Less than a year after Mark Walter paid $10 billion for the team, he flipped it like a piece of real estate. But if there is a bubble for professional sports team ownership, it hasn’t shown any signs of popping yet.
The news that billionaire venture capitalist Josh Kushner and former Disney CEO Bob Iger are buying a controlling stake in the Los Angeles Lakers at a record-breaking $12.5 billion valuation, first reported by ESPN Wednesday morning, came as a shock in more ways than one.
The deal breaks Walter’s own record for the purchase of a professional sports team, less than a year after his $10 billion deal to take a control interest from the Buss family—who sold the team after 46 years—closed last October, and once again resets the rest of the market for the rest of the NBA. This year has also included record-breaking team sales in the NFL and MLB. Venture capitalist Vinod Khosla led an investor group that agreed to buy the Seattle Seahawks for $9.6 billion in August, and private equity manager José E. Feliciano’s family reached a deal in May to buy the San Diego Padres for $3.9 billion.
The decades-long surge in sports team values hasn’t been a linear trajectory—before Walter’s $10 billion splurge for the Lakers last year, the highest prices ever paid for control stakes in sports teams were Bill Chisholm’s $6.1 billion acquisition of the Boston Celtics last year and Josh Harris’ $6.05 billion deal for the Washington Commanders in 2024. Sports teams are generally valued as a multiple of the revenue they generate, and when one person is willing to pay a much higher premium than the prior consensus, it often raises valuations across the entire league.
In 2000, for example, the average team value in the NBA was $207 million, or 2.6 times a team’s estimated revenue, according to Forbes data. By 2013, that average value had soared to $634 million after years of steady revenue growth, but the typical multiple was still only 4.2 times revenues. That was before Los Angeles’ other NBA team presented a shock to the system, arguably more than any sale that has come since, when Clippers owner Donald Sterling, amid a scandal in which he was caught making racist remarks, was forced to sell the team and Steve Ballmer paid what was thought to be an exorbitant $2 billion price in August 2014. That premium lifted the average NBA team value by 74% in a single year, from $634 million to $1.1 billion. Ballmer’s investment has done just fine for him, with the Clippers valued at $7.5 billion last October.