Financing the Lakers deal: ‘They won’t have to produce’ full $12.5B
Mike Vorkunov, The Athletic National NBA and Basketball Business Reporter and host of ‘Business Decision,’ joins Yahoo Finance to discuss venture capitalist Josh Kushner and former Disney (DIS) CEO Bob Iger’s agreement to buy the Los Angeles Lakers from Mark Walter for a record-breaking $12.5 billion.
Bob Iger and Josh Kushner, Mike. These are these are very successful, very wealthy men. Um I you know, Forbes puts Kushner at like roughly $5 billion dollars. That still is a long way to 12.5 billion. Um do we have any line of sight there, Mike, about how exactly this is getting financed?
Yeah, so Thrive Eternal, which is uh an offshoot of Thrive Capital, Josh Kushner’s private equity firm is going to be a part of this deal in addition to Kushner and Bob Iger being a part of it. Um, the NBA limits private equity to owning 20% of a team. So there are caps there. Um, you know, they also allow sovereign wealth funds, pension funds to get involved and I’m sure there will be some other, you know, high net worth individuals that want to get on the cap uh table for owning the Lakers and it’s worthwhile to say, uh they’re not buying 100% of the Lakers, right? So it’s not the full 12 and a half billion, there’s not 100% of the equity uh to divide. Mark Walter, if I remember off the top of my head, owns somewhere around 60% of the team. Uh so they won’t have to produce the whole 12 and a half billion dollars uh to make a sale go through.
Is it unusual Mike to sell without an auction? Mike, if I’m a Lakers fan, I’m watching this right now. Should I should I expect anything to change because of this? Would there be changes in, I don’t know, front office or spending or culture?
That’s a great question. Mark Walter when he took over, you know, he had so much success with the Dodgers and it seemed like he was on his way to replicating what they did as a front office with the Dodgers, with the Lakers, you know, being more analytics oriented, more um process oriented, all the things that the Dodgers have had success with, right? They’re probably the best organization in sports. We don’t know anything about how Josh Kushner and Bob Iger want to run a team and we also don’t know if they want to continue down the road that Mark Walter and that ownership group had started down. So it really is a very big question about what the Lakers’ future looks like because they were just at the starting point of kind of one culture setting uh moment for them, one organizational build for them. And so does that continue? Do they pivot? It’s a very important question for the future of the league.
