The most expensive sports team in history changed hands this week, and the remarkable number is not $12.5 billion. It is 72 hours.
That is how long it took. Joshua Kushner of Thrive Capital reached out. Within three days, Kushner and Bob Iger had agreed to buy control of the Los Angeles Lakers at a $12.5 billion valuation. That is the highest price ever paid for any sports franchise, in any league, anywhere.
Nobody negotiates the largest deal in the history of an industry over a long weekend because they are relaxed about it.
Why the Rush
The seller was Mark Walter, 66, the founder of the investment firm Guggenheim. He needed cash to keep his insurance companies afloat.
Those insurers sit at the center of a federal investigation. The U.S. Attorney in Manhattan and the Securities and Exchange Commission are examining billions of dollars in loans made to companies tied to Walter and his firm TWG Global. Those loans ended up on the insurance companies’ balance sheets after passing through a third company.
Read that slowly, because the structure is the story. Loans go to companies connected to the owner. The loans travel through a middleman. They land as assets at insurance companies the same owner controls.
Every step may prove entirely lawful. But notice what the arrangement lacks. The lender, the borrower, and the holder of the loans all point back to one person. There is no outsider in the picture whose only job is to say no.
A Record, Still Forced
Here is where investors usually get fooled. Walter bought the Lakers a year ago at a then-record $10 billion. He sold control at $12.5 billion. On paper, that is a $2.5 billion gain in twelve months — which sounds like the best trade of the year.
It was not a victory lap. He sold because he needed the cash, on a timetable set by somebody else, and the buyer knew it. Walter plans to sell or restructure most Walter-related investments by the end of 2026.
The rest of the empire is substantial: the Dodgers, the Los Angeles Sparks, a professional women’s hockey stake, a minority piece of the Chelsea soccer club. The buyer is not new to this either — Thrive Eternal had earlier taken a stake in the San Francisco Giants.
Jeanie Buss stays on to run the team for at least five years, which keeps the fans calm and changes nothing about the money.
Not About Basketball
An illiquid asset is anything you cannot sell quickly — which means its real price is unknown until the day you sell it. A private loan is illiquid. A stake in a soccer club is illiquid. A basketball team is gloriously, spectacularly illiquid.
Each one carries an estimated value on somebody’s statement, and that number looks reassuringly stable right up to the moment it gets tested. This week it got tested, and the answer came back in three days.
Note that Walter had a genuinely great asset to sell. He owned one of the most famous franchises on earth, in a market where buyers with billions line up. That is the best possible version of this situation.
Most people caught short do not own the Lakers. They own private loans to companies nobody has heard of, valued by a computer model, in a fund that lets you take money out quarterly — until the quarter it does not.
That is why we still avoid business development companies — funds that make private loans and advertise big yields. The headline yield looks wonderful in a spreadsheet. The loans behind it are worth whatever someone will pay on a Tuesday when you need the money.
Even a trophy asset can be a margin call — a demand for cash, right now — wearing a jersey.