Billionaires are taking over sports teams — and that’s a risk for fans

{"text":[[{"start":4.53,"text":"Mark Walter has bounced. The financier and founder of credit investor Guggenheim Partners has announced the shock sale of the Los Angeles Lakers basketball team to former Disney executive Bob Iger and Josh Kushner for $12.5bn just a year after buying the team, in a move that underscores just how much the nature of sports ownership has changed."}],[{"start":25.347,"text":"In the 1940s, when Walter O’Malley began purchasing interests in the Dodgers baseball franchise, he was a mere internal lawyer for the team. By the time the Los Angeles Dodgers were acquired in 2012 for a then record-setting sum of $2bn, the bidding consortium was led by high financiers at the cutting edge of private capital. The leader of that group was the same Mark Walter who has now sold the Lakers."}],[{"start":49.52,"text":"It isn’t hard to see why billionaires have acquired an outsized role in sport. A long-running bull market in private capital has swelled their coffers and allowed them to buy superyachts, mega-mansions and, increasingly, trophy teams. But their objectives are very different from the previous generation of owners."}],[{"start":null,"text":"

"}],[{"start":67.01,"text":"Families such as the O’Malleys derived their income and wealth largely from sport and passed on teams through generations. But for financiers, sports franchises are part of broader portfolios and teams risk getting caught up in the disparate affairs of their owners."}],[{"start":81.48,"text":"Walter’s insurance empire is being probed by federal prosecutors over how it classifies investments tied to other parts of the financier’s business interests, the FT has reported. The proceeds of the Lakers sale could be used to solve pressures to divest insurance or recapitalise insurance balance sheets."}],[{"start":99.435,"text":"Mat Ishbia, the owner of Lakers’ rival Phoenix Suns, is facing his own financial reckoning. His listed mortgage finance titan United Wholesale Mortgage lost $600mn in a recent hedging transaction and cancelled its dividend, worth hundreds of millions of dollars, some of which Ishbia relied on to plough into his basketball team."}],[{"start":120.08,"text":"Such team owners have faced wobbles despite the prolonged bull run in equity and debt markets. But with inflation high and equity valuations toppy, it is conceivable that financiers more broadly are going to face meaningful stress. Some may be forced to unload artwork, cars and even beloved sports teams, especially where these trophy assets are another line item rather than a life-long passion."}],[{"start":144.421,"text":"Traditionally, sports owners offered long-term stability and few outside distractions. Many turned small investments from the 1940s into hundreds of millions of dollars or even billions when they eventually sold out this century. The billionaires paying top dollar may be less loyal and less sentimental about their newly acquired franchises. Fans, well used to heartbreak on the pitch, should gird themselves for more in the off-seasons."}],[{"start":175.44,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1786675044_8739.mp3"}