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Thursday, Dec 7, 2023

Walter, Boehly Buy 27% Stake in Lakers From Anschutz

Billionaires Todd Boehly and Mark Walter have a new pennant to hang on the wall. The longtime business partners acquired a 27% minority interest in the Los Angeles Lakers in early July — a stake valued at more than $1.24 billion — adding another elite franchise to their roster of sports investments.

Boehly and Walter also hold ownership positions in the Los Angeles Dodgers, and Walter serves as chairman of the reigning World Series champions. 

The investors purchased their Lakers position from Phil Anschutz, who heads sports and live entertainment company Anschutz Entertainment Group, or AEG, whose parent is Denverbased Anschutz Corp. 

It’s the first time in a quarter century that there’s been a change in the equity position of the Lakers, a storied National Basketball Association team that was acquired by Jerry Buss in 1979. His daughter, Jeanie Buss, is the controlling owner and president of the Lakers. 

“It’s an iconic franchise in a top media market in the country. It’s very rare that teams trade in New York or Los Angeles,” said Chuck Baker, a New York partner and co-chair of the sports industry group with downtown-based law firm O’Melveny & Myers, who helped advise Boehly on the acquisition. 

“So, when you see such a significant piece of a marquee franchise trade in a media market like this, at the valuation that’s being speculated, it’s pretty significant. It also shows that folks are still bullish after Covid on investing in sports franchises in major U.S. markets,” Baker said. 

He declined to comment on the valuation of the purchase. 

Sources familiar with the situation said secret talks by Anschutz to sell his position in the Lakers heated up in the spring. 

The transaction was approved by the NBA’s Board of Governors a week ago.

Teaming up 

Walter runs Chicago-based Guggenheim Partners, a $315 billion-in-assets investment firm. 

Boehly worked with Walter at Guggenheim before launching Greenwich, Conn. based Eldridge Industries in 2015. He serves as chairman and chief executive at the private equity firm, which invests in businesses involving sports and gaming, media and real estate. 

In 2012, when Walter led Guggenheim Baseball Management’s acquisition of the Dodgers for an estimated $2.2 billion, Boehly was one of the group’s partners. 

The team is valued at about $3.6 billion today. 

Walter, Boehly and several of their associates also bought the Women’s National Basketball Association’s Los Angeles Sparks in 2014. 

Walter and Boehly declined to comment on their acquisition of the Lakers, once considered the richest franchise in the NBA. Forbes valued the team at $4.6 billion this year, about $100 million behind the Golden State Warriors. 

“We remain strongly invested in the franchise’s long-term success,” Dan Beckerman, president and chief executive of AEG, said in a statement. “We are confident that with Jeanie as the team’s controlling owner, the Lakers will continue to be the gold standard in the NBA.”

 AEG and the Lakers recently announced a 20-year extension to the team’s lease at Staples Center. 
The agreement includes investment by both sides in upgrades and improvements to the downtown arena, which the Lakers will now call home through 2041. 

Boehly will join the Lakers’ board, representing the interests of both him and Walter. Walter remains the Dodgers’ chairman. 

“The Los Angeles Lakers are one of the most successful and admired franchises in sports history,” Walter said in a statement. “I have watched the organization grow under Jeanie’s leadership and couldn’t be more excited to partner with her and the entire management team.”

Presence in LA 

While Boehly lives in Connecticut, he is active in the L.A. business community. 

In 2017, he invested in Santa Monica-based Cloud9 Esports Inc., an esports organization that stages competitions that are watched by thousands of fans in person and millions more online or on TV. 

In October 2019, Eldridge Industries purchased $300 million in preferred stock and tripled its investment target in a joint venture fund with Beverly Hills-based real estate investment company Kennedy Wilson. 

Also in 2019, Eldridge and its affiliate firm, Security Benefit, raised the target of their $500 million joint-venture real estate fund with Kennedy Wilson to $1.5 billion.

The partners targeted commercial real estate assets in the western United States, including a Beverly Hills property located at 9350 Civic Center Drive. 

Boehly was elected an independent director of Kennedy Wilson in March 2020. Eldridge Industries also has jumped on the special purpose acquisition company bandwagon. 

Last month, one of the firm’s SPACs, Horizon Acquisition Corp. II, scrapped a $10 billion deal to buy Swiss gambling data company Sportradar, a digital ticketing marketplace that competes with StubHub.

In April, Boehly’s first SPAC, Horizon Acquisition Corp., agreed to acquire online ticket-seller Vivid Seats as part of a deal that values the company at nearly $2 billion. In March, a third SPAC, Horizon Acquisition Corp. III, filed plans to launch a $500 million IPO, but that SPAC has yet to close its offering or begin trading.

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