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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Welcoming Doctor Buss and the Hall of Fame are three

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Speaker 2: Laker legends, Magic Johnson, Kareem Abdul Jabbar and pat Riley Lady.

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Speaker 3: And Gentlemen, Doctor Jerry Buss. The Los Angeles Lakers is

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Speaker 3: one of the most iconic franchises in professional sports, and

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Speaker 3: that's thanks in large part to Jerry Buss, who bought

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Speaker 3: the team in nineteen seventy nine. Here he is at

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Speaker 3: his Hall of Fame induction ceremony. Some three decades later,

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Speaker 3: after two years of endless negotiations, I purchased the Los

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Speaker 3: Angeles Lakers.

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Speaker 2: What a dream come true.

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Speaker 3: It was a package deal that included the La Kings,

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Speaker 3: the Great Western Forum, and a thirteen hundred acre ranch.

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Speaker 3: Bus paid the media mogul Jack Kent Cook sixty seven

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Speaker 3: million dollars, which would be about three hundred million, and

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Speaker 3: at the time he promised to give Angelinos a team

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Speaker 3: worthy of Tinseltown.

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Speaker 2: He was one of the more flamboyant sports owners out

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Speaker 2: there who just took a lot of pride in running

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Speaker 2: the team and having stars and being at the epicenter

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Speaker 2: of Los Angeles.

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Speaker 3: Randall Williams covers the business of sports for Bloomberg, and

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Speaker 3: he says Jerry Buss transformed the Lakers.

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Speaker 2: The game ames the mic hasn't won it.

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Speaker 3: Showtime is the slogan that became synonymous with the team's

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Speaker 3: style on and off the court. Over three decades, Bus

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Speaker 3: revolutionized professional sports. He hired an in house band, created

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Speaker 3: the Lakers Girls, and he signed a series of superstars.

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Speaker 2: He liked to win, and so with him loving to

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Speaker 2: win as much as he did, he spared no expense

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Speaker 2: to bring in the best of players. I mean, you

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Speaker 2: think about all the Lakers stars over the years, whether

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Speaker 2: that be Magic Johnson, Kareem James Worthy, Kobe shack now,

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Speaker 2: Lebron and Luca all of these people are embedded into

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Speaker 2: the culture of Los Angeles, and Jerry Buss was someone

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Speaker 2: who he wanted to be like. I brought this.

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Speaker 3: Randall says Jerry Buss empowered his players and some legendary coaches,

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Speaker 3: including Pat Riley and Phil Jackson, to do what the

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Speaker 3: Lakers did best, to win. The team had eleven championships

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Speaker 3: and more than thirty playoff appearances in forty six years.

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Speaker 2: Right here, I've hired a right trapping chups.

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Speaker 3: How much is the franchise today a direct result of

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Speaker 3: the way he approached the team.

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Speaker 2: It's on the brand, identity, the value, the city, the winning.

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Speaker 2: I mean, you could argue that they are the number

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Speaker 2: one sports brand in America over the Yankees and the Cowboys.

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Speaker 2: Now there would be some very angry Yankees fans and

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Speaker 2: Cowboys fans out there, of course, but the Lakers are

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Speaker 2: top three, and I'd say they're not three.

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Speaker 3: What accounts for that. I've got a six year old

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Speaker 3: boy and he was insistent that he get a a

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Speaker 3: Broni curacy, which I thought was so wild. Here we

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Speaker 3: are in New York in the zeitgeist. So how did

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Speaker 3: that happen? How did this team get that kind of

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Speaker 3: cultural currency.

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Speaker 2: I think it's just stars in winning, the stars winning,

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Speaker 2: and a lot of culture. Like you look at who's

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Speaker 2: on the Lakers sidelines. You listen to the way that

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Speaker 2: NBA players celebrities talk about wanting to be at Laker games.

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Speaker 2: The Lakers have won a championship in just about every decade,

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Speaker 2: and they haven't done it in a way that's quiet.

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Speaker 2: It's like with the biggest stars. You think of the eighties,

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Speaker 2: it was Magic who at the time He was considered

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Speaker 2: a goat, and he still is to some degree. And

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Speaker 2: then you have an international star in Luca. They just

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Speaker 2: keep ushering in these stars for almost half a century.

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Speaker 2: It's also been a family business, majority owned by Jerry

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Speaker 2: Buss until his death in twenty thirteen and by his

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Speaker 2: children after that. The Bus name was synonymous with the

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Speaker 2: Laker brand until now.

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Speaker 1: The Bus family has agreed to sell a controlling interest

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Speaker 1: in the Los Angeles Lakers to the current owner of

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Speaker 1: the La Dodgers. Mark Walter, chief executive officer of Guggenheim Partners,

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Speaker 1: will assume majority ownership.

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Speaker 3: Late last week, buses six children decided to sell their

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Speaker 3: stake in the Lakers to the CEO of an investment

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Speaker 3: and advisory firm for a record ten billion dollars.

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Speaker 2: Ten billion dollars is a huge number, but they might

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Speaker 2: have gotten more on the open market. This may be

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Speaker 2: looked at, and let's say a decade from now that

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Speaker 2: this was a deal. Ten billion dollars was a deal,

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Speaker 2: which is insane to think about.

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Speaker 3: I'm David Gera and this is the big take from

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Speaker 3: Bloomberg News today on the show. What this record setting

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Speaker 3: sale of the Los Angeles Lakers to a billionaire investor,

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Speaker 3: says about the business of sports today and what it

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Speaker 3: could mean both for the future of pro sports and

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Speaker 3: for fans. When Jerry Buss died in twenty thirteen, ownership

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Speaker 3: of the Los Angeles Lakers went to his six children.

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Speaker 3: His daughter, Jenie, who'd been overseeing basketball operations, eventually became

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Speaker 3: the team's president and controlling owner. In the years since,

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Speaker 3: the team, which had dominated the NBA's Western Conference, has

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Speaker 3: fallen behind other franchises, winning a single title with Lebron

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Speaker 3: James in twenty twenty. Bloomberg's Randall Williams says that's due

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Speaker 3: in part to how much the Lakers' owners have been

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Speaker 3: willing to spend.

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Speaker 2: The new version of the Best Family. From what I've

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Speaker 2: been told is that they are extremely frugal. They don't

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Speaker 2: spend on the things that maybe the rest of the

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Speaker 2: NBA does, and you see that in the way that

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Speaker 2: these things are valued. If you look at Sporder Coas

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Speaker 2: valuations or Forbes or CNBC, I'm pretty sure all of

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Speaker 2: them have the Warriors and Nicks slightly ahead of the Lakers.

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Speaker 2: And you could argue that's because over the last decade,

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Speaker 2: the Lakers maybe have not invested into things the same

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Speaker 2: way that the Warriors and the Knicks have. The Warriors

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Speaker 2: have a new stadium, They had probably the most transformational

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Speaker 2: basketball player ever in Steph Curry. They won four titles

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Speaker 2: and six finals appearances, and so they were always at

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Speaker 2: the center. For the Lakers, it took until Lebron James

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Speaker 2: got back, and then you know, their title was in

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Speaker 2: the bubble. So no parade, and so the way that

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Speaker 2: they have carried this business is not the way that

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Speaker 2: you are going to be as most profitable.

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Speaker 3: Let's talk about the deal, and it's hard to get

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Speaker 3: past that headline number, but at this point, what do

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Speaker 3: we know about the terms of it.

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Speaker 2: Jeanie Buss, who is Jerry Buss's daughter, is going to

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Speaker 2: stay on as governor of the team, and what that

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Speaker 2: means is that she's going to have a day to

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Speaker 2: day role in managing things. So the governors of the

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Speaker 2: team attend the Board of Governor's meetings, they vote on

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Speaker 2: various things. So Mark Walter is still going to be

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Speaker 2: the owner of the team, but he's not going to

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Speaker 2: be at all these meetings. Now, I'm sure he's going

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Speaker 2: to be well informed and he's going to be spending

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Speaker 2: his dollars wisely to bring in different free agents to

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Speaker 2: i'd say diversify the business. We don't know exactly how

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Speaker 2: the deal is structured just yet. We just know that

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Speaker 2: they agreed to a ten billion dollar purchase and at

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Speaker 2: some point Mark Walter will take over, but it's not

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Speaker 2: going to be for the foreseeable future.

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Speaker 3: Who is Mark Walter, I mean, he's He doesn't have

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Speaker 3: the kind of low or legend of Jerry Buzz certainly,

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Speaker 3: and he's now kind of fashion himself as a kind

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Speaker 3: of king of VLA Sports.

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Speaker 2: Well, he's an extremely rich guy. Let's start there. He

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Speaker 2: started Gugenheim Partners, which made all his money there, and

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Speaker 2: then eventually purchased the Dodgers. And for La Natives, this

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Speaker 2: is a great sign because Mark Walter has spared no

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Speaker 2: expense to spend on the Dodgers. To introduce the newest

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Speaker 2: member of the Los Angeles Dodgers, Shohei Otani, wearing the

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Speaker 2: iconic Dodgers' uniform for the first time after signing an

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Speaker 2: unprecedented seven hundred million dollar contract. Now you bring someone

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Speaker 2: like him into the Lakers, and what this means like

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Speaker 2: this isn't going to affect salary cap. Like, you're not

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Speaker 2: going to be able to pay players more than anybody else,

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Speaker 2: but you might be able to renovate a training facility,

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Speaker 2: you might be able to invest more money into the

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Speaker 2: crypto dot com marine. You're just going to be able

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Speaker 2: to spend more cash to make LA a even more

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Speaker 2: desirable market than it already is. I mean a lot

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Speaker 2: of people come to LA because like, Okay, it's the stars,

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Speaker 2: it's the lore of the Lakers. And now you have

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Speaker 2: an owner who is going to be like, yeah, I

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Speaker 2: want to win. I still want to win, and I'm

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Speaker 2: not going to stop spending money until I get back

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Speaker 2: to the top.

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Speaker 3: We know he's a billionaire. Is he going to pony

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Speaker 3: up all this himself or is it still kind of

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Speaker 3: unclear how this is going to be structured in that sense.

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Speaker 2: How it's come out there in the release is that

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Speaker 2: it's him. Well, it's him now in terms of where

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Speaker 2: this money is coming from, Like ten billion dollars is

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Speaker 2: a lot of money. The Bloomberg Billionaire Index has him

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Speaker 2: worth at twelve point five billion. I can't imagine that.

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Speaker 2: You know, he liquidated all of his assets and then

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Speaker 2: bought this thing. Some of it could be on the

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Speaker 2: back end, some of it could be on the front end.

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Speaker 2: We're not exactly sure yet, but this will go to

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Speaker 2: the Board of Governors. We may find out more a

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Speaker 2: little bit then, but I don't think anybody's really concerned

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Speaker 2: with this. So long as it gets approved, people are

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Speaker 2: going to be like ten billion dollars and no one's

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Speaker 2: going to want to pay any more than that.

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Speaker 3: I'm reluctant to ask this because I feel like a

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Speaker 3: few monthsgover When's saying the same thing about the Celtics sale,

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Speaker 3: which is is this is this a signifier that we've

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Speaker 3: reached peak valuation of a franchise? Like this doesn't feel

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Speaker 3: like the peak to you.

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Speaker 2: No, No, it doesn't feel like the peak to me.

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Speaker 2: But it does slow things down just because of the

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Speaker 2: fact that the Lakers don't own their stadium, and that's

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Speaker 2: a huge, huge factor in this, because of the fact

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Speaker 2: that if you don't own your stadium, then you don't

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Speaker 2: get the revenue from things that aren't related to basketball,

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Speaker 2: So concerts, festivals, anything that you host in the arena,

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Speaker 2: you're not going to see money from. With that in mind,

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Speaker 2: if the Celtics went for six and the Lakers go

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Speaker 2: for ten. Then I do think that when the NBA

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Speaker 2: eventually decides to expand, if the next team is sold,

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Speaker 2: you're going to have a lot of billionaires and rich

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Speaker 2: people out there who are going to look at the

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Speaker 2: Lakers and they're like, I don't want to pay that much.

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Speaker 2: You know, you look at the last let's say five sales.

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Speaker 2: You had the three billion dollar Charlotte Hornets when Michael

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Speaker 2: Jordan's sold them. You had the three point five billion

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Speaker 2: dollar sale of the Mavericks. You had the four billion

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Speaker 2: dollars sale of the Suns. Now that jumps to six

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Speaker 2: with the sale of the Celtics, now that jumps to ten.

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Speaker 2: That's a huge jump. So anyone who's going to be

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Speaker 2: selling the Trailblazers are for sale right now, I would

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Speaker 2: guesstimate that they go somewhere between four five and five

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Speaker 2: to five. But if you're the NFL watching this, and

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Speaker 2: the Seahawks eventually have to be put up for sale,

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Speaker 2: so do the Saints, who knows what they go for it.

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Speaker 3: We've seen this trend of private equity firms and sovereign

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Speaker 3: wealth funds getting involved in professional sports. How is that

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Speaker 3: likely to change the terrain even more?

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Speaker 2: You're going forward, You're going to see more private equity

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Speaker 2: across sports period. Whether people are happy with it or not.

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Speaker 2: They are solution providers. Now where fans could get concerned

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Speaker 2: is if they ever take control stakes. Now that's not

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Speaker 2: happening right now. A lot of times they're writing checks

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Speaker 2: and going away. These checks are for stadiums, These checks

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Speaker 2: are for debt on a team. They are for state

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Speaker 2: taxes when you are passing the team down from one

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Speaker 2: member to the next, those type of things. That's what

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Speaker 2: private equity is looking to solve the NBA and has

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Speaker 2: some of the most flexible rules out there, where team

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Speaker 2: can have up to thirty percent owned by private equity.

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Speaker 2: One single private equity firm can own twenty. But obviously

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Speaker 2: you could split that up in three, you could split

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Speaker 2: it up in two. There's a bunch of different ways

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Speaker 2: you could split it if someone wanted to do that. However,

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Speaker 2: it would raise concerns within the NBA's Board of governors

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Speaker 2: as to why you need that much private equity dollars

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Speaker 2: in a league that's profitable. I do think at some

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Speaker 2: point in time all of these floors will raise, These

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Speaker 2: rules will become more loose in the NFL specifically they

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Speaker 2: allow ten percent, but you're going to need more because

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Speaker 2: these stadiums are continuing to get older and there's just

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Speaker 2: not a lot of rich families out there. And as

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Speaker 2: we see what's going on in Chicago right now with

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Speaker 2: the Bears and Kansas City with the Royals and the Chiefs,

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Speaker 2: there are some cities in states who are just like,

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Speaker 2: I'm not paying a dime to build this stadium, and

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Speaker 2: then you're stuck there, threatening to move and negotiating, and

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Speaker 2: that's very exhausting.

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Speaker 1: Now.

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Speaker 2: A lot of these families don't want to sell because

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Speaker 2: it's very precious. A. It's a profitable business, and B

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Speaker 2: it's a prize possession that my parents or grandparents bought

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Speaker 2: this however many some odd years ago. Getting rid of

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Speaker 2: that now is heartbreaking in a sense. And there are

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Speaker 2: some families who may look at it as like either

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Speaker 2: we failed or were successful. No, obviously there's no failure

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Speaker 2: when you're selling a team for however many billion dollars.

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Speaker 2: But the sentimental value, the emotions that are in this

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Speaker 2: that's where you see the effect in private equity dilutes

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Speaker 2: that in some form because eventually they need to exit,

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Speaker 2: and so for fans. Right now, it's not a concerning time,

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Speaker 2: but in twenty thirty years it could.

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Speaker 3: After the break how new ownership structures, which can involve

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Speaker 3: billions from private equity firms and sovereign wealth funds are

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Speaker 3: impacting fans. There's been a string of sales recently in

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Speaker 3: professional sports, and I said to Bloomberg's Randall Williams that

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Speaker 3: they've seemed to signal the end of an era in

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Speaker 3: many of the cities where those teams are based. Let

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Speaker 3: me ask you a kind of cultural question, and that is,

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Speaker 3: if you have the Lakers being sold by the Buses,

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Speaker 3: Grosspec's selling the Celtics, Glenn Taylor selling the Timberwolves, Mark

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Speaker 3: Cuban selling the maveris what's lost when that happens, When

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Speaker 3: you have a long standing steward of one of these

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Speaker 3: teams giving that to somebody else, What does that change

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Speaker 3: kind of mean for the team and the kind of

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Speaker 3: position that has in these communities.

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Speaker 2: I think it depends on who's buying and who's selling.

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Speaker 2: Like Mark Cuban was very influential, obviously the Bus family

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Speaker 2: was very influential. But sometimes like the owners who come

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Speaker 2: in and own these different things or are buying these

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Speaker 2: teams have a profound impact on the businesses that they have,

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Speaker 2: in large part because they are richer. Like for example,

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Speaker 2: Josh Harris has come in and completely changed the course

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Speaker 2: of the Commanders. In two years, He's built a stadium.

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Speaker 2: They're going to be hosting the Draft. Once the stadium

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Speaker 2: is built, they'll probably host a Super Bowl in DC.

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Speaker 2: There are some owners who would come in and because

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Speaker 2: the NFL and NBA's business are as profitable as they are,

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Speaker 2: they would just sit back and be like, I own

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Speaker 2: the team. I'm a nice guy. I'm gonna go sit

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Speaker 2: back and hide behind the curtain and allow the you know,

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Speaker 2: everybody to do their jobs. But sometimes there are influential

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Speaker 2: voices that are lost when you look at someone like

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Speaker 2: Michael Jordan's selling the Hornets. Michael Jordan is arguably the

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Speaker 2: most important sports figure of all time, and he represented

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Speaker 2: an empowerment for athletes to be like, I made so

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Speaker 2: much money that now I'm in the inner circle. Athletes

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Speaker 2: in large part are on the outer circle of the

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Speaker 2: billionaires club, and Michael Jordan getting in is like, okay,

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Speaker 2: well I can now own this. You see Lebron talking

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Speaker 2: about I want to own the Las Vegas expansion team.

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Speaker 2: Dwayne Wade, I believe, bought into the Utah Jazz at

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Speaker 2: a minority minority stake. But when Michael Jordan exits and

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Speaker 2: now you have no black owners, you have no player owners,

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Speaker 2: it impacts in some ways the outlook of Now, I'm

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Speaker 2: gonna tell you right now, Michael Jordan didn't do the

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Speaker 2: best job of running the Hornets by any means, but

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Speaker 2: he provided a lot of sentimental value. He provided a

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Speaker 2: lot of hope for players to be like, Wow, Michael

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Speaker 2: Jordan can do this, Maybe I can too.

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Speaker 3: And when private equity gets involved, what does that mean

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Speaker 3: for the fan experience? Is there a world in which

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Speaker 3: getting a pe firm involved makes tickets less expensive, improves

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Speaker 3: the experience overall?

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Speaker 2: Well, it depends on how you look at improve Let's

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Speaker 2: talk about the Buffalo Bills. For example, the Buffalo Bills

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Speaker 2: sold a ten percent stake to arc those partners, who

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Speaker 2: is arguably the most well experienced private equity firm out

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Speaker 2: there in terms of sports. Arctos is going to be

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Speaker 2: coming in in all likelihood are going to be putting

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Speaker 2: that money into the Buffalo Bill's new stadium. Well, when

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Speaker 2: a new stadium gets built gradually, and naturally those prices

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Speaker 2: for tickets are going to go because it's a new stadium.

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Speaker 2: They also have an incredible quarterback. They're going to be

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Speaker 2: selling new luxury suites and all sorts of different ticket packages.

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Speaker 2: So in some aspects, yes, it is going to provide

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Speaker 2: a better experience. However, for fans who have been going

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Speaker 2: to the Bills Stadium or however many years, if you're

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Speaker 2: a season ticket holder and these ticket prices go up

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Speaker 2: and now you're priced out, then you could argue that

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Speaker 2: this hurt me because I can't afford this anymore. I'm

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Speaker 2: sure that the NFL and NBA and MB and all

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Speaker 2: of its owners would just say, get your money up.

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Speaker 3: I'm very curious what this sale says about the state

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Speaker 3: of the business of sports today.

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Speaker 2: I think sports is in a healthy spot. This is

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Speaker 2: the biggest sale in a very long time. If the

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Speaker 2: Lakers are gone for closer to the Celtics, I still

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Speaker 2: think that it would show health. But the fact that

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Speaker 2: they went for four billion dollars more is incredible. I

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Speaker 2: don't want to compare this to the Knicks or to

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Speaker 2: the Cowboys. They would go for more than the Lakers.

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Speaker 2: I would imagine just because I believe that those sales

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Speaker 2: would be run in a public forum. But for the

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Speaker 2: average fan watching this, this is a good sign. Now.

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Speaker 2: Do I think that we are closer to the ceiling

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Speaker 2: now than we were before? Absolutely? And obviously all of

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Speaker 2: these valuations are tied to media deals. Whatever the next

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Speaker 2: media deal is going to be is inevitably going to

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Speaker 2: raise valuations even more. But the NFL's last media deal

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Speaker 2: was one hundred plus billion dollars. What is the next

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Speaker 2: one going to be? And so from a big picture aspect,

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Speaker 2: I think sports are in a good spot for the

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Speaker 2: next fifteen to twenty years. Now, who knows what this

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Speaker 2: is going to look like in two decades. Because the

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Speaker 2: Lakers sell for ten billion right now, what in the

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Speaker 2: world are they going to go for in fifteen or

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Speaker 2: twenty And it may not be the Lakers. It could

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Speaker 2: be a smaller team in any of these leagues that

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Speaker 2: fetch a huge number. And then the question arises, like

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Speaker 2: who's going to buy this thing? And goes back to

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Speaker 2: your questions about when does private equity get involved in

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Speaker 2: own teams? Outright, We're not in that phase right now.

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Speaker 2: But if these things continue to rise and valuations continue

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Speaker 2: to rise, then inevitably you're going to see private equity

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Speaker 2: own fifty percent stakes. The rules don't allow right now,

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Speaker 2: but I could see it at some point down the line.

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Speaker 3: This is the Big Take from Bloomberg News. I'm David Gura.

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