son duo is poised to be a substantial investor in the ownership group that aims to purchase Portland’s NBA team.
The NBA Board of Governors will vote on whether to approve Dundon’s ownership bid. That process is expected to take months. One source told me not to expect news until late in the first quarter of 2026.
Meanwhile, there’s growing curiosity about Dundon’s NBA investment group and questions about the potential involvement of Garcia II. It may explain why Dundon has been recruiting other investors to join his bid.
As one source told me: “So much is happening behind the scenes.”
Garcia II was convicted of criminal fraud in 1990 at the age of 33 for the role he played in the Charles Keating scandal involving Lincoln Savings & Loan. He was sentenced to three years of probation and agreed to cooperate with U.S. government lawyers prosecuting Keating. Garcia II also filed for bankruptcy protection.
Garcia II is the son of a liquor-store owner. He grew up in New Mexico and made the golf team at the University of Arizona before dropping out to become a stockbroker. He later became a real estate developer and ventured into the used-car business and auto financing. Forbes estimates Garcia II’s net worth at $21.9 billion.
Like Dundon, Garcia II made the bulk of his fortune in subprime auto loans. They’ve raked in billions by financing used cars for buyers with poor credit histories. Garcia II also owns DriveTime Automotive Group Inc., formerly known as Ugly Duckling.
Dundon is currently the majority owner of the NHL’s Carolina Hurricanes. His teams generate excitement and regularly make the playoffs. He’s also heavily invested in the development of an $800 million mixed-use real estate project around the NHL arena.
Portland fans, mired in ownership purgatory since the death of Paul Allen in 2018, greeted the news of Dundon’s bid for the franchise with enthusiasm. However, as one involved party told me this week, “Until the purchase agreement is signed, there is no official deal.”
Not everything Dundon invests in works out favorably. His involvement with the failed Alliance for American Football resulted in lawsuits. He reportedly agreed to invest in that teetering football league, but later backed out of the deal. Dundon is being sued for more than $180 million.
A former high-level AAF executive told me, “Dundon came along with what was supposed to be a lifeline for our struggling league. Charlie Ebersol brought him in for a league-wide Zoom call, and I could tell by his expressions that he was not all that thrilled to invest in the AAF and basically pulled his funding weeks later.”
The NBA won’t comment about potential ownership structure, Dundon isn’t talking publicly, and the Garcia family maintains a low profile. The timing of the Carvana stock sales by Garcia II and his son doesn’t appear coincidental, however. Multiple sources tell me they’re involved — for now.
The co-CEO of Collective Global, Sheel Tyle, is reportedly part of Dundon’s group. Tyle is based in Portland. His wife, Sejal Hathi, is head of the Oregon Health Authority. Columbia Sportswear CEO Tim Boyle has expressed interest in possibly joining the group.
Lisa Bhathal Merage and RAJ Sports, owners of both the Portland Thorns and WNBA Portland Fire, are potentially out there, too. The Bhathal family makes sense as investors, but it’s unknown if they’re interested.
A handful of other local investors have also had contact with Dundon in recent days. I’ve talked with several of them. Dundon is selling his vision and appears interested in connecting his franchise with the local market.
The Paul G. Allen estate is the seller. Dundon was the high bidder, we’re told. The sales process is being led by the New York investment firm — Allen & Company — which is the gold standard in the industry and was founded in 1920. Messages to the firm have not been returned.
The valuations of the NBA franchises have skyrocketed in the last decade. The Celtics sold for more than $6 billion. The Lakers established a valuation of $10 billion. The spiking valuations underscore the need for larger ownership groups and bigger, more complex transactions.
In 2023, the Qatar Investment Authority bought a 5 percent stake in the Washington Wizards’ parent company. Commissioner Adam Silver said at the time that sovereign wealth funds are allowed to own no more than 5 percent of an NBA team.
In June of this year, the Buss family agreed to sell its majority stake in the Lakers to Mark Walter for $10 billion. Walter is the CEO of TWG Global Holdings. Two months earlier, TWG announced a $10 billion investment from Mubadala Capital, the asset manager arm of the $330 billion Abu Dhabi sovereign wealth fund.
In 1990, Garcia II admitted that he fraudulently obtained a $30-million line of credit in a series of transactions that helped Lincoln Savings & Loan hide its ownership in risky desert Arizona land from regulators.
Federal prosecutors said he served as a “straw borrower” who helped hide the true ownership of 1,000 acres of desert land outside of Phoenix. In court, Garcia II said in a prepared statement that he entered the plea “with tremendous feelings of remorse.”
Will the other NBA owners be uneasy with a convicted felon’s potential involvement with ownership of the Blazers? Or will they only care that the franchise sold for $4.25 billion? Who is the actual investor here? Garcia II? Or his son, who has a net worth of $10.4 billion? Both? Neither? Like the sovereign wealth funds, will the investment be fogged up? Is this another “straw” situation?
More than one source told me that they found it peculiar that the news of Portland’s sale leaked in the way it did. It was almost as if Dundon’s bid for Portland’s NBA team was being publicly floated to attract other investors. Meanwhile, Garcia II was busy posting a series of strategic sales transactions with his Carvana stock.
Garcia II’s most recent 10 transactions:
$33.5 million in Carvana stock was sold on July 30.
$36.8 million sold on July 31.
$39.8 million sold on Aug. 1.
$36.2 million sold on Aug. 4.
$36 million sold on Aug. 5.
$35.1 million sold on Aug. 6.
$35.9 million sold on Aug. 7.
$42.7 million sold on Aug. 11.
$28.7 million sold on Aug. 12.
$33 million sold on Aug. 15.
Dundon’s ownership bid is taking shape. It feels equally promising and curious. On one hand, he has proof of performance with his NHL franchise. On the other hand, there are questions about how much of his own money will be in the deal and where the rest is coming from.
I am really considering becoming a felon. Seems the way to go. Hell, now I could even be president of the USA as a convicted felon.
Nothing in this column today gave me a good feeling. Great content and write up but bad news all around.