I recently wrote about A24’s deal with Google DeepMind, AI-produced microdramas in China, Elon Musk’s plan to remake The Odyssey and Hollywood’s engagement trap.
Mark Walter is suddenly trying to unwind his bets on two of the most valuable pieces of sports IP in the world. The American billionaire is reportedly looking to sell his roughly 12.8 percent stake in Chelsea while preparing to sell the Lakers for $12.5 billion, barely 10 months after buying the iconic NBA team, to a consortium led by Bob Iger and Josh Kushner. (He isn’t currently trying to sell his 27 percent stake in the Dodgers — at least publicly.)
The timing is hard to separate from the flames engulfing Walter’s financial empire, forcing him to cut $6.5 billion in investments. Walter is the founder and CEO of Guggenheim Partners, the financial-services firm at the center of his holdings — and a whistleblower inside it set the federal investigation in motion. Investigators are examining whether Walter properly disclosed loans between companies he controls: Money borrowed from insurers Guggenheim owns and spent on acquisitions elsewhere in his empire. He used that structure to help pay for the Dodgers in 2012, though it’s unclear whether that deal is a focus of the investigation. The pressure to raise cash and unwind those loans appears to be what has him selling.
Walter, Guggenheim’s founder and CEO, has not been charged with fraud or other wrongdoing and says he and his companies acted properly. But the sequence is difficult to ignore: Walter made enormous, highly speculative bets on sports franchises and now appears to be bailing out as the financial machinery behind the bets comes under scrutiny.
The Lakers sale would represent a roughly $2.5 billion gain. That’s not team building. It’s a winning roulette spin that allows Walter to cash out before the house comes to collect its debts. And if this all feels questionable to you, you’re not alone — Walter’s team sales are a pretty good entry point to understanding the strange new sports economy, where the assets are scarce, the cash flows can be terrible and wealthy owners are betting that someone even wealthier will be the next sucker to take the bet.
Walter is hardly the first character to wander into this particular casino.
The Portfolio Guys
American billionaire John Textor came into soccer as an investor, assembling a multi-club portfolio in the top divisions of global football under the name Eagle Football Holdings, which included Lyon in France, Botafogo in Brazil and Molenbeek in Belgium, while also holding a large stake in Premier League’s Crystal Palace before selling it last year to New York Jets owner and fellow billionaire Woody Johnson.
The pitch was familiar: build a network of clubs, move players, data and capital among them, and make the portfolio worth more than its parts. Instead, the structure became a financial headache with mountains of complicated loans sitting on top of each other. Eagle defaulted on more than $450 million of high-interest debt and Lyon was threatened with relegation (a demotion to the second division) over its finances. Ares Capital, which had loaned Textor hundreds of millions to help finance the Lyon acquisition, ultimately pushed Textor out.
777 Partners took the concept even further, buying stakes in a portfolio of high-profile football clubs that included Genoa in Italy, Standard Liège in Belgium, Red Star in France, Vasco da Gama in Brazil, Hertha Berlin in Germany and Melbourne Victory in Australia, while pursuing takeovers of Everton and Sevilla. The logic was similar to some recent trends in global media: Netflix and Amazon have spent years investing in local productions around the world, using a single global platform to spread the cost of content across dozens of markets.
Miami-based 777 was effectively applying a similar portfolio logic to football — clubs in multiple countries sharing infrastructure and talent, with financial risk spread across a global network. The difference, of course, is that Netflix and Amazon can amortize the cost of making a hit show across a global subscriber base; 777 still had to pay every club’s bills. The empire unraveled amid mounting debts and disputes over its financing. Co-founder Josh Wander was indicted last fall by U.S. prosecutors in an alleged $500 million fraud scheme. A trial is set for October; Wander has already sought a pardon from President Donald Trump.
Different characters, different strategies, but the same premise: Sports teams are lousy, highly speculative businesses that demand owners with a tolerance for intense negative cash flow — but that can nonetheless eventually make those owners very rich. And that is precisely what makes them such a fertile playground for hucksters. If the objective is to make the asset more valuable, rather than to build a healthy club, the incentives can get badly distorted — and the institutions, players and fans are the ones left holding the bag.
The Franchise Is the IP
There is something distinctly Hollywood about this new sports-investment mania. For decades, Hollywood has understood that the most valuable thing isn’t necessarily the business that makes the content. It’s the content itself. A studio can survive losing money on individual productions that cost hundreds of millions so long as they develop healthy broader franchises. Disney doesn’t need every individual Marvel movie to be a financial home run if it owns the underlying characters.
Sports takes that logic to its extreme: The franchise is the IP, and unlike a movie or television series, nobody can make a competing version.
Chelsea shows how the new game works: lose hundreds of millions, endure chaos on the field — and still watch the asset soar in value.
Don’t stop here
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