After striking a deal to buy the Los Angeles Lakers last month, venture capitalist Joshua Kushner and former Walt Disney Co. chief executive Bob Iger have sat waiting for the NBA’s green light. A reported league rule change could pave the investors’ way to closing.
Sources have told Bloomberg and Front Office Sports that the NBA and the MLB are amending several rules that govern private equity’s involvement in the leagues’ franchises. While the MLB reportedly raised the maximum stake private equity firms can hold in a team from 15% to 20%, the NBA will let firms and their executives invest in the same team at the same time.
The latter would allow Thrive Eternal, a fund connected to Kushner, to help pay for the purchase and largely dispel questions about the duo’s plans to finance the deal, which values the storied franchise at $12.5 billion. It might also increase the number of bidders looking to snap up controlling team stakes, which are becoming prohibitively expensive as valuations climb.
The majority stake billionaire Mark Walter purchased in the Lakers just a year ago, which he is now offloading to Kushner and Iger, valued the team at $10 billion.
A specialized vehicle
A subsidiary of Kushner’s Thrive Capital venture fund, Thrive Eternal launched in April as a permanent capital holding vehicle dedicated to “cultural assets” insulated from the threat posed by artificial intelligence. The fund’s first investment was a sub-10% stake in the MLB’s San Francisco Giants.
Thrive Eternal has been drumming up funds to support the Lakers buy, according to a leaked investor pitch deck obtained by The Wall Street Journal. The fund’s executives expect the franchise to generate $600 million in revenue by 2037 and reach a valuation of $30 billion the same year, the pitch said.
