Chicago Sky ‘Self-Dealing’ Suit Is Reminder of WNBA’s Painful Past

Chicago Sky majority owner Michael Alter is being sued by one of the team’s original investors, Steven Rogers. 

In the suit filed Jan. 28 in Cook County circuit court, Rogers alleges Alter engaged in “self-dealing” that reduced the value of minority investors’ stakes in the WNBA club. A week after the suit’s original filing, Rogers—through Rogers Smith Partnership—remains the only minority investor publicly accusing Alter of financial mismanagement. 

Alter founded the team in 2005 by seeking out a collection of investors in the Chicago area. The entire list of original investors has never been fully released, but sources told Front Office Sports it includes the singer Michelle Williams, Michael Jordan’s ex-wife Juanita Vanoy Jordan, and local businesspeople Margaret Stender, Sue Wellington, Linda Friedman, and Rogers, among others. The entire investor group—operating as Chicago Women’s Basketball Investment LLC—paid an expansion fee of $10 million, and Alter was the lead investor. 

“What was very clear is it was not an investment that expected a return,” one of the team’s original investors told FOS. “The league was failing. It was going to be more of a civic duty. A civic interest.” 

Another suggested that because of the size of the investor group, opinions varied on expectations for a return. 

Between 2002 and 2009, nine WNBA franchises either folded or were relocated as the league struggled financially. 

Multiple sources—including original investors with access to the team’s financial records—estimate to FOS that Alter invested tens of millions of dollars to keep the team afloat across its 20-year history. Along the way, original investors were not obligated to invest more money to help Alter cover losses, according to these same sources; however, some did. 

“We are aware of the lawsuit filed last week by an early Chicago Sky investor,” Robert A. Chapman, Alter’s lawyer, said in a statement. “The lawsuit is completely meritless. We look forward to defending our case through the appropriate legal channels and believe this matter will be disposed of quickly. This matter will not affect the Sky’s operations. Because this is active litigation, neither Mr. Alter nor the Chicago Sky will be commenting further.”

Multiple Sky investors told FOS because of the overall financial state of the WNBA and reported team losses across the country it was difficult to raise capital from outside parties. 

Alter’s successful pursuit of new capital, which resulted in a 10% stake being sold at an $85 million overall valuation in 2023, began roughly a year before. During this time, multiple investors told FOS they were provided detailed information regarding how the raise would work and its impact on their stakes. Existing investors were given the opportunity to increase their investment. 

The team’s new investors included Cubs co-owner Laura Ricketts, Foot Locker CEO Mary Dillon, and NBA champion Dwyane Wade. Early investor John Rogers—no relation to Steve Rogers—and team chairperson Nadia Rawlinson both made additional investments. This new group of investors is defined as The New Sky Investor Group LLC. 

It was around this time, on the heels of the team’s first WNBA title in 2021, that Steve Rogers alleges the “financial fortunes of WNBA teams changed.” 

Ticket sales went up in the wake of the title; the easing of COVID-19 pandemic restrictions also boosted business across the league. However, there still was a level of uncertainty over the sustainability of the rising valuations of the league and its teams. In 2022 the WNBA sold a 16% stake in the league to a group of investors for $75 million, which four years later appears to have significantly undervalued the league. (The WNBA is now exploring the possibility of buying that stake back.)

According to the lawsuit, it was during this time that Alter “orchestrated a series of transactions to claim a significant portion of the Chicago Sky valuation gains for himself.” Because of redactions in the suit, the specifics of how precisely Alter “violated his fiduciary duty” and “shortchanged his fellow investors” are unclear. 

“We have no public comment beyond the filing, at this point,” Charlie Wysong, a lawyer at the firm representing Rogers, told FOS. 

Multiple original investors told FOS they believe Rogers’s allegations are related to a conversion of debt into equity that effectively expanded Alter’s ownership control. There are investors who believe the details of this conversion were properly communicated to shareholders. However, other investors believe there was no knowledge of a convertible security, and they were only made aware of it through the process of the 2023 capital raise. 

Rogers’s lawsuit says that in September 2022, Alter made a claim “so outlandish” about the minority stakes that Rogers “immediately disputed it.”

One investor said that this dispute came down to a difference in opinion on calculation methods, and the suit says that Alter eventually “reversed course.” 

“In any business there are times when debt is converted into equity,” a partner of a large sports law firm in New York City told FOS. “That’s a business judgment as to when it’s appropriate to do so. It’s dependent on what the terms of the debt are, was the debt current. Converting debt into equity, which is a fairly common procedure, in and of itself doesn’t say anything. 

“Whenever you convert debt into equity, you have to value the business. The question is: Was it valued appropriately?” 

The WNBA did not respond to a request for comment. 

The history of the Sky is complex and does include operational failings by Alter that became more glaring as billionaire owners began to buy into the WNBA. 

Sylvia Fowles’s forced trade in 2015 made her the first in a long line of superstars who asked out of Chicago for a variety of reasons. In 2017, Elena Delle Donne demanded a trade that netted future 2021 WNBA Finals MVP Kahleah Copper and All-Star center Stefanie Dolson, along with draft capital. Both were key pieces in the Sky’s 2021 championship run. 

In 2023, the Sky experienced a mass exodus of their championship-winning roster in free agency. Candace Parker signed with the Las Vegas Aces, Courtney Vandersloot signed with the New York Liberty, and Azurá Stevens signed with the Los Angeles Sparks. Not even halfway through the season, coach and GM James Wade left to take an assistant job with the Toronto Raptors. 

The last to leave from the title team’s starting roster was Copper, who asked to be traded in 2024. 

“I used to say, ‘It doesn’t matter where I practice. I’m a hooper,’” Copper said in 2024. “But that shit matters. When you experience [a professional environment], it alleviates pressure and problems [in] other places.” 

Beyond players’ issues with the franchise, multiple team sources—past and present—felt over the years that Alter cut corners when it came to investment into staffing and other resources. Many believe that the 2021 title validated Alter’s limited spending on infrastructure, because he felt they could continue to win without making substantial changes. 

The Sky’s efforts to keep up with the facilities arms race and billionaire-backed franchises continues to come into question. In 2024, the franchise announced the development of a dedicated practice facility near Midway International Airport in partnership with the village of Bedford Park. The franchise will not own this building, but instead will be tenants as the village is largely responsible for subsidizing the project. 

The project was originally slated to open in late 2025 but has been delayed. 

“A harsh winter slowed progress, but we still expect the practice facility to be operational by late spring,” Sky president and CEO Adam Fox told FOS.

According to public documents, the village of Bedford Park’s agenda for multiple meetings over the last week included reviewing its contract with the Sky and the approval of the guaranteed maximum price of the project.