Big3, the 3-on-3 basketball circuit created by O’Shea Jackson, known professionally as Ice Cube, and Jeff Kwatinetz, has agreed to merge with a special purpose acquisition company as a path to public ownership. The transaction with Graf Global Corp. sets a pre-money valuation of the league at $290 million.
Under the terms announced, all current equity holders in Big3 are expected to have their stakes converted into common stock of the combined entity at the closing of the transaction. The parties anticipate completing the merger in the fourth quarter.
Ice Cube said making the league publicly traded would create a new avenue for fans to share in its financial upside. He said, "You can’t participate in the upside of the team besides winning," and added, "And we need the fans for the league to be successful, so it’s a match made in heaven." Kwatinetz described the listing as broadening access, saying the move "opens the pool of people who can have exposure to our league."
The group of investors backing the deal includes several prominent individuals. John P. Angelos, whose family previously owned the Baltimore Orioles, is among them. The roster also lists Peter Briger, the executive chairman of Fortress Investment Group and a minority owner of the San Francisco 49ers; Drew McKnight, co-chief executive officer of Fortress; and Ken Howery, a co-founder of PayPal and Founders Fund.
Big3 currently fields eight teams. The league itself retains ownership of the Boston, Chicago, Dallas and DMV franchises. Independent investors own the remaining four teams in Los Angeles, Miami, Detroit and Houston. The league's commissioner is Clyde Drexler.
One ownership change noted in connection with the league is the sale of the Houston franchise in 2024 for $10 million. The buyers were Eric Mullins, who now runs private equity firm Lime Rock Resources, and Milton Carroll, the former chairman of CenterPoint Energy Inc.
Operationally, the league is preparing for its ninth season, which is set to begin on June 20 at the Intuit Dome, the arena that serves as the home venue for the Los Angeles Clippers.
Summary
Big3 will pursue a public listing via a SPAC combination with Graf Global Corp., at a pre-money valuation of $290 million. Existing equity holders are expected to convert to common stock on closing, scheduled for the fourth quarter. The league comprises eight teams, with ownership split between the league and independent investors, and will open its ninth season on June 20 at the Intuit Dome.
Key points
- The transaction values Big3 at $290 million pre-money and is expected to close in the fourth quarter - markets and sports investment sectors are directly implicated.
- All existing equity will convert into common stock of the combined company at closing - this affects existing owners and potential public investors in the financial markets.
- The league operates eight teams, with a mix of league-owned and independently owned franchises; season nine begins June 20 at the Intuit Dome - relevant to sports, entertainment, and venue management sectors.
Risks and uncertainties
- The timing and completion of the SPAC transaction remain projections - if the deal does not close in the fourth quarter as expected, ownership structure and market plans could be affected. This uncertainty impacts investors and the financial markets.
- Conversion of all existing equity into common stock depends on closing - until the merger is finalized, shareholders face customary deal-related risks tied to the transaction.
- Operational continuity through the transition to public ownership is not detailed - the league’s business and franchise operations could face execution risks during the merger process, with implications for sports and entertainment stakeholders.