LA Lakers pen record-breaking sale: What it means, who is the man splashing the cash and ramifications for NBA expansion?
The Buss family has been the face of the LA Lakers since 1979, but they’ve agreed to sell their majority stake. We examine how it could change the NBA — and its future.
Basketball
Don't miss out on the headlines from Basketball. Followed categories will be added to My News.
The LA Lakers are about to be the most valuable sporting franchise on the planet, amid news of a record-breaking sale.
The reported US$10-12 billion ($15-19 billion AUD) agreement with LA Dodgers baseball franchise owner Mark Walter is set to put the NBA franchise at the top of the tree, eclipsing the Dallas Cowboys, who were No.1 on last year’s Forbes list of the world’s most valuable sporting franchises, hitting US$10.1 billion.
Here’s what you need to know about the sale:
What it means and why you should care?
The Los Angeles Lakers are one of the NBA’s most iconic and successful franchises, so the club selling for a monumental figure is major news that will have widespread ramifications across the league.
The Buss family has been the business face of the Lakers since 1979, but they’ve entered an agreement to sell their majority stake in the club to businessman Walter.
Walter will provide the Lakers with significant experience in the professional sports space, given his broad portfolio of teams.
NBA history has proven that “New owner syndrome” is real. In the past new owners have shown the tendency to make significant, often drastic, changes to a franchise shortly after taking over, sometimes with negative consequences. This can involve overhauling the roster, coaching staff, or front office, often driven by a desire to make an immediate impact or assert their authority.
It remains to be seen what Walter does with the Lakers – a franchise that already faces key recruiting questions with veteran face LeBron James yet to announce his future plans.
Who are the previous owners and why they’re not your average NBA team owner?
American businessman Jerry Buss purchased the LA franchise way back in 1979 for just US$67.5 million and the Buss name became synonymous with the Lakers as they won 10 championships during his reign.
The patriarch’s 2013 death left the Lakers to his six children: Johnny, Jim, Jeanie, Janie, Joey, and Jesse – clearly a big fan of the letter J.
Jeanie is the most well-known of the family – she’s been the team’s governor and key decision-maker since her father’s death – with an estimated net worth of around US$700 million.
The family has, at times, fought an internal civil war – in 2017, Jeanie thwarted an attempt by Jim and Johnny to overthrow her.
The Buss clan weren’t as wealthy as many other NBA owners because they made the majority of their fortune from the team.
Most, if not all, other owners were successful businesspeople before buying into their franchises.
Who is Mark Walter?
Bloomberg’s Billionaire Index puts the Iowa native’s net worth at north of US$12 billion.
Despite building a sporting empire – owning the Dodgers MLB franchise and holding part-ownership in the LA Sparks WNBA club and English Premier League giant Chelsea – the 65-year-old has kept a relatively low profile.
Ie: He’s no Elon Musk in the public eye.
But he is insanely rich and his spending power dwarfs that of Jeanie Buss, worth ‘just’ US$700 million.
A qualified lawyer, Walter’s roots are in investment management and personal financing and rose to become founder and chief executive of Guggenheim Partners, a global investment and advisory firm which is manages an asset portfoilio estimated to be worth a mind-boggling US$300 billion.
The LA Times called him “one of the great financial minds of our time”
Of note, he’ll also have an interest in Formula 1 from next year as a part-owner of the new Cadillac team.
How does Luka Doncic fit in with the sale and how does the new owner’s deep pockets change the game for the Lakers – and the other 29 NBA clubs?
LA has almost always been a destination club for the NBA’s biggest stars, from Wilt Chamberlain to Kareem Abdul-Jabbar to the Showtime of Magic Johnson, the legend of Kobe Bryant and more recently, King James.
The February 2 trade that sent Luka Doncic from Dallas to the Lakers shook the entire basketball world and had a significant impact on ticket sales – and prices – and merchandising.
Average ticket prices for games at Crypto.com Arena jumped almost 19 per cent from $253 before the trade to $303. Fanatics – the NBA-aligned apparel stockist – couldn’t keep up with demand for Luka jerseys, selling out Lakers gold jerseys within a week of the trade.
On August 2, Doncic is eligible for a four-year, $229 million extension in Los Angeles. He could also sign a shorter deal, opt out after a couple of years and then ask for more money.
Regardless, it’s chump change for an owner worth several billion – and someone who made baseball icon Shohei Ohtani the highest-paid athlete in North American pro sports history with a 10-year, US$700 million contract.
The Lakers were already fifth in the NBA in salary spend at over US$192 million (James and Anthony Davis/Doncic nearly US$100 million between them)
With the deepest pockets imaginable, Walter might soon set a new record for wage spends as he pulls out the checkbook in search of NBA dominance.
The NBA salary cup was US$140 million and luxury tax was set at US$170 million (teams who spend over that figure must pay incremental amounts to the NBA for every dollar over that figure, which is then redistributed to teams who stay below the threshold).
With LeBron James close to – or at the end of? – a remarkable career, no NBA free agent will be safe and other teams will be forced to dig even deeper into their pockets to compete.
What does this move mean for expansion and the price of those expansion franchises?
The NBA is closing in on expansion and, while it has no formal timeline, the record-breaking sale of the Lakers sets a new benchmark for sporting franchises and that is likely to filter on to future expansion teams.
It’s a good thing for the perceived values of every NBA team, in general, and you can expect the league to capitalise on it with beefed up expansion fees for prospective owners – the higher the valuation of existing teams, the more they can ask for new ones to enter the league.
Several locations have been touched on as potential options.
The Supersonics left Seattle in 2008 to become the Oklahoma City Thunder – who are now on the verge of winning this year’s NBA title. Seattle is seen as a frontrunner for a new expansion franchise, along with Las Vegas, where the NFL recently moved.
A franchise in Mexico City would open the Latin American market further, while a second team in Canada has also been floated as an option, with Vancouver – where the Grizzlies left for Memphis in 2001 – and Montreal possibilities.
Other less likely cities like Louisville and Kansas City have been mentioned in dispatches.
More Coverage
Originally published as LA Lakers pen record-breaking sale: What it means, who is the man splashing the cash and ramifications for NBA expansion?
Lakers set for $15 billion sale in NBA bombshell
The LA Lakers look set to get a new owner, with reports emerging the iconic NBA outfit is being sold for an eye-watering sum.
‘It’s an honour’: Jim Stynes’ son set for international debut
The son of Melbourne great Jim Stynes is set to follow in his father’s footsteps when he represents Ireland on the international stage next month. Here’s how the opportunity came about.