The business strategy behind the Lakers' $12B Sale

Apparently, after LeBron James's move to Philadelphia, the NBA was a bit too quiet, so the City of Angels decided to generate some drama. Last week, it was revealed that the Los Angeles Lakers are being sold to American businessmen Josh Kushner, of the Kushner family close to President Donald Trump, and Bob Iger, president of Disney. The duo will purchase the team for a record price of over $12 billion.

According to a report by ESPN's Ramona Shelburne, the new buyers initially negotiated to buy the league's new franchise in Las Vegas, but in a "surprising twist" changed course and submitted an "aggressive offer" for the Lakers. Mark Walter, who has served as controlling shareholder of the club since last October (when his bid was unanimously approved by the Board of Governors), is now registering a handsome paper profit of $2 billion from the sale of the team, which he bought for $10 billion less than a year ago.

Walter and his holding company, TWG Global, hold shares in several other professional sports organizations. The list includes, among others, the Los Angeles Dodgers (baseball), Los Angeles Sparks (WNBA), Chelsea of the Premier League, and the Professional Women's Hockey League (PWHL). In addition, through the subsidiary TWG Motorsports, he holds shares in auto racing teams, including Formula 1's Cadillac team.

"As basketball fans since childhood, we are excited by the privilege and honor to manage one of the most iconic sports clubs in the world. We have immense appreciation for the leadership and vision of the late Jerry Buss," Iger and Kushner said in a joint statement.

On the other hand, the seller summarized: "Ownership of the Lakers was one of the greatest things I have done in my life. It was an extraordinary investment, but what I will take forward with me is the community, the fans, and the city that treats this team like family. I am grateful to Jeanie Buss, the players, and the staff who welcomed me. The club belongs to Los Angeles, and I am convinced the best is yet to come." Walter, naturally, did not mention a word about the massive profit he turned.

Everything sounds well and good, but something about this deal smells fishy. Walter, who concurrently serves as CEO of Guggenheim Partners, is known as someone who keeps a low profile, but his absence from the Dodgers' 2024 championship celebrations was unusual even for him. Just 10 days earlier he had still spoken on the field after the baseball team qualified for the World Series. According to The Wall Street Journal, right in the middle of the World Series, the owner suffered a stroke.

Since that stroke, his health condition has become a cause for concern within his business empire. In the initial period following it, he struggled for months to speak clearly, according to associates who confirmed the incident to the financial newspaper. Some of them recounted that he often confused words, and certain senior executives and investors testified to their impression that his mental acuity had degraded significantly.

However, that is not necessarily the central reason for the flash sale. The 66-year-old businessman is currently at the center of a federal investigation regarding the operation of his financial empire, with suspicions that private credit deals involving companies he owned constituted actual fraud. Reports state that the transactions under the magnifying glass date back to 2019.

Walter has a wide range of holdings in finance and sports. The financial services firm he heads manages an investment bank as well as a management arm overseeing $362 billion in assets. The combination of the stroke and the federal investigation is, shall we say, not exactly a winning recipe for business.

If that were not enough, the investigation on behalf of the federal prosecutor's office in Manhattan and the US Securities and Exchange Commission (SEC) focuses on giant loans granted to companies linked to him or to TWG Global. According to the Bloomberg agency, FBI agents searched his mobile phone at the Chicago airport back in September. Investigators are examining how loans reached the balance sheets of insurance companies without being reported to regulators as "related party" transactions, and whether they passed through third parties that disguised their true nature.

Again, this is not small change. Reports in the US indicate that the investigation expanded to around $16 billion in loans, yet no criminal charges have been filed, and his visit with the Dodgers to the White House with Trump is still remembered. That is how things work today in America: The president helps certain billionaires with their investigations by authorities in exchange for favors for him and his family. It is certainly possible that this is all that led to the sale of the flagship team into Kushner's hands.

If that name sounds familiar to you, and not just because he is the brother of Jared (husband of Ivanka Trump), it is probably thanks to the fact that just two weeks ago FIFA President Gianni Infantino (another close associate of the president) attempted to "privatize" the World Cup by selling its future revenues to a private company owned by... you guessed it. That same controversial initiative, which was ultimately canceled, was supposed to cost the buyer about $20 billion. So now, instead of the World Cup, he gets control over a megabrand in the NBA.

The younger Kushner previously studied at the Reishit yeshiva (a Modern Orthodox yeshiva) before continuing to Harvard, where he received a bachelor's degree in government in 2008. Afterwards he worked for a year at Goldman Sachs, before returning for a master's degree in business administration, which he completed in 2011. During his academic years, he co-founded Vostu, a social network that later became a gaming platform centered in Brazil.

As a master's student he had already established Thrive Capital, a venture capital fund that invested in giant companies such as OpenAI, GitHub, Instagram, and Spotify (as well as Israeli unicorns such as Wiz, Melio, and Lemonade). Of course, all this would have been difficult to do without financial backing and family capital. According to estimates, his personal net worth is valued at $5.2 billion, making him the wealthiest person in his family. His father, Charles Kushner, was convicted in 2004 on 18 counts (including tax evasion, illegal campaign contributions, and witness tampering) and served two years in prison, but received a presidential pardon from Trump in 2020.

So what is the next goal with the basketball team? Beyond the enormous tax benefits that will be derived from the move, the answer depends quite a bit on his partner in the purchase, Bob Iger. The latter returned in 2025 to the position of CEO at media giant Disney, after a series of senior roles in media. He led a period of growth back then that turned the company into an international media monster.

During his first term as CEO (which lasted 15 years), Iger led a series of mega-acquisitions that reshaped the entertainment world: Pixar studios in 2006 ($7.4 billion), Marvel in 2009 ($4 billion), Lucasfilm in 2012 ($4.05 billion), and 21st Century Fox in 2019 for no less than $71.3 billion.

Under his leadership, Disney expanded its global presence and launched the Disney+ streaming service. After stepping down in 2020 and serving as executive chairman, he was brought back to the CEO chair by the board of directors to tackle severe profitability challenges and reorganize the company. Upon his return, the executive focused on restoring creative authority to studio heads, executing dramatic cost cuts, and guiding the corporation through structural changes in television and film distribution.

Although his personal wealth does not allow him to purchase the NBA team on his own (he is valued at "only" about $600 million), his immense value lies in the ability to make content and the brand highly marketable and profitable. He previously increased Disney's market value from around $50 billion to $200 billion, and in his autobiography even described how he turned relationships of trust with entrepreneurs like Steve Jobs and George Lucas into an integral part of his economic model.

However, he absorbed quite a bit of criticism from both the business and content worlds. His acquisitions plunged the entertainment corporation into mounting debt, requiring harsh efficiency measures and waves of mass layoffs. At the same time, the shift to a massive focus on franchises drew complaints from viewers and critics alike. Many argued that flooding screens with Marvel, Star Wars, and live-action remakes eroded brand quality, led to audience fatigue, and hurt revenues. Film critics even argued that the company simply sacrificed original stories and bold projects in favor of risk-free sequels.

Concurrently, Iger faced sharp criticism from labor unions and activists, including empire heiress Abigail Disney, surrounding huge wage gaps in the company. While he pocketed imaginary sums of $30 million to $65 million a year, theme park workers were furious over minimum wage, poor employment conditions, and living hardships. Thus, for example, when he decided to lay off journalists from the ESPN network, he himself drew a salary of over $40 million a year.

So what will happen now at Crypto.com Arena (formerly the Staples Center)? It is too early to tell. It is also not yet clear how much professional influence the seller himself had on day-to-day management, as the team was still largely led by the mythical Buss family. What is certain is that incredibly powerful and well-connected people have taken over one of the biggest empires in sports at an unprecedented price, less than two years after it broke the previous record itself. It is just very hard to believe that the path there was pure.