Billionaire Mark Walter's sale of the Los Angeles Lakers NBA franchise could have implications for the Cadillac Formula 1 team. The sale was announced just 14 months after he bought the team for $10 billion.
Walter is CEO of Guggenheim Partners, an investment company that co-owns Premier League side Chelsea via BlueCo. He is also CEO and co-chairman of TWG Global, which owns a majority stake in the Cadillac F1 team through TWG Motorsports, alongside IndyCar and Formula E team Andretti Global and other motorsport entities.
Companies tied to Walter are under investigation by the US government and the Securities and Exchange Commission (SEC) in a wide-ranging probe. The latest development concerns four companies within his investment empire and alleged undisclosed loans between them.
Walter is offloading his majority stake in the LA Lakers just 14 months after he agreed to buy the basketball franchise. The Athletic reported that his controlling stake was valued at $12.5bn, whereas he purchased it for a reported $10bn.
The move stunned the National Basketball Association, as the LA Lakers was at least partially owned by Jerry Buss and his family for nearly 50 years. Walter's stake is now being sold to venture capitalist Josh Kushner and former Disney CEO Bob Iger.
The ownership of Chelsea FC has also hit headlines, with Walter and co-owner Todd Boehly reportedly in talks to sell their shares in the club to majority owner Clearlake Capital. Discussions to sell Chelsea precede the investigations but may have been accelerated by them.
Bloomberg has reported that Walter is selling off his stakes to raise money to pay loans on the books of his company's insurers amid the ongoing investigations.
Attention has inevitably turned towards the Cadillac F1 team. There are no concrete reports of a potential sale of TWG Global's majority and valuable stake as yet. However, the Financial Times' coverage suggested further sales of Walter's assets could be on the cards, plus TWG seeking to refinance loans, restructure companies and bring in outside investors.
One of the four intermediary companies being investigated is Bradford Allen, which is developing Cadillac F1's Indiana headquarters alongside Andretti Global's IndyCar facilities. The investigations, which have not brought a charge, do not implicate Bradford Allen in any wrongdoing, nor has the Cadillac F1 team been implicated in any way.
The recent sacking of Graeme Lowdon as Cadillac F1 team principal is also circumstantial at this point, and there is no implication that General Motors's ownership position on the F1 team has changed.
Given the sale of the LA Lakers was facilitated in a reported 72 hours, the situation is fluid and rapidly changing.
