Ever since Mark Walter took on principal ownership of the Los Angeles Dodgers, the club has dominated and altered the status quo in MLB with its financial muscle. But fast-forward to now, and Walter’s decision to offload his Lakers ownership has sent shockwaves across the MLB community. And while Dodgers fans are now concerned about the future of their team following the Lakers’ ownership shakeup, ESPN’s Jeff Passan shared something far more unsettling for both the club and its owner.
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“While affiliated investing is not inherently illegal, when it’s up to 40% of investments, that’s where fraud can happen,” Passan said in a conversation with Jeff Blair via Sportsnet 590 The FAN on X.
Mark Walter, the chief executive officer of Guggenheim Partners, which includes entities such as Delaware Life, is accused of channeling billions of dollars in private credit and loan assets tied to entities under his common control. Those assets were reportedly funneled through his insurance firms, but were previously misclassified or undisclosed as related-party transactions.
Upon further investigation by federal authorities, it was revealed that Walter’s insurance companies reclassified upwards of $16 billion to $20 billion in investments as “affiliated” or related-party assets. They surged these holdings from roughly 3%–5% to over 40% of their portfolios.
This is why Passan voiced the concerns.
“Mark Walter, according to filings, had disclosed that only three percent in one of his life insurance companies, only three percent of the investments that they were making were in companies that were affiliated with Mark Walter’s business empire. Upon looking back through it, that number actually grew to 42 percent,” Passan added.
While related-party transactions and corporate loans between an owner’s businesses are legal, strict statutory accounting rules require full disclosure. Hence, there are risks that Walter could face prosecution. As is, the fallout has prompted massive portfolio adjustments.
It was reported that Walter’s holding company, TWG Global, is buying billions of dollars’ worth of those affiliated assets off the insurers’ books while moving to scale back parts of his vast sports empire. Offloading the investment in the Lakers was part of that move.
Thus, Dodgers fans concerned about their team’s future are understandable. However, Dodgers president and CEO Stan Kasten has a message for them.
“The Dodgers are not being sold, they’re not going to be sold, they’re not for sale. There is no process that has been started to sell, period. We are planning only to win… As I said to you last time, the Lakers thing was one of those one-of-a-kind things that really has nothing to do with what’s happening with the other teams or us,” Kasten had a mic-drop moment.
While Kasten assured the Dodgers’ future, Mark Walter’s challenge is looking far more complex.