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Josh Kushner and Bob Iger have been offering Lakers minority stakes to investors starting at $250 million apiece as they build out their ownership group, Front Office Sports has learned.
The duo, which agreed to buy the Lakers from embattled billionaire Mark Walter over the summer at a record $12.5 billion valuation, have been working to sell minority stakes for between $250 million and $300 million each, four sources familiar with the matter tell FOS. That is just the starting point, and there will be minority investors who put significantly higher amounts into the deal, two sources say.
The news comes as Bill Simmons said on his podcast Thursday that Kushner is still $5 billion to $6 billion short on capital for the acquisition, that he “can’t find the money,” and that Iger is only putting in “like $63 million.”
The idea that Kushner is having trouble raising money for the deal is not true, one source tells FOS. There has been massive demand to get in on the Lakers deal, according to two sources, although it’s not clear who has expressed interest in buying in. The transaction could be completed within the next few months, one source says. Once the deal closes, Kushner will be majority owner, while Iger will be a minority owner and will oversee day-to-day operations of the team, the same source says.
It has become commonplace for NBA team buyers to reach an agreement and then fill out their roster of limited partners. The Celtics, for example, unveiled a group of minority investors a few months after Bill Chisholm’s $6.1 billion purchase of the team was announced. The number of minority investors in NBA teams, including private equity firms, has grown in recent years, in part because valuations are soaring.
The NBA recently revised its private equity rules to allow a firm and its executives to invest at the same time, a change that was made in part to allow for Kushner’s investment firm Thrive Eternal to invest alongside him in the Lakers deal.
There is also drama around whether the Buss family will remain invested in the Lakers once the deal goes through. Jeanie Buss and her siblings are engaged in a legal fight in California state court; the siblings want to sell the family’s 17.8% stake, but Jeanie Buss, who is the Lakers governor under a side deal reached with Walter last year, says they cannot do so under a 2017 court order. The siblings have disputed that notion.
The Buss family has owned the Lakers, in whole or in part, since 1979 when Jerry Buss bought the team and other assets, including the NHL’s Kings and The Forum, where both the Lakers and Kings used to play, for a reported $67.5 million. After he died in 2013, the franchise went into a trust controlled by the six Buss children. Before his death, he said the succession plan was for Jeanie Buss to become the Lakers governor and run the team.
FOS previously reported the Buss family legal battle “doesn’t impact the proposed deal with Bob and Josh in any way.”
Walter’s abrupt exit from the Lakers comes as his business empire faces federal investigations tied to faulty life insurance disclosures. Although Walter’s company, TWG Global, has insisted the Dodgers are not up for grabs and there is no “fire sale,” he has spent the last few months unloading a number of sports assets.
In August, Walter sold his nearly 13% stake in Premier League soccer club Chelsea to Clearlake Capital, the majority owner. That sale coincided with an exit from Ligue 1 side Strasbourg, also majority-owned by Clearlake.
Most recently, it was reported that Walter is looking to sell the WNBA’s Sparks. A source confirms to FOS that Kushner and Iger are not currently interested in buying the Sparks. Bloomberg first reported they’re not among the potential buyers.
A representative for Kushner and Iger declined to comment for this story.
