Bob Iger and Joshua Kushner are leading a group of investors to buy the Lakers for $12.5B.
That’s a big sports business story.
The group is circulating a deck to potential investors that claims the Lakers will be valued at $30B in a decade.
The numbers:
· Doubling of revenue
· TV and streaming rights doubled as well.
· Profits tripling from $129M to $589M.
All of this is based on predictions of a market we don’t know will exist.
The deck is all upside. No downside. No conservative estimates.
Only one thing in the deck is a strategic decision.
That decision?
The claim that the team will claw back 6,000 tickets from the secondary market. And that these tickets will increase in price from $217 to $361.
Everything is a projection except this.
Taking back tickets is the only strategy choice the deck shows.
The deck has a blind spot because it can’t see everything.
Iger and Kushner don’t know what brokers really charge. They can’t.
Platforms report total volume. Listing prices are averaged.
But no one looks at the true value of the relationship.
Pumping up the ticket prices is a smart move…in theory.
But the value of the relationship isn’t just a number. Part of it is a feeling of “I have a guy.”
That’s something that the deck doesn’t address. It can’t.
The value of that feeling is baked into the deck anyway.
It can’t even see why that doesn’t make sense.
The assumption the deck is built on says that people don’t care where they buy from.
This logic tells investors that they can capture the premium for Lakers tickets that is “leaking” into the secondary market.
Except it probably can’t.
The Lakers built a billion-dollar brand over decades. The Lakers became the hottest ticket in town.
They also set a premium that they can’t fully capture.
There is a part of the brand value that only works when they can’t charge for it.
That sense of “exclusivity.”
Buying from the box office undermines that feeling.
“I have a guy” does the opposite.
The ticket is a receipt for that feeling.
The growth imperative says that the numbers must always go up.
The deck doesn’t argue that the Lakers should be worth more…it assumes it.
Nobody asks if the number should go up. That’s just the air that the deck breathes.
It isn’t a real goal. It is a condition that needs to be met.
So, the brokers come out of the transaction. The numbers go up.
The relationship between the fan and the experience…never even considered.
You can have the best logic in the world and still destroy everything.
The Lakers aren’t unique here.
Everyone has something they can charge for…and something they can’t.
The things they can’t charge for are often the reasons that people buy.
But…the number must go up.
That makes it logical to try and quantify everything.
Some things can’t be measured.
That’s what the deck is missing.
DW