Before we get to Mark Walter’s stunning sale of the Lakers just 14 months after he bought them, here’s some history.
The franchise we now know as the Los Angeles Lakers originated in 1946 as the Detroit Gems, a basketball team launched as a promotional vehicle for a jewelry store. The team went 4-40 in its first (and only) season in the National Basketball League, which would eventually merge with the Basketball Association of America to form today’s NBA. And it was sold after that season to Minneapolis investors for – get this – $15,000.
Sid Hartman, a sportswriter for the Minneapolis-Star Tribune, helped broker that deal for a pair of Minneapolis businessmen and then served as ex-officio general manager of the new Minneapolis Lakers for a time. “For $15,000, you could buy about anything in those days,” said Hartman, who remained a sports columnist and talk show host in the Twin Cities up until his death in 2020.
First reaction: The concept of multi-tasking was certainly different way back when.
Second reaction: If the inflation calculator I’m using is correct, that $15,000 sale would translate to $224,608.52 in today’s dollars. That, my friends, is a long way from the $12.5 billion for which the Lakers are about to change hands again.
And my third reaction: What else is there about this deal that just seems … well, off?
It was so sudden, without any bidding process or even any inkling that Mark Walter was interested in selling his majority interest in the Lakers to former Disney boss Bob Iger and Joshua Kushner, a little more than a year after purchasing it at a then-record valuation of $10 billion. When the news of the deal and the $12.5 billion purchase price broke Wednesday morning, it was a true bombshell.
And the way it played out gave the impression of a transaction made of desperation or panic, given the issues that Walter faces with federal regulators involving loans from the insurance companies he owns.
In fact, Bloomberg’s Sridhar Natarajan and Zachary R Mider reported Thursday that Walter, who had been in talks with investors to raise money to help pay down the loans that had drawn the attention of the Justice Department, had offered up his stake in Guggenheim Partners LLC as collateral, even after completing the Lakers’ sale. Meanwhile, Front Office Sports’ Ben Horney reported that the sale was directly connected to the investigation, quoting one source as saying, (The) expedited process screams liquidity crunch.”
So you had a motivated seller and a motivated buyer.
Iger and Kushner were prepared to bid for a Las Vegas NBA expansion franchise when the opportunity arose, but this was quicker. Kushner, who runs a venture capital firm called Thrive Capital, owns a piece of the Miami Heat, which he’ll have to divest before this deal goes through. (He also owns a piece of the San Francisco Giants, which doesn’t exactly do much for his popularity in this region).
Beyond the financial stresses that seem to have forced the sale, this is a transaction with the potential to push other buttons. Kushner’s venture capital firm was involved in FIFA president Gianni Infantino’s plan to essentially privatize the World Cup, a plan that the rest of the soccer world considered so odious that Infantino is likely to be out as president after this term.
Then there is Kushner’s supposed tie (but maybe not) with another president. His brother Jared Kushner is Donald Trump’s son-in-law, was an advisor in Trump’s first term and is currently an envoy to the Middle East. However, stories have described Joshua Kushner as a lifelong Democrat and a contributor to Democratic campaigns. Given the current tendency of our society to put everyone in political silos, this is way too confusing.
(And, for the record, the White House denied any influence in the sale Wednesday.)
But the confusion totally aligns with the out-of-nowhere nature of this transaction.
Here’s one more mystery: What happens now with all of the Lakers’ planned organizational improvements? Walter had committed to adding staff, and brought in members of the Dodgers organization – including Farhan Zaidi in an active role – to help modernize what for so many years has been a mom-and-pop front office.
You’d like to think that will continue under new Lakers ownership. But who knows for sure? And how much would that transition be slowed or delayed during the wait for the sale to be approved? (Remember, when Walter agreed to buy the team last summer, it took four months for NBA owners to approve the sale.)
Theoretically, these new owners could be great for the franchise, which has been seemingly in transition organizationally ever since owner Jerry Buss died in February 2013. The team that invented Showtime and won five championships in the 1980s and five more in the 2000s right now is stuck in the NBA’s middle tier as the Luka Doncic era kicks in, not mentioned among the league’s elite teams.
Can Iger and Kushner help change that?
Finally, there is this: In the 14 seasons since Walter and his Guggenheim group rescued the Dodgers from the clutches of Frank McCourt, that franchise has become SoCal’s model franchise – what the Lakers used to be, frankly – and the one that 29 other fan bases envy.
Dodgers president and CEO Stan Kasten has insisted that Walter will not sell the Dodgers. “No change at all,” he told reporters Wednesday.
I’d love to be able to take his word for it.
Then again, no one expected Walter to sell the Lakers just 14 months after agreeing to buy them, either. So I’d be prepared for anything.
jalexander@scng.com