The Chicago Sky's Future in Question: Minority Owner Sues for Alleged Self-Dealing
The Chicago Sky's minority owner, Steven Rogers, has filed a lawsuit against the team's longtime majority owner, Michael Alter, alleging a breach of fiduciary duty and self-dealing. Rogers, an early investor and Englewood native, claims Alter has mismanaged the franchise's value, benefiting himself at the expense of minority stakeholders.
The dispute stems from a series of transactions in 2021, shortly after the Sky won their first WNBA championship. Alter allegedly orchestrated these deals to secure a significant portion of the team's valuation gains for himself, despite his position as the sole manager with near-complete control over the Chicago Sky's finances and corporate entities. This decision, according to Rogers, put Alter's personal interests ahead of the team and other investors.
The lawsuit highlights a complex web of ownership and valuation issues. In September 2022, Alter claimed the stakes of Rogers and other minority investors had depreciated, even as the team's value soared. While Alter eventually revised his valuation, Rogers argues that the majority owner has consistently undervalued minority stakes, despite the Sky's growing popularity and revenue.
The Chicago Sky's journey in the WNBA began in 2006 when Alter joined forces with an investment group, including then-team President and Chair Margaret Stender, to pay a reported $10 million expansion fee. The team's minority ownership structure has remained somewhat opaque, but initial investors included Rogers and prominent locals like Michelle Williams. As the Sky's financial landscape evolved, new investors emerged, such as Nadia Rawlinson and a group led by Cubs co-owner Laura Ricketts, valuing the team at $85 million in 2023.
Despite the Sky's recent success, the cost of WNBA stewardship has skyrocketed. Expansion fees have increased from $10 million in 2006 to a record-breaking $250 million for the three newest franchises. Meanwhile, Alter has faced criticism for struggling to meet basic operational needs, such as player facilities and staffing, as the league attracts more billionaires.
The lawsuit reveals a deeper frustration with Alter's ownership and management. Rogers' claims echo those of former and current players, who have expressed concerns about the team's business operations. The suit describes Alter's tenure as marked by a disregard for basic business standards and minimal agreement requirements, casting doubt on the Chicago Sky's future direction and stability.
