Mark Walter is now facing a federal investigation into his business dealings, and a new report has brought Magic Johnson into the story. Hunterbrook reviewed regulatory filings involving EquiTrust, the life insurance company Johnson bought from Walter’s Guggenheim Partners in 2015. Hunterbrook reported that EquiTrust listed transactions involving businesses tied to Johnson and Walter as “unaffiliated,” even though the deals involved businesses connected to both men. Prosecutors are investigating Walter’s business empire over potentially undisclosed related-party transactions.
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One of those transactions involved a $350 million loan from EquiTrust to American Media Productions, the Walter-controlled company that operated SportsNet LA. The network carried Dodgers games and paid the team hundreds of millions of dollars each year under its TV deal. Hunterbrook also reported that EquiTrust was later sold to Amistad, another company tied to Walter. None of these transactions, by themselves, establish wrongdoing by Walter or Johnson, but they are now part of reporting surrounding the federal investigation.
The Clippers investigation came up when Pablo Torre appeared on PBS NewsHour with William Brangham. Brangham brought up Torre’s investigation into how the Clippers allegedly evaded the salary cap and the NBA’s decision to punish the team, noting that the two cases involved different leagues and different people. He then asked Torre if he saw a connection between them. Torre said he did, pointing to the scrutiny that comes with owning major sports teams.
“We are scrutinizing the wealthiest people in America because they own our favorite things. And that accountability, that mechanism of rules potentially mattering in sports is what enabled an accountability to be imposed upon the richest owner in American sports, Steve Ballmer,” Torre said. “But the question of, did you break the rules and do we need to enforce the rules because we care about sports?”
Torre’s point comes after the NBA handed the Clippers one of the most severe punishments in league history. The league suspended owner Steve Ballmer for one year, fined the franchise $30 million, and took away five future first-round picks after finding that the team had violated the salary cap rules in its dealings with Kawhi Leonard.
The NBA found that the Clippers had discussed and negotiated a deal with Leonard before the start of the 2024 free-agency period, when teams were not allowed to negotiate with free agents. The league also found that the team had failed to preserve text messages and other communications relevant to its investigation.
That is what Torre sees as the common ground. The Clippers case produced a direct ruling from a sports league, while the Walter investigation is still ongoing. In both cases, however, the question is whether the rules governing sports owners actually have teeth when the people involved have enormous business interests outside the teams they own.