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What makes a basketball team worth $10bn?
00:17:26
We look at the record-breaking sale of the LA Lakers
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Guy Kilty
Hello and welcome to Business Daily from the BBC World Service. I'm Guy Kilty. Today we dig into reportedly the most expensive sale of a US Sports team in history.
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BBC Narrator
The Buss family has agreed to sell the majority ownership of the Lakers to Mark Walter for a cool $10 billion, the highest ever for US professional sports franchise.
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Guy Kilty
Earlier this year the family, which has owned the Los Angeles based basketball team, the LA Lakers for the last 45 years, sold their majority stake to new owners in a deal that valued the Lakers at a record US$10 billion.
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Trevor Lane
The Lakers are the biggest basketball franchise. The Lakers were a big part of the NBA coming onto the world Stage in the 1980s.
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Guy Kilty
The LA Lakers are one of the biggest names in US sport and they've been a huge part of the national basketball association. But $10 billion? How can a sports team be worth so much?
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Andrew Zimbalist
It's been extraordinarily successful as an entertainment entity and as a basketball team and they generate a lot of publicity because they have all of these famous people who show up at their games.
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Guy Kilty
We'll try and break down how the Lakers have reached this valuation, see how that money compares to other sports teams around the world, and find out what impact this $10 billion sale will could have on global sport. That's all coming up in Today's Business Daily. June 2025 and the shock announcement comes that the legendary Buss family, owners of the Los Angeles Lakers, are selling up in the NBA and outside it. This is huge news. The owners of one of the biggest teams in the League, if not the biggest, are getting out. And the new owners already own one of Los Angeles baseball teams, the Dodgers. Here's what some Lakers fans thought about the deal just after it was announced.
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Lakers Fan 1
It's kind of sad in a way because me being a Lakers fan, been here all my life, I like the fact that it's been Jerry Buss family being in control. But the good thing is they have more resources to get players. I'm kind of hurt about it because, you know, the Buss family, you know, owned the majority of the Lakers for a long time. But I think it's a good move in the long run. I feel like having some new ownership and everything would actually do us good in the long run.
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Kurt Badenhausen
I've been a Laker fan for 40 years now, and the bust name has been, you know, synonymous with the ownership.
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Lakers Fan 1
For that period of time.
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Kurt Badenhausen
So I was very surprised.
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Guy Kilty
While feelings may have been mixed amongst fans, Lakers legend Magic Johnson was impressed with the deal. He posted on social media site X that it was a job well done by his sister, Jeanie Buss, for striking an incredible deal and picking the right person to carry on the Lakers legacy and tradition of winning. So who are the Buss family?
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Trevor Lane
Jerry Buss purchased the lakers back in 1979, and then when he passed away some years ago, it did transfer over to his children. And this was a big surprise that the Buzz family would ever sell.
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Guy Kilty
Trevor Lane is a senior writer and podcast host at the LA Lakers news website Lakers Nation.
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Trevor Lane
We were operating under the belief that they would most likely just retain control of the franchise for the foreseeable future, that they were not going to sell at any given point. So there is a little bit of a bittersweet element of this, I think to Lakers fans because the Buss family has owned the team for so long and because they saw so much success under Dr. Jerry Boss, winning the championships that they have. But I know there's a lot of excitement too with the new ownership coming in. So it's a strange transition because for a lot of Lakers fans around the world, myself included, we haven't known anybody else other than a member of the Buss family to own the club, or at least be the primary owner of the club.
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Guy Kilty
Jerry Buss made his money in real estate and then started investing in sports franchises in the late 1970s. Under the ownership of the Buss family, The Lakers won 11 NBA championships, the most for any franchise during those years. In total, they've won 17, putting them second on the all time list behind the Boston Celtics who've won it 18 times.
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Trevor Lane
The Lakers are something that have become generational not just in Southern California and Los Angeles, but around the world. You've got people who are Lakers fans, who are now multi generation fans. They were Lakers fans because their parents were Lakers fans because their parents were Lakers fans. So there is this rich history and tradition around the team. They've had a who's who of superstars and the NBA is a very superstar driven league. We're talking about the likes of Kobe Bryant, of course, LeBron James, now Luka Doncic, Shaquille O', Neal, Magic Johnson, Kareem Abdul Jabbar, Wilt Chamberlain, Jerry West, I mean so many stars. The first superstar ever in George Mik in the NBA. So the Lakers have always attracted the attention of basketball fans. They're a very polarizing club. Whether you love them or you hate them. There are a lot of Lakers fans, there are a lot of people who will also root against the Los Angeles Lakers. And quite frankly, there is always something interesting going on with the club.
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Guy Kilty
The new owner of a controlling stake in the LA Lakers was announced as Mark Walter, a billionaire American businessman named one of the most influential figures in sport by Sports Illustrated magazine. He's involved in baseball, basketball, Formula One, football, tennis and hockey and was previously a minority owner of the Lakers. Andrew Zimbalist is a sports economist at Smith College in Massachusetts.
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Andrew Zimbalist
Mr. Walter is the CEO of Guggenheim Partners which is a private equity firm worth hundreds of billions of dollars. And they own also the Los Angeles Dodgers and they also own other sports assets as well as the non sports elements in their portfolio. So they're, they're individuals in their company that has experience with how to take the best advantage of, of a sports asset of a sports team. And because of that experience and because of their their perch over the sports industry and understanding its connections, they're well positioned to be able to exploit this asset.
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Guy Kilty
Most Lakers fans and commentators agree that the Buss family did a pretty good job of managing the team. And it's not over completely for them. The family will retain a 15% stake in the Lakers and Jeannie Buss, Gerry's daughter, will carry on her current role as team governor for the foreseeable future. But it does beg the question, what will the new owners want to do differently? One answer might lie in the way the Lakers use their home stadium, the 19,000 seater Crypto.com arena previously known as the Staples center in downtown Los angeles.
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Andrew Zimbalist
It's about 25 years old. Believe it or not. That's Old for a sporting facility as new opportunities for revenue develop over time. Older arenas and the older stadiums don't necessarily have all of the the revenue generating accoutrements that the newer stadiums have. So opportunities for signage and sponsorships are greater in newer arenas. Opportunities to wire a facility to make it easier to do sports betting. You find newer telecommunications infrastructure in the newer arenas. Opportunities for developing non basketball events might be easier in some of the new arenas. So I think fundamentally you've got a successful asset and what Walter will be doing is looking at ways to connect that asset to other assets that he owns and that Guggenheim Partners owns in the sports industry and outside of the sports industry.
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Guy Kilty
While some Lakers fans seem positive about the deal, they still don't know whether it will affect them financially. No announcement has been made as yet about any ticket price rises. The average ticket for a Lakers game currently costs between 170 and $270. And if you want to be courtside, you're looking at thousands of dollars. You're listening to Business Daily from the BBC World Service. I'm Guy Kilty and today we're digging into the LA Lakers, the US basketball team which has recently been sold by the legendary Buss family who ran it for decades for a record $10 billion. So what makes a basketball team worth that much?
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Kurt Badenhausen
I think there's two things really driving this. A better recognition of the scarcity value of these assets.
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Guy Kilty
Kurt Badenhausen is a valuations reporter at the sports industry news and analysis website Sportico.
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Kurt Badenhausen
When you think about the NBA, there's 30 of them. It's been more than 20 years since they had a new franchise, been more than 25 years since they added an NFL franchise. There's 32 of them. They're not adding any more of those for a long time. And then the economics of these franchises have improved dramatically. Much better. More owner friendly collective bargaining agreements that have cost caps on players, which is your biggest expense item by far for a sports franchise. And the assets keep appreciating in value because you see more sophisticated buyers come in and look at these assets. The values and growth of the values don't necessarily correlate with the rest of the market. So it's a non correlated asset. When you compare it to stocks, bonds, I mean basically it just keeps going up and up and up and up and up. They don't decline in value. So I think that has helped allow it. Those family offices that want to dabble in sports team investments, I think it's given it more cover or Solidified it as a real asset class.
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Guy Kilty
The LA Lakers aren't the only team who've been involved in a multi billion dollar takeover deal this year. In March, their great rivals, the Boston Celtics were bought in a deal worth $6 billion. For both teams, a key factor is the broadcasting deal. The NBA, which comprises of the owners of all 30 teams, signed with ESPN, NBC Universal and Amazon in 2024. That deal is worth $77 billion over 11 years, far higher than the one that came before. And with the NBA splitting that money equally between the teams, that means all of them are a lot richer in 2025 than they were in 2024. There's also a player salary cap that keeps costs down. And on top of the NBA's broadcast deal, each team can negotiate their own local TV deal. Reporter Kurt Badenhausen.
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Kurt Badenhausen
Again, if you drill down on the local level, the two things that are the real drivers, it's your venue and it's your broadcast contract. The Lakers are unique in both respects. They have the best broadcast contract in the Sport, got roughly $200 million for their local TV rights last year from.
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Guy Kilty
Charter Communications, as well as broadcast rights keeping the cash flowing in and a wage cap keeping costs down. The introduction of private equity into basketball in the last few years has massively impacted valuation. The league changed its rules in 2020, becoming the first US sport to allow private equity funds to buy into teams. Hockey's NHL and the biggest sport in the U.S. the NFL, have followed suit since then.
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Kurt Badenhausen
For so long, basketball teams and sports teams in generals were run like mom and pop businesses. You sold some tickets, some hot dogs, collected a little TV check and that was it. And it's really only been in the last couple decades, the teams have started to really profit off of from sponsorships, from premium seating. And now, and as the expansion in global broadcast rights have also been beneficial. And now they're paving the way for the for the next stage where data is king. And teams are trying to figure out they have all this data now on their fan base and how do we monetize our fans better, both locally, nationally and internationally. So that's a big step forward that teams and the leagues are all trying to figure out right now.
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Guy Kilty
And it's not just sports teams in the US enjoying high valuations and big investment. According to Forbes, Spanish club Real Madrid is the world's most valuable soccer team worth around $6.75 billion. Manchester United is the second most valuable at 6.6 billion. Christina Filipou is an associate professor in accounting and Sport Finance at the University.
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BBC Narrator
Of Portsmouth in the uk, American franchises tend to be much higher valued than, say, for example, Premier League clubs. Even though the Premier League has got a global brand, they operate in an open league. There's promotion and relegation in and out of football globally. And what that means is there's more risk. So if you're looking at a sport franchise as a, you know, quote unquote asset class, so you're buying a sport franchise instead of buying a yacht or another business, then there's more risk attached to buying into something like the Premier League, where if your team consistently doesn't do well, it doesn't kind of translate as well, sort of long term. You can't just keep selling for a higher price if your team doesn't keep doing well and if they get relegated, then they're going to be worth less. Whereas with closed leagues, so NBA, NFL, Major League Baseball, you can't get relegated, so the risk is much less, which means the profits are much higher. So you're getting more money every year.
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Guy Kilty
With a $10 billion valuation. How much of a marker have the LA Lakers set for other teams in the US and around the world?
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BBC Narrator
It always has an impact, but the impact does go two ways. So one way is, you know, if you've got one of the top NBA teams and you're looking to sell, then you'd be like, hey, we're better than the Lakers, or we're equivalent to the Lakers and that's how much they're valued at. So this is my asking price. We, we saw a lot of that in European football with AC Milan and Chelsea got sold and then suddenly, you know, football clubs in Europe, their valuations kind of skyrocketed as a result because it, you know, it is effectively a comparative exercise. Well, look how much they're worth. This is how much we're earning in comparison. This is where we're based, this is how valuable we are. So it'll have that kind of upward effect, but it also has a sort of a dampening effect because it might, and again, if I look use English football as a comparison is people think that they can get a lot more to sell a particular club and then they might, nobody might be willing to sump up at that particular point. So they just hold onto it even though they're not really interested. And that can have a negative impact on the whole ecosystem because, you know, every, every sports franchise is in a league and the league is dependent on all the teams within that. So it can have a negative effect as well as a positive one, having such a high valuation in there.
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Guy Kilty
Sports economist Andrew Zimbalist thinks team valuations in the US Are only going to go one way.
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Andrew Zimbalist
Well, there is a knock on effect, there's no question about that. Sports leagues in the United States used to prohibit corporate ownership and that used to prohibit private equity. And that was for reasons of control. But then as franchise values went higher and higher and higher, right? If the Celtics were bought by the Grusbeck family back in 2002 and they, they paid $360 million for it, they just sold it for $6.1 billion, right? So it's going, it goes up 15 or 16 or 17 fold over a 20 year period. And one of the things that happens as the value goes higher and higher is that the old families, the old time families that used to own and manage franchises don't have enough money anymore. So you have to bring together individuals in private equity groups usually or in other forms. You bring them together to raise their money together, put their money together so they have enough money. So when you, you allow private equity, they didn't used to allow private equity, now they allow private equity. What that means is that there's more money that flows into that market than used to be there. And one of the reasons why the NBA and the other leagues have now allowed private equity in is because they know that private equity is going to push the price of franchises up. And if it pushes the franchise price up for the Celtics or the Lakers or the Knicks or some other team, then that's going to lift everybody else up. It's a signal to the, to the marketplace that NBA franchises are worth more than they used to be worth.
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Guy Kilty
At the end of last month, the NBA Board of Governors officially approved Mark Walters purchase of the Los Angeles Lakers. Shortly after, after it was announced that two of the Buss family children had left their roles at the club. With their sister Jeanie Buss, the last family member remaining in her role as governor, Lakers fans will be watching closely to see what else the future might hold. That's all from this episode of Business Daily, produced and presented by me, Guy Kilty. Thanks for listening. To hear more, just search for Business Daily wherever you get your BBC podcasts.
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