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If the Lakers Were a Stock, Would You Buy It? Josh Kushner and Bob Iger just agreed to buy the Los Angeles Lakers at a valuation of $12.5 billion, which would set a record for a U.S. professional sports franchise.¹ But forget for a moment that we’re talking about the Lakers. Imagine they were a publicly traded company. You could open your brokerage account tomorrow, type in “LAL” and buy the stock. Would you? I’m not sure I would, at least not at this price. Forbes estimates the Lakers generated about $551 million in revenue and $170 million in operating income for the 2024 to 2025 season.² At a $12.5 billion valuation, the buyers are paying roughly 22 times annual revenue and 74 times operating income. That’s expensive by almost any measure. It gets even more interesting when you consider that the Lakers were valued at approximately $10 billion just last year, when Mark Walter acquired control from the Buss family.¹ Now they’re being sold at $12.5 billion. That’s a 25% increase, or $2.5 billion, in roughly a year. If this were a stock that had just risen 25% and was already extremely expensive compared with its profits, I’d probably hesitate. But here’s where I start to understand the price. The NBA recently began new 11 year media agreements with Disney, NBCUniversal and Amazon worth more than $76 billion.³ That’s roughly $6.9 billion per year and represents an enormous increase in the value of the NBA’s media rights. Even better, people are actually watching. During the first season under the new agreements, national NBA viewership increased 35%, reaching its highest average audience in 13 years. Fans watched more than 920 million hours of NBA games, up 25% from the previous season.⁴ So Kushner and Iger aren’t simply hoping basketball becomes more valuable. The value of broadcasting NBA games has already increased dramatically, and the new agreements run through the 2035 to 2036 season. Then there’s something money can’t easily buy: scarcity. There are only 30 NBA teams, and there is only one Los Angeles Lakers. You can raise billions of dollars and start another technology company. You cannot create another Lakers with their 17 championships, history, global fan base and association with players like Magic Johnson, Kobe Bryant and LeBron James. There’s also an argument that the Lakers aren’t making as much money as they could. Forbes estimates that the Golden State Warriors generated approximately $880 million in revenue and $409 million in operating income, compared with $551 million and $170 million for the Lakers.⁵ That’s a huge difference considering the strength of the Lakers brand. And look at who’s buying them. Kushner built Thrive Capital investing in high growth companies, while Iger spent decades running Disney and figuring out how to make money from some of the world’s most valuable brands. They had actually been exploring the possibility of buying a future NBA expansion team in Las Vegas before the Lakers became available.¹ If they can generate more revenue from sponsorships, media, international fans and premium experiences, the Lakers could eventually become a much more profitable business. But that still doesn’t necessarily make $12.5 billion a good investment. Let’s say the Lakers eventually become worth $25 billion. Kushner and Iger would double their money, which sounds great. But if it takes 15 years to get there, doubling their money works out to less than 5% per year. That’s why the price you pay matters. So, if the Lakers were a publicly traded stock at a $12.5 billion valuation, I probably wouldn’t buy it today. I love the business, the scarcity, the growth in NBA media revenue and the possibility that the Lakers could make significantly more money in the future. I just don’t love the price. But Kushner and Iger have one consideration that a normal stock investor doesn’t have. If I don’t buy a stock today, I can probably buy it tomorrow. If they passed on the Lakers, they might never get another opportunity. Sources 1. “A Blockbuster $12.5B Deal as Josh Kushner and Bob Iger Agree to Buy the Lakers” 2. “Los Angeles Lakers” 3. “NBA Signs New 11 Year Media Agreements With The Walt Disney Company, NBCUniversal and Amazon Prime Video” 4. “NBA Regular Season Delivers Most Watched Season in Years” 5. “The NBA’s Most Valuable Teams 2025” |
Market perspective
If the Lakers Were a Stock, Would You Buy It?
