(Bloomberg) — Connecticut is considering offering up public pension funds to keep the WNBA’s Sun team in the state.

Governor Ned Lamont is backing a proposal for the state pension system, which manages $63 billion in assets, to buy a minority stake in the franchise. Such a move is rare for a public fund.

“We’re still in the middle of these negotiations right now,” Lamont said last week in a press conference on pension fund performance. “We have a very competitive bid out there for the Connecticut Sun. I think they belong in Connecticut.”

Lamont declined to confirm how large a stake the state might take, but said a private investor with NBA experience would join the bid — though he said the state would have priority in any payout. 

State Treasurer Erick Russell, who oversees the fund, said protecting assets is his main focus. “In any deal that involves the pension fund, my priority would be making sure that we’re getting the best risk adjusted returns for pensioners,” he said in the press conference. Russell did not confirm whether a formal investment review has been completed.

The Connecticut Retirement Plans and Trust Funds returned about 10.14% for fiscal 2025, exceeding expectations of 6.9%. Yet the system remains underfunded compared with many states; 63.5% of its liabilities were covered at the end of 2024 — up from 36% in 2016 — according to data from Equable Institute, a bipartisan nonprofit that studies complex pension funding challenges.

Anthony Randazzo, Equable’s executive director, said the value of WNBA franchises may rise but called Connecticut’s proposal for the Sun “the mistaken, though understandable, instinct to leverage public employee retirement funds for local economic investment.”

The Sun, owned by the Mohegan Tribe, announced earlier this year it was exploring investment options including a sale. 

The team received two bids. One came from Boston Celtics minority owner Steve Pagliuca in a deal that valued the team at a record $325 million and would relocate it to Boston. The other came from Avenue Capital’s Marc Lasry who offered to move the team to Hartford, about an hour from its current home in Uncasville. A representative for Lasry declined to comment.

Neither offer has been approved, with some Connecticut officials suggesting that the WNBA interfered in negotiations. The league has also offered to directly buy the Sun for $250 million, which would allow it to relocate the franchise to a market of its choice. Connecticut’s proposal would value the team higher than the WNBA’s offer.

In a Sept. 8 letter, Senator Richard Blumenthal warned the league that “any attempts by the WNBA to block efforts to keep the Sun in Connecticut could violate federal antitrust laws.” Days later, the state’s attorney general, William Tong, followed with his own letter to WNBA Commissioner Cathy Engelbert requesting the league provide documents related to the potential sale.

The NBA and WNBA have set rules around private equity, sovereign wealth and pension funds investing in teams, with a limit of 20% ownership in a single club. While there have been both private equity and sovereign wealth investments, a state-run pension fund would be rare. Any investment, however, would have to be approved by the league’s board of governors.

Team sales and relocations also must be approved by the league’s board of governors, the league said in a statement. 

“Relocation decisions are made by the WNBA Board of Governors and not by individual teams,” per the statement. “As part of our most recent expansion process, in which three new franchises were awarded to Cleveland, Detroit and Philadelphia on June 30, 2025, nine additional cities also applied for WNBA teams and remain under active consideration.”

No groups from Boston applied for a team at that time and those other cities remain under consideration based on the extensive work they did as part of the expansion process and currently have priority over Boston, the statement said.

In Connecticut, the treasurer is the sole fiduciary responsible for overseeing pension funds investment. Oversight of the treasurer comes from a chief investment officer and a 12-member advisory council, with five union representatives. Lawmakers earlier this year rejected a bill that would have replaced it with an independent investment board.

Some lawmakers are concerned the proposal is an economic development gambit. Ryan Fazio, a Republican state senator who co-sponsored Senate Bill 1557, said the Sun proposal “is not being motivated by maximizing returns for state employees, retirees and taxpayers.”

It “subsidizes a certain type of corporate activity in the state that is not what the state employees and retirees’ pension funds and the Treasurer’s office exist to do,” he said. “That is what the legislature and Governor’s office have traditionally the powers to do.” 

Others are more open. State Senate Majority Leader Bob Duff said he hasn’t seen details of the plan but that the investment is worth exploring.

“What it comes down to, really, is what gives us a good rate of return,” he said in an interview. If Russell “is looking at it, if he thinks it’s a good deal, he’s the one in charge of getting us a good rate of return, then that’s what matters.”

More stories like this are available on bloomberg.com