Walter buying Lakers shows how team ownership is changing
Wednesday's news that billionaire financier Mark Walter was adding majority ownership of the Los Angeles Lakers to his rapidly growing pile of sports holdings provoked a natural response: Of course.
Walter's best known for his ownership of the Los Angeles Dodgers, where he's overseen an increase in spending that has knocked Major League Baseball on its ear, but he's been a minority investor in the Lakers for years. He also owns the WNBA's Sparks and the entire PWHL, and he's part of a group that owns the Premier League's Chelsea FC, among a number of other soccer investments.
Adding the Lakers ownership to the Dodgers franchise gives him an unrivaled pair of assets from a North American perspective. It also very much fits a modern trend. Owning a sports franchise used to primarily be a way for wealthy people to have an expensive toy, and it wasn't unusual for the person at the top to be the face of the team - George Steinbrenner with the Yankees, Al Davis and the Raiders, and more recently, Mark Cuban and the Mavericks. The Buss family had owned the Lakers since 1979.
But as the value of sports franchises has ballooned - the Lakers are selling for a record $10 billion - more and more of them are being purchased by multi-sport ownership groups like Walter's. They don’t just want an expensive toy; they want assets across a bunch of leagues, sports, and even continents. Some of that is for cold business reasons - the efficiencies that can be gained by having the same people working in areas like marketing and sales for multiple teams - and some of that is because more teams mean more chances for championships, and that's profitable too. Walter, who's now got two World Series titles with the Dodgers, knows what that's like.
But the shift toward these ownership conglomerates also makes things a lot more complicated for fans who just want to know who's in charge of their favorite team - and accountable for investing in its performance.
When the Boston Red Sox announced their shock trade of Rafael Devers to the San Francisco Giants, there were a lot of baseball-related questions. Did the Red Sox realize they no longer wanted the expensive services of a one-dimensional player who had infamously refused to move to first base? Did they decide that the more than $270 million left on Devers' contract could be better spent elsewhere on the roster?
The deal raised some non-baseball questions too. Bill Simmons, columnist turned podcaster and media executive, noted that the Red Sox owners, Fenway Sports Group, recently approved the nine-figure purchase of midfielder Florian Wirtz for Liverpool FC, which they also own. Simmons didn't draw a direct connection between Liverpool buying Wirtz and the Red Sox dumping Devers' salary. However, the potential link still kicked off enough chatter in the Boston media that someone brought it up in a radio interview with Red Sox general manager Craig Breslow, who called it "completely untrue."
His denial is believable enough: Liverpool just won the Premier League and are hugely profitable. There's no reason FSG would need to shed salary in Boston to fund a purchase in northwest England. But it's also true that the Red Sox, once the crown jewel of FSG, are now just one part of a company that includes Liverpool and the Pittsburgh Penguins and counts LeBron James among its minority investors. As companies amass teams and bring in investment partners to help them acquire more holdings, it becomes harder to know who's in charge of what. When a storied franchise turns into just another corporation in Unwieldy Sports Group Inc., fans can be forgiven for wondering if this is actually good for their team, especially if they have no attachment to the other franchises in the portfolio. Put another way: Many Red Sox fans were unmoved by the fact that FSG signed a hotshot midfielder or gave a contract extension to Sidney Crosby. They wanted to see Rafael Devers keep socking dingers.
And the trend toward complicated ownership structures isn't reversing anytime soon. For decades, the NFL was the one league that emphasized simple stewardship of its teams because it wanted owners to be able to vote decisively on league matters instead of having to take questions back to a board. That's still technically the case, but NFL franchises have become so valuable that owners are now allowed to sell off chunks (up to 10%) to private equity firms. For all his foibles, no one doubts that someone like Jerry Jones wants to win championships. A faceless investment firm just wants a profitable return.
The Lakers, at least, seem like they'll chase both. No one can say Walter doesn't want titles. He's just added one more way to get them.
Scott Stinson is a contributing writer for theScore.