Mark Walter has sold his majority stake in the Los Angeles Lakers to Joshua Kushner and Bob Iger for $12.5 billion, a move that comes less than a year after Walter acquired the team at a valuation of $10 billion. The sale generated a substantial profit for Walter in a short period, with the $12.5 billion valuation setting a new record for a sports team transaction. This rapid divestment has drawn attention due to ongoing federal investigations by the SEC and U.S. prosecutors into potential financial improprieties at two of Walter's insurance companies, Delaware Life Insurance Company and Clear Spring Life and Annuity, as well as Guggenheim Partners, the financial firm he co-founded.
The timing of the sale and the ongoing federal probes have led to speculation about Walter's other sports holdings. Walter's sports portfolio includes significant stakes in MLB's Los Angeles Dodgers, English Premier League team Chelsea FC, the WNBA's Los Angeles Sparks, the Professional Women’s Hockey League, Cadillac F1, and the Billie Jean King Cup. The sale of the Lakers, particularly amid the scrutiny of his other businesses, has raised questions about whether he might divest other assets, with the Dodgers being a prime example.
The $12.5 billion valuation for the Lakers does not mean Kushner and Iger are directly paying that amount. The Buss family, the team's long-time control owners, will retain an approximately 15% stake. Walter and Todd Boehly had previously owned 27% of the Lakers, acquired in 2021 at a $5.5 billion valuation. The transaction's financing likely involves leveraging the NBA's debt limit of $475 million and potentially utilizing private equity funds, with the league allowing up to 30% of equity to be held by institutional funds.
The federal investigation reportedly centers on loans made by Walter-owned insurance firms to other holdings within his TWG Global holding company, which also encompasses his sports portfolio. Walter is reportedly in discussions with investors to secure funding to pay down loans on the books of these insurers that have attracted scrutiny from the Justice Department.
