Lamont endorses potential state investment in Connecticut Sun

Gov. Ned Lamont on Wednesday endorsed the potential state purchase of a share of the WNBA’s Connecticut Sun as a savvy investment, not a subsidy of a franchise currently in play for a possible sale and relocation.

“Ask Mohegan Sun whether it was a good investment they made 20 years ago,” Lamont said.

The Mohegan Tribal Nation, the owner of the Mohegan Sun casino, purchased the team in 2003 and relocated it the arena in its casino complex. The tribe paid $10 million and currently is entertaining offers exceeding $300 million.

Lamont and Treasurer Erick Russell discussed the WNBA as a viable investment for a pension fund at a press conference announcing that the state pension funds are outperforming peers, with an annual return exceeding 10%.

“It’s been a very hot area,” Russell said. “This has been a big topic all around the country. We’ve seen other public pension plans that have invested in the space, particularly in women’s basketball.”

Industry newsletters and publications have been noting the interest in sports franchises as an investment over the past year, as one sports law web site reported in July.

“From Undervalued to Unstoppable: The Rise of Women’s Sports as a Prime Investment Asset,” was the headline of a story saying women’s sports are attractive for their lower entry price and high ceiling for growth in value.

House Minority Leader Vincent J. Candelora, R-North Branford, and Rep. Tammy Nuccio, R-Tolland, the ranking member of the Appropriations Committee, criticized Lamont for endorsing what Candelora called “a very high-risk investment with our pension market.”

“In general, investing in a sports team is a very risky proposition,” Candelora said, adding that Connecticut, situated between larger media markets in New York and Boston, has a checkered past when it comes to enticing top-level sports franchises to relocate or remain here.

Nuccio praised Russell’s pension performance but argued that the pension investment should go to safer places.

“We still have a massive amount of pension debt,” she said.

Flirtations with the New England Patriots ended poorly, and the NHL’s Hartford Whalers decamped for North Carolina in 1997 after a quarter-century in Hartford.

But Lamont and Russell said the value of the investment in Connecticut Sun is tied to the steady appreciation of equity positions in franchise ownerships, regardless of their balance sheet or whether they ultimately relocate.

“We’ve got private investors in alongside of us. In fact, junior to us. They like the nature of this investment. They think it’s a really good, solid, long term return for him and for our investors,” Lamont said.

Lamont acknowledged, however, the state’s interest was motivated by a desire to keep the team in Connecticut, either at the Mohegan Sun or the recently renamed PeoplesBank Arena in downtown Hartford. Formerly known as the XL Center, it is undergoing renovations.

The WNBA would have to approve a move to Hartford, but the state and Mohegan tribe have discussed keeping the team at Mohegan Sun, with a portion of the games played in Hartford. Whoever owns the team faces a significant capital cost: The construction of a practice facility.

“I’m trying to keep the Sun in Connecticut,” Lamont said. Noting the role UConn played in the popularization of the women’s college game, he said, “I think they belong in Connecticut, which is a birthplace of women’s basketball.”

A group led by former Milwaukee Bucks owner Marc Lasry, a billionaire who grew up in West Hartford, has made an offer for the team with the intent of keeping it in Connecticut. A Boston group previously made a bid with hopes of relocating it to Boston.

The WNBA, which sees Boston as a future expansion city, reacted cooly to a possible transfer of the Connecticut Sun. Sources say an expansion team in Boston would yield the league a $250 million expansion fee, while a transfer fee was much lower.

The Mohegan tribe is not committed to a sale. Sources say its current negotiating posture is a sale, taking on an equity partner, or retaining a minority equity position while selling a majority interest.

Similarly, Lamont said the state’s approach is flexible.

“We got a proposal out where we would buy the team. We have a proposal out where we buy a portion of the team and leave Mohegan Sun in there [as a partner]. So it depends on where the negotiations go, but we’re still in the game,” Lamont said.

If the state invests, it would insist on being the senior partner, meaning its share would be paid off first in any sale, Lamont said.

Russell said he is not directly involved in negotiations; his role would be to structure any investment to protect the pension fund. He currently has $63 billion in pension assets under the management of his office.

“What we would be looking at is something, if this is where we landed, that would be in the benefit of pensioners,” Russell said. “That is my priority as treasurer, as you see from the returns that we have demonstrated over the last few years.”

CT Mirror reporter Keith M. Phaneuf contributed to this story.