A group led by Joshua Kushner and Bob Iger made history by buying the Los Angeles Lakers for a record $12.5 billion last month. That is the highest price anyone has ever paid for a professional sports team, in any sport.
That number is small potatoes compared to what Kushner and Iger reportedly think the team could be worth a decade from now.
Advertisement
The new Lakers ownership group is telling potential investors the team’s value could reach at least $30 billion by the end of 2037, according to a copy of a presentation reviewed by the Wall Street Journal. The presentation was prepared by Kushner’s Thrive Capital investment firm.
That valuation is apparently dependent on the assumption that the Lakers’ television and streaming rights double in value over the same span of time. The group reportedly said the Lakers are on track to make $681 million in revenue in 2026, but could hit at least $1.6 billion a decade from now.
And should conditions turn out even more favorable, they reportedly project a long-term valuation of $62 billion.
These Lakers numbers are … something
For perspective, a $30 billion valuation is larger than the most recent Sportico valuations of the Portland Trail Blazers, Minnesota Timberwolves, Orlando Magic, Detroit Pistons, Charlotte Hornets, New Orleans Pelicans and Memphis Grizzlies combined.
Advertisement
To reach $62 billion, you can add the Denver Nuggets, Washington Wizards, Indiana Pacers, Milwaukee Bucks, San Antonio Spurs, Indiana Thunder and Utah Jazz.
It is, of course, not surprising that the people who just bought the Lakers are saying the team will soon be worth nearly three times what they paid. In fairness to them, the Lakers were projected to be worth $3 billion in 2016, so that number has theoretically quadrupled in the past decade.
To get there, Thrive Capital has a few ideas for changes the Lakers can make. They will probably not be popular with fans.
The presentation reportedly said the team can produce $150 million in incremental revenue by 2028, which would partially come by reclaiming around 6,000 broker-held season tickets and make them single-game tickets, raising the average price of the latter from $217 to $361. The new owners also reportedly plan to capture $40 million to $75 million in sponsorship opportunities and extract at least $20 million in operating cost efficiencies.
Advertisement
To translate: more expensive tickets (with more of the money going to the Lakers), more ads, and a not-small amount of cuts to the team’s operational spending, executed by people who said their “long-term commitment is to build on [Jerry and Jeanie Buss’] foundation, compete at the highest level, and serve this extraordinary team, its fans, and the city of Los Angeles.”
Thrive also reportedly believes the NBA’s TV fees, currently worth $77 billion over 11 years, will double when the current deal expires.
All of this comes as part of the Lakers’ ownership remains unsettled. The Kushner-Iger group purchased their majority stake from the currently besieged Mark Walter, who purchased control of the team from the Buss family last year.
Advertisement
The Buss family — by which we mean the six siblings of Jeanie, Johnny, Jim, Janie, Joey and Jesse — still retains a 17.8% stake in the Lakers through the trust of the late Jerry Buss. The non-Jeanie siblings have unanimously announced their intention of selling that stake to Kushner and Iger, while Jeanie has taken her siblings to court to stop any sale and affirm her total control over the family’s cut of the team.
Part of Jeanie’s justification for holding is her belief that selling doesn’t make sense given the team’s “continuously skyrocketing value,” which certainly aligns with what Thrive Capital is apparently telling people.
Read the full article here