UWMC UWM Holdings Corporation

By Ben Eisen 

Call it a different kind of March Madness.

Michigan State University's Spartans are seeing millions of dollars come through the door, the money flowing from two mortgage titans long locked in a battle for loan volume and name recognition. A key beneficiary is the men's basketball team, which plays tonight in the NCAA tournament.

On one side of the off-court feud is Detroit-based Rocket Cos., the parent company of Quicken Loans. Founded in the 1980s by MSU alum Dan Gilbert, Rocket is now the biggest mortgage lender in the U.S. and Mr. Gilbert is the owner of the Cleveland Cavaliers.

On the other side is Pontiac, Mich.-based United Wholesale Mortgage, which has been hot on Rocket's tail. CEO Mat Ishbia, a former walk-on to the MSU basketball team, has grown the company by issuing loans through an army of brokers. It was the No. 4 mortgage lender in the U.S. last year, according to industry research group Inside Mortgage Finance.

Both say their recent commitments to the university were motivated by nothing more than their loyalty to MSU and its athletics. Still, the optics are a reminder of their brawl outside the arena.

Last month, Mr. Ishbia made a $32 million donation to the athletics department. "When you're successful in life and you can give to people who helped you do it, you do it," he said in a recent interview.

A few weeks later, he caused a stir in the mortgage world when he publicly accused Rocket and another company of trying to put mortgage brokers out of business. Mr. Ishbia told the thousands of brokers that work with United Wholesale that they couldn't also work with Rocket, and asked them to sign a document saying so.

Rocket fired back in a letter, saying its success was putting United Wholesale on defense and urging brokers not to be "bullied."

"If you feel you have no choice but to sign UWM's addendum, you will be signing away your freedom," the letter from Rocket executive Austin Niemiec read.

Last week, Rocket announced it had expanded its existing sponsorship of the Spartans. As part of the new five-year deal, the men's basketball team will be labeled in its arena as "MSU Spartans Presented by Rocket Mortgage." Rocket's name will also be on the basketball team bench and the football coach's headset, "making the company synonymous with Spartan athletics," the announcement from MSU and Rocket said. The amount of the sponsorship deal wasn't disclosed.

The next day, the school issued a statement clarifying that "Michigan State is not renaming its men's basketball team."

Mr. Ishbia told the Detroit News that he hoped Mr. Gilbert would "one-up my $32 million donation" and donate $33 million.

Mr. Gilbert, who earned his real-estate license while still an undergrad at MSU, gave the university $15 million in 2016. Rocket CEO Jay Farner is an alum as well.

Rocket declined to make Mr. Gilbert available for an interview. A spokesman said the company is proud to have extended its sponsorship of MSU, and that the agreement had been in the works for a long time. "Our decadelong partnership has benefited the university, its student body and athletes alike," the spokesman said. "We are honored to serve as the presenting sponsor of the men's basketball team as we look to recruit more MSU grads to the great city of Detroit."

Mr. Ishbia played for coach Tom Izzo in 2000, when the Spartans won the national championship. He was a third-string point guard. He got about 45 seconds of playing time in the final game and took the last shot, which he missed.

Mr. Ishbia said his job was to push superstar Mateen Cleaves every day in practice and help get the starters ready for the games. He has since hired Mr. Cleaves to work at the mortgage company.

Any funding that goes to Michigan State, Mr. Ishbia said, makes him happy -- even if it means his chief rival's name is plastered across the arena.

"I'm not going to say it's my favorite sponsor of Michigan State," Mr. Ishbia said. But, "they try to get their name out and that's part of their business, and I respect their business."

A spokesman for the university athletics department, without referring to Rocket or Mr. Ishbia, said: "Michigan State Athletics couldn't compete at the highest levels without donors and corporate partners. We take great pride in having alums who are loyal to our University and our department, and who support us in our championship aspirations."

MSU said Mr. Izzo, a revered figure who is still the coach, wasn't available for comment because of the game. MSU plays UCLA tonight in a "First Four" game, with the winner joining the main 64-team field.

In many ways, Messrs. Gilbert and Ishbia are more alike than either might care to admit. They both rank on lists of billionaires, though Mr. Gilbert ranks higher. They live near each other in Detroit suburbs in the same county. Mr. Ishbia graduated from MSU in 2003 and Mr. Gilbert in 1983.

Both are known for aggressively expanding their businesses, and both took their companies public during the pandemic.

United Wholesale, which trades under the name UWM Holdings Corp., went public in January in the largest listing to date through a special-purpose acquisition company, or SPAC. Rocket was a meme stock popular among Reddit traders earlier this month.

Before Covid, Mr. Ishbia encouraged weekly 3 p.m. dance parties at company headquarters, and they have continued virtually with a DJ over the past year. For holiday parties, he has brought in Boyz II Men and the DJ duo Chainsmokers to rev up the staff.

At Rocket, employees have used two office basketball courts and adorned their desks with larger-than-life likenesses of their faces made by Fathead Inc., a company once owned by Mr. Gilbert that makes giant wall decals featuring professional athletes.

Both companies have run Super Bowl advertisements in recent years. Last year, United Wholesale took what looked like a shot at its crosstown competitor. "Playing with rockets is great when you're a kid," the ad's narrator says over a child playing with a toy. "But when it's time to get a mortgage, you quickly realize that a rocket is complicated and expensive."

After Mr. Ishbia's ultimatum to mortgage brokers, both companies claimed victory. United Wholesale said that a "staggering majority" are aligned with it and against Rocket. Rocket's spokesman, meanwhile, said that its platform for brokers "has already grown its market share since UWM announced it will no longer compete with us."

Write to Ben Eisen at ben.eisen@wsj.com

(END) Dow Jones Newswires

March 18, 2021 14:08 ET (18:08 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.