BREAKING: LeBron, Luka, and Legacy: What Makes the Lakers a $10 Billion Franchise?
The two star Lakers aren’t the only reasons L.A.’s team is the most valuable in sports. Boardroom breaks down the latest money move by new owner Mark Walter.
A new era has begun for the Los Angeles Lakers.
It was revealed this week that one of the most popular sports franchises in the world will be sold at a valuation of $10 billion.
Jeanie Buss agreed to sell the Lakers – the most valuable franchise in the NBA – to billionaire businessman Mark Walter. The team has been owned by the Buss family since Jerry Buss acquired it for $67.5 million in 1979. (Ironically enough, the Lakers’ sale beat the previously set record by their rival, the Boston Celtics, for $6.1 billion earlier this year.)
While using the words “sold” and “billion” in the same sentence has become more common in recent years for some of the biggest sports franchises in the world, it still feels unbelievable. But why, beyond the gargantuan number, does this sale feel more monumental? Dan Rascher, a professor of sports economics at the University of San Francisco, told Boardroom how growth and profit margins have exploded recently in the NBA since it’s not “encumbered” with a lot of expense.
“Additional media revenues don’t tend to cost the team much additional expense, thus it goes to the bottom line. These higher profits are helping to drive up valuations quicker than revenue is growing,” Rascher told me.
The $10 billion valuation is owed to several factors beyond the overall growth of the league. Why? They’re the Lakers, of course – a team that has continued global appeal, historical success, a tremendous fan base, a competitive local media environment, and the likelihood of continued on-the-court success because players want to play in Hollywood. Saying Walter made a genius decision, when he is also the primary owner of the Los Angeles Dodgers, is an understatement.
The Guggenheim Baseball Management group, led by Magic Johnson, Stan Kasten, and Mark Walter are introduced at a press conference in center field at Dodger Stadium. (Robert Gauthier / Los Angeles Times via Getty Images)
Walter’s sports ownership doesn’t end there. The CEO of global investment and advisory company Guggenheim Partners, he is also the primary owner of auto racing organization Andretti Global, the Los Angeles Sparks, and the Professional Women’s Hockey League (PWHL). In addition, he owns a stake in BlueCo, a holding company that controls Premier League club Chelsea and Ligue 1 club RC Strasbourg. The company is estimated to have more than $325 billion in assets. Walter is also co-founder and CEO of holding company TWG Global. The holding company announced a $15 billion equity raise in April, $10 billion of which came from UAE’s Mubadala Capital.
“We are excited to deepen our relationship with Mubadala Capital, a global leader that shares our long-term investment philosophy and our commitment to excellence. The convergence of business and new technology is creating unprecedented investment opportunities. This collaboration enhances our ability to capitalize on that opportunity set and provides us with additional access to world-class investment strategies,” Walter said in a statement at the time.
Walter’s net worth is an estimated $6.1 billion, according to Forbes.
“Over the past two decades, NBA teams have grown the quickest in value of the top few sports leagues in the U.S.,” Rascher said, reminding me how people thought Steve Ballmer’s $2 billion purchase of the Los Angeles Clippers was too much in 2014. The Clippers’ value has doubled over the past decade, making it the NBA’s fifth highest-valued team at $5.5 billion.
The Lakers’ revenue for the 2023-24 season was $522 million, according to Statista, a 1% increase from the prior season. The Lakers’ operating income for the same period was $199 million, of which $175 million went to player expenses. For comparison sake, that revenue ranked third in the NBA in the 2023 season. The Golden State Warriors saw revenue of about $800 million, $142 million of which went to operating income.
Now, that $522 million revenue is about to be supported by the ownership of a man who isn’t afraid to spend money to win.
Walter, whose net worth was reported to be as high as $12.5 billion at one point, took over the Dodgers in 2012 and rescued the team from bankruptcy. The changes he’s brought to the team in the last decade are longer than a CVS receipt. The one that stands out the most is the spending he’s done. This season, the Dodgers’ payroll and luxury taxes are upwards of $470 million. Any doubts about the spending have been hushed, as the Dodgers won the World Series in 2020 and 2024.
“[T]his is really a strategic purchase for [Mark] Walter in that it helps enhance his other sports properties. His bargaining power with LA media companies, too, is stronger,” Rascher said.
The rest of the league is officially on notice.