We Investigated Magic Johnson, Mark Walter... and Your Nest Egg

0:00Welcome to Pablo Torre finds out I am Pablo Torre and today we're going to find out what this sound is In the end they are taking money from retail investors and that's the money ultimately that's being invested in funnel into these loans that should get screwed right after this I mean this is a story you can just like never stop reporting. I know that's the problem. Yes Yeah, I mean it's the problem of my summer vacation which you helped ruin Sam compliments I waited like two days. I waited two days to bother you But it's not every summer vacation when a multi-billionaire has their phone and laptop seized on their private jet And then it comes out that that same billionaire is selling the Lakers a year After buying the team that felt like break glass in case of emergency Pablo's music. Yeah Apologize to your daughter Because the Lakers got sold for a record 12 and a half billion dollars to Josh Custer and Bob Eiger

1:05And this week the NBA handed out arguably the biggest punishment in pro sports history While the SEC is also now probing dectronics and Oh, yeah, Mark Walter is a guy that people should probably be aware of Mark Walters insurance companies are shuffling billions of dollars of investments as he faces an intense federal investigation Into allegations of multi-billion dollar loan fraud the Department of Justice and the SEC are investigating whether Walter Allegedly used money from insurance companies he controls to fund his massive sports investments without proper disclosure When a billionaire sports owner is accused of self-dealing. I'm pretty sure you're gonna pick up the phone Yeah, the federal whistleblower parallel investigations by the DOJ and the SEC Couple grand jury subpoenas and Violet I'm sorry that I'm on the phone this much while we're on the beach Mark Walter is a very successful financial services

2:06Tycoon from the US and he co-founded a financial services business called Google and Hyme partners What has gone on to become an enormously successful fund basic asset manager huge amounts of assets under management? Los Angeles Dodgers the Chelsea football club Cadillac F1 team and up until recently to Los Angeles Lakers I don't think people realize how crazy this story is like there is a scenario in the multiverse where the guy that owns the Dodgers Goes to jail like it's crazy The number of podcasts I've listened to where people properly pronounce Finance finance finance All of it feels way too complicated for sports fans at first wrap their minds around because there's all this financial engineering and there's insurance stuff and Bond documents most people aren't Tidilated by insurance bond documents Pablo. I mean look I'd never assume that my kink is others, but there is I think a simple idea

3:08At the core of this which is that the public and this is like the through line of our show it turns out the public does need be insanely improbably impossibly wealthy owners of sports teams to tell us the truth by law about what their money is really doing Sports teams used to be owned by like the richest guy in a town and they love their team So much and they became successful or their parents were successful and then they used that money to buy the team But the thing is that sports teams have become this incredibly expensive asset And so these owners have to go to incredible extremes to raise money to buy these teams And that's how you end up with a Laker sale at $12 billion in the term people just need to understand here briefly is Leverage they are leveraging other assets to pay these insane prices on price-enated prices and leveraging Sam

4:11Just means they're using the money that they have to borrow more of it Right and with Mark Walter the big pool of money that he has access to is insurance money The way this works is basically Americans buy life insurance policies They come in two forms one is if something tragic happens to you You've paid into these insurance plans and money will be paid out to your family members who are left behind The other way is while you're working you can pay money into a life insurer something called annuities and you end up getting paid out Anuities later in your life. So you're investing today for some kind of payout tomorrow But the way insurance companies actually work is that they invest those upfront payments That's your parents and your grandparents give them this money with the insurance that they will get Something back in return as time goes on. This is the nest egg exactly and historically the insurance companies would invest in safe assets They'd buy bonds or real estate the kinds of things you could bet on to reliably over time go up

5:13But the problem with those things Pablo is that they're boring way more boring than sports teams because they don't Enable the owner of an insurance company to keep that much after they distribute to their policy So insurance companies they start buying more and more Out there kind of stuff higher upside investments exactly and a lot of this to be clear is legal The thing is there's one category of investment you're not allowed to make without proper disclosure And that's if you're using insurance money to invest in another one of your own businesses like say I owned an insurance company and also a Sesh one fish stew soup dumpling restaurant I couldn't use your parents and grandparents Insurance payments to invest in my dream of succulent soup dumplings filled with Sesh one fish stew Unless I disclosed that very clearly because people would then be able to understand the kinds of things their money is being used for and that

6:14Disclosure would be called an affiliate transaction, which is basically a deal with yourself Yes, and to regulators and undisclosed Affiliate transaction much like the purely hypothetical stew that you've been pitching us can start to smell It can smell like self-dealing and at a certain point allegedly fraud Allegedly that is allegedly what seemed to have happened with Mark Walter and his firm Guggenheim partners right but instead of the fish stew he was investing your parents and grandparents nest egg in sports and so this is where we got to say for the record that Mark Walters personal holding company TWG global WG stands for the Walter group has denied any fraud allegations saying last week that quote as it relates to Guggenheim while the Investigations originated with the whistleblower concern T WG and Guggenheim have demonstrated there was no wrong doing that there is no victim here that Affiliated transactions are common across the insurance industry in that they're not looking to sell their sports assets

7:20Including the Los Angeles Dodgers at fire sale prices to raise capital for its insurance Operations and quote you'll note that Walters company to not deny there that it's selling the Lakers in order to raise capital for his insurance operations But he did say pretty clearly that the Dodgers are not for sale. He's saying that we're not going to give this away at a discount No, no, no, yeah, we're gonna charge very high prices of anything unlike normal options where people say up front Hey, you're gonna get a really good deal on this because I desperately need money. That's not what's happening here No fire sale prices period. Yeah To be clear we have not proven Fraud here, but what I can say is that our team at Hunter Brook Media as well as the Wall Street Journal and the financial times and Bloomberg A lot of financial journalists have been very deep in those titillating bond documents this summer What it seems like happened is that Mark Walter and Guggenheim partners severely Underreported just how much money was mislabeled and never disclosed as an affiliate transaction and

8:24That total the total of affiliated transactions has gone from what his insurance had estimated to be around three billion dollars To now tens of billions of dollars twenty billion dollars some people say Significantly more and so this is the smell that the feds have been investigating and and we should also disclose here for people who have not been following How you guys at Hunter Brook Media approach really complicated stories like this? Yes, so here's how Hunter Brook works Hunter Brook Media my team is a team of incredible journalists and truth seekers of all kinds who go figure out what's happening in the world Hunter Brook funds all of this reporting with an affiliate Hunter Brook Capital that supports our journalism and sometimes based on our reporting The fund will take positions in the financial market and right now Hunter Brook Capital does have some positions Related to this Guggenheim investigation which you can see disclosed on our website hunter Brook.com and I want to be clear that in my personal opinion what's so interesting about Mark Walter is not just that there seem to be all these Affiliated transactions that he didn't disclose but that actually a lot of these transactions seem to have worked out

9:31He bought sports teams at discounts and as in the case of the Lakers got some pretty crazy upside returns Yeah, as an investor the bet being sports will go up is what his earlier statement was fundamentally alluding to and and look The thing that I did not appreciate about that Increase over time until I start reporting the story myself is that the biggest reason for that increase the biggest catalyst behind this Centuries boom in sports team valuations is Arguably Mark Walter Himself he bought the Lakers at a then record $10 billion valuation last fall before that 2022 he bought a chunk of Chelsea in Premier League football at a then record valuation of well over three billion dollars Alongside his partner Todd Bowley who is also now looking to sell But the very first time Guggenheim partners bought the most expensive sports franchise ever It was about 15 years ago. It was 2012 It was Major League Baseball and Mark Walter bought the Dodgers at 2.15 billion dollars

10:36And in fact Sam even the people who had heard of Mark Walter Had no idea in 2012. How in the hell you was rich enough to buy the Dodgers in the first place In your folder in front of you you will find our pal Andrew Ross Orkin Writing in the New York Times deal book section in 2012 this A quick background check and some back of the envelope math raises an obvious red flag How on earth can this group of individuals afford to pay two billion dollars in cash The answer is that they probably can't at least not by themselves In addition to their own cash Mr. Walter plants to use money from Guggenheim subsidiaries that are insurance companies Some state regulated to pay for a big chunk of his purchase of the Dodgers But I think there's an even bigger reason that Mark Walter was able to dodge all sorts of scrutiny especially from The world of sports despite paying more than double Double the previous record for an American pro sports team, which was the dolphins

11:37um and the reason Was somebody else on his team? That's a beautiful day to be out here and uh a ballpark that I've spent many days eating Dr. Dogs and eating popcorn and Watching the Dodgers win world series and Watching some of the greatest baseball players in history play for this great organization We want to I remember being at sports illustrate in 2012 Sam and we did a cover shoot with magic Johnson He was on the cover of SI behind home plate at Dodger Stadium And it will be unsurprising to anybody's listen to the show which has investigated magic johnson's twitter account before That Pablo Torrey finds out they do everything from potential insurance fraud to an investigation of magic johnson's twitter account and then somehow The two of them finally finally they overlap in all of his tweets about the Dodgers a couple of which also happen to be in the folder We've ready you

12:37On november second 2025 magic tweeted a bunch of trophies Yes, let me count them one two three four five six seven eight Sorry, do we know how is it his total trophy counts? I believe it is in fact trophies. Yeah, I mean that's explained in the next tweet Incidentally What you have in front of you says 18 championship rings for me Ncaa championship with ms u 11 Lakers five playing five as an owner and one as an executive one LA sparks one LFC One team liquid. That's an esports team not a Communion brand for the whole story we're talking about and now three with the Dodgers. Yeah, this was uh all after the Dodgers one that second straight World series last November But to the employees the actual people inside of Guggenheim partners sam which is mark waltz's investment and advisory financial services firm It was always clear that the actual controlling owner of the Dodgers Was in fact their boss mark waltzer himself In part because the Dodgers were part of waltz recruiting pitch for his company as one former Guggenheim insider

13:43An attorney who agreed to talk to me on the condition of anonymity due to the ongoing federal investigation explained In 2014 I was working in compliance at a hedge fund and I got a call from the compliance officer who I work with at a previous firm and She basically described her new role and mentioned that the job was pretty tough for it You know these people over there were a very different breed than what she used to the people who she was responsible for Working with more billionaires She was looking for somebody who had my kind of experience looking at things for ends of we I was an auditor in my past you know with money laundering expertise We're diving in and you trying to understand financial transactions and who's at the bottom of things So that's always got my start working at good and home partners This source under voice modulation. I should also add Brought decades of experience in compliance to Guggenheim when they got hired But this job the new job that they got had another

14:46Particularly difficult dimension to it because they had to help build a compliance program for Guggenheim from scratch And history we did not know the real reason we know we just hired to do this and you know I really told us but then we came to understand There is a this SEC investigation while we were hired into Todd Bowley barring 15 million dollars from one of the clients that client was Michael milk and who is Famous for some of the inside of trading back in the 80 those cases resulted in a 20 million dollar fine as part of that settlement Good and hard to create this group. That was the group that we were there for So we're designing this program Part of it is to make sure people like mop water Todd Bowley do not borrow money from clients Guggenheim did not have your typical client base High net worth of businesses their client base were primarily insurance companies. There was equitrust

15:49There was security benefit the real life Those were the clients Pablo we were supposed to tell this story in his digestible way Now we're on insurance company. Of course fans can learn to love compliance and compliance We're on Michael milking the junk bond king of the 80s. Yeah, who took a plea deal admitting to securities fraud and reporting violations But not officially Insider trading to be clear and at this point I can just hear people begin to glaze over because I get it but I just need to assure people Sam that the journey we're about to go on here that yes involves everybody from the Dodgers and Mattic Johnson to the Lakers and Lebron James This journey is going to simplify what does seem admittedly quite complicated That's the thing about these kinds of stories these kinds of arrangements They are often Intentionally inscrutable. It's very hard to understand what's happening because billionaires are very good at making LLCs and entities and making money flow

16:53In a way that's much less direct than you sending money to your friend on Venmo But it's not actually that different no it's actually people paying money to other people to get something in return And what these people got in return in this story Why this matters is that this story helps explain Why mark Walter sold the Lakers just a year after buying the team it helps explain how magic Johnson got caught up in a news cycle About potential insurance fraud And why magic Johnson should be concerned based on the new findings were about to share here today About the federal governments ongoing investigation. It helps explain what happens to your every day Investments what happens when you buy a life insurance policy What happens with every single one of those dollars Between when you pay and when you get that money back and the truth is in the background billionaires are doing all kinds of creative things with your money that we will explain in this episode if you stick with us

18:18So one thing I realized after spending the last few weeks talking to our compliance attorney source is that their job at Guggenheim as mandated by Mark Walters SEC settlement Wasn't quite set up to succeed We kind of realize that the culture at Guggenheim born is totally bowing to these people Mark Walter Todd Gulley these the burying is And now I have to create something that stops them. So while Arthur will hear is you know Couple hundred grand compliance officers is to try to put ourselves in the middle of that like okay, that's this is not gonna be easy And it wasn't easy even when a transaction smelled like bullshit This transaction that came in late 2015 and December this one really looks strange I was a hundred million dollar loan and the other piece to it is there was pressure

19:18There was a lot of pressure on this one they needed the money fast Instead of giving us documentation on who beneficial owners or they would give us charts Very crude charts that you could make on Like our PowerPoint type thing Our policies and procedures that we were developing were like no we can't just rely on some ham-riching chart that somebody owns an entry Literally get one ham-rich charts and so forth And at first the compliance department tried pushing back on these weird charts requesting more documentation and further disclosure on this nine figure transaction But regrettably According to our source The compliance people gave in to what their bosses ultimately wanted And they let the loan through Whenever you compromise yourself and do something like that, you know, it's eventually getting it come back and Watch it because we just promised that to the SEC that we're gonna stop this Which is ridiculous actually we think about it because I was feeling pressure and you know they paid really well

20:23This was the upper echelons of any financial firm I had ever been with People really wanted to be poor in the team who wants to be the outsider there Guggenheim's head of compliance for the record would tell the financial press that his department examined all the loans during this time period That none were handled improperly and all had no your customer due diligence But the reality of Guggenheim compliance as our source explained it It just can't be stressed enough here The team that these insiders were all invited to be a part of Was not only high-flying Guggenheim partners It was also the literal Los Angeles Dodgers Which brings us to yet another source with a very good memory Who had to vet the most astonishing mark Walter transaction of all David Samson can you tell our audience what you were doing back in 2012 In 2012 I was the president of the Miami Marlins one of 30 teams majorly baseball one of the 30 teams who votes

21:29On all sorts of things including anytime a team is sold And you get a memo written by the commissioner's office that explains every deal But what's always more interesting at owners meetings or the conversations that happen on the side of What is really going on the Dodgers were in chapter 11 bankruptcy back in 2012 Because the owner was Frank McCourt who is involved in a divorce from his wife Jamie McCourt They're arguing figuring out how to split up assets and Baseball wanted to get out from under the McCorks So There was a sale process There were several bitters Mark Walter and Guggenheim were a bitter the now owner of the Metz Stephen Cohn San Cronkey was a bitter for the Dodgers The result was that all three parties were right around the same number. Let's call it one and a half billion dollars

22:32Had you heard of Mark Walter before he bid on the Dodgers? I had not he didn't have a sports empire at that time We assume that Magic Johnson was a celebrity endorser. He's an icon in LA It's like having a friend of the court. It's like walking around with the Pope And Mark Walter definitely was walking around with Magic Johnson a lot We spoke to a former Guggenheim employee who said sometimes magic which is show up in the office Yeah, and one of people in those offices was our Guggenheim compliance attorney who pointed out wearing Magic Johnson as this Brand and or costume while entering the world of sports Kind of made sense What will seem very shy and quiet That like magic everyone's gonna gravitate towards everyone's gonna want to talk to you never have to be the center of attention But establishing sports credibility in Los Angeles was just step one I think the most fascinating part of this story is what happened after All of those bids that Samson mentioned came in around one and a half billion dollars All three parties bidding for the Dodgers were in the same neighborhood

23:33Then one day we got information from baseball That a deal had been struck that we needed to approve Where the Dodgers would be sold for over two billion dollars to Mark Walter and Guggenheim The first question that everyone in the owner's room asks What happened? The reason Mark Walter increased his bid For the Dodgers Was that at the same time Mark Walter and Guggenheim got and deal themselves from Major League Baseball Where they Had a cap given to them of how much broadcast revenue would be subject to revenue sharing Which essentially means that the MLB allowed the Dodgers to keep more of the money It was making from its TV rights deal in exchange for Walter buying the team at a higher price

24:34And that very special arrangement you'd imagine would be very Infuriating to say the Miami Marlins So why would we not be furious? What would be told to us by the commissioner that would make us say oh, you know what? I understand why you're doing that deal hold on And one big reason it turns out that David Samson was not as mad About that deal was the sheer amount of broadcast revenue that Mark Walter's Dodgers were about to get in their new Hallevision deal a regional television deal which would also set a record and even if it was limited in terms of sharing Was still gonna be a significant amount of revenue to share with yes the David Samson's of the world Yes, and right away in December of 2012 shortly after being approved as the new owner of the Dodgers voted in by the likes of the Marlins Mark Walter starts a new limited liability company called American media productions

25:36LLC which has precisely one publicly known asset to this day and it's a regional television channel The exclusive home of Dodgers games in the Los Angeles market with Vince sculley doing play-by-play And it's named SportsNet LA which debuted in 2014 And so how much Sam did sports net LA owned by Mark Walter agree to pay the Dodgers Also owned by Mark Walter to broadcast Dodger games exclusively Walter agreed to pay Walter 8.35 billion dollars over 25 years. Oh That's the impetus for the increased bid It was all concurrent. It's not being reported correctly People are thinking because the TV deal started in 2014 that it was not thought about in April of 12 It makes me laugh like all of a sudden Mark Walter paid two billion for the Dodgers and said hey Let's negotiate a TV deal give me a break 334 million dollars a year for a local rights deal in major league baseball tier of my eye

26:43How does that compare to other regional TV deals? I negotiated my Tushy off with Fox To get 80 To this day in average of $334 million a year doing the math over the course of those 25 years Rebains by far The largest regional sports television contract that there has ever been Perhaps because as you point out mark Walter was negotiating with mark Walter And yet the sheer amount here was not even the most insane part Sam of this historic deal Yes, because in addition to the deal between mark Walter and mark Walter There was a third party involved here and that's time-order cable which guaranteed the entire 8.35 billion dollar 25 year contract in the event that sports net LA also known as time-order sports net LA Couldn't make their payment to the Dodgers time-order essentially agreed to backstop the deal yes like Derek cheater against the ace

27:47Or or your parents guaranteeing the purchase of your first department As in if mark Walter could not come up with the money to pay mark Walter that record setting some of TV money time-order cable would And this part I did not understand at all from the perspective of time-order cable and so I once again turn to an MLB team president Who was hoping to use this new time-order deal that the Dodgers got as precedent to extract a better offer from the Dodgers Previous television partner Fox sports you're asking whether it makes sense what time-order did and you're talking to someone who was in the room with Fox executives When news of this had become out like the day before and the guy was negotiating with looked at me and said don't Don't Don't David Do not bring up the time-order deal we're not using that as anything That is an overpay that they're going to live to regret from the day they sign it We're pissed that we lost the Dodgers, but we wouldn't have paid that no chance and yet

28:52If you go to the LA Times You can find this photo. We're going to show it here taking in February 2014 Because there is a grinning magic Johnson who with his right hand if you look closely Is eating a handful of grapes off a paper plate with the Dodgers logo and with his left hand Is giving a celebratory pound to a time-order executive who is wearing a blue suit and tie a Dodgers blue suit and tie But there was as always with the story yet another Very important reason that magic and mark Walter and team Guggenheim were celebrating They were able to use that guaranteed $8.35 billion deal with time-order to offset the $2.15 billion Guggenheim paid for the Dodgers in the first place as in the actual baseball team All of which is to say mark Walter basically made money the second he bought the Dodgers It was a win-win-win for team Guggenheim

29:56But there was Because there's no free lunch A problem Yes, usually when it seems like there's a bunch of free money Someone is in a tough spot and in this case time-order cable sports still had to figure out a way to fund Their unprecedented TV contract with the Dodgers which Proved almost impossible for a time because time-order sports net LA only aired in a third of the LA market And all these other major pay TV operators like the ones David Samson was begging to make a deal with They refused to carry this new channel According to the Los Angeles Times citing its hefty distribution fee Which basically just means time-order paid a certain amount of money for the Dodgers rights And then they were going to try to charge the other channels some kind of profit And those other channels were like Absolutely not Which means that there was another loser worth considering in this story The people who live in LA

30:5670% of the fans in LA lose No one would pay the Dodgers network the fee that the Dodgers network was asking for This struggle between time-order cable and direct TV and dish and you vs. I think basically they've said we're not paying time-order cables as we're not lowering the price So if you're Dodgers fan good luck you probably ought to laugh it's wild that this happened for years A majority of Dodger fans could not watch their favorite team Because of the deal that enabled Mark Walther to own their favorite team I just can't get over how long this blackout lasted And you'd think that in a situation like this things might start getting hairy for Mark Walther the new owner of this team who's got this entity with this giant tv Right-steel time-order sports net LA But less than two months after the channels debut in February 2014 something fascinating happened While the games were blacked out Someone provided a huge capital infusion to time-order sports net LA and its parent company

32:00American media productions whose only known asset again is sports net LA And this part and there's always another part in this story I did not realize until we along with your team of truth seekers at Hunter Brook Media Started examining a trove of insurance company financial statements Because in your folder now Sam is this annual statement filed with the Arizona Department of Insurance Which shows that this special someone who came To help out sports net LA was equitrust life insurance company Which you may recall as the very sexy sounding company that our insider was talking about earlier and Down on page 93 of equitrust's financial statement Down here at the bottom of the page There's a table full of loans that equitrust is made You will see what other name Sam American media productions LLC

33:03aka amp aka mark Walther's company that own time-order sports net LA And When these loans were made Sam on April 25th 2014 when equitrust was using The payments from america's parents and grandparents to loan amp this money How much money did they loan A combined total of 350 million dollars And so it's probably important that we now point out who the owner of equitrust life insurance company was As of this date April 25th 2014 As of April 25th 2014 equitrust owner was mark Walther's Guggenheim partners And was this transaction disclosed As an affiliate transaction by either side here No even though either side is the same side Making this yet another apparent example of the kind of alleged self-dealing that the federal government

34:05Has been interested in Raising the question of how mark Walther justified this lack of discretion Which does seem now potentially relevant to the ongoing federal investigation Raising a question for us of how did mark Walther justify this lack of disclosure Unfortunately his company has not responded to 100 bucks repeated requests for comment And they have not responded to ours either But what we did find is a press release Sam this is from one month before the launch of sports in that LA we are now in January of 2014 and This press release is from the governor of illinois Quote governor Pat Quinn today joined equitrust life insurance company to announce that the company is opening new offices in illinois that will create 200 jobs in the coming year Equitrust also announced that urban johnson is becoming a controlling shareholder of the company

35:10Oh, yeah, just btdubs magic johnson is gonna be controlling the life insurance company that mark Walther's a MP would soon be borrowing 350 million dollars from Which takes us to an article from Forbes Sam It's waiting in your folder because this also meant what Magic johnson is now a billionaire quote equitrust is now the biggest asset in the magic johnson Enterprises portfolio and with johnson as its majority owner and it represents just how far he's come as a businessman Do we know how much magic johnson paid to acquire equitrust We do not And the deal for the record was not completed until June 24th 2015 and so if you're not wondering as we're in 2015 How much the business of time Warner sports net LA was losing That same year the answer reportedly was more than 100 Million dollars a year Sounds like a great time for magic johnson's life insurer or mark Walther's life insurer to give them hundreds of millions of dollars

36:16And 2015 for those scoring at home was also Incidentally the year when Todd Bowley Walther's partner aforementioned coloner of the Dodgers left Guggenheim And he did not respond to a request for comment and so just to recap our new reporting here Sam for those who do not find insurance Quite as sexy as you and I do equitrust which is this life insurance company was being sold by mark Walther Two magic johnson his fellow Dodgers co-owner And it was also loaning 350 million dollars to mark Walther's media company The media company he had started to pay his and magic Dodgers an average of $334 million a year through this record setting local TV deal that mark Walther gave to mark Walther And in the process magic johnson transformed into a billionaire I have to ask Pablo what did your inside source in the compliance department of mark Walther's Guggenheim

37:21Say about this deal was the sale of equitrust from Guggenheim to magic johnson approved by legal was the loan from equitrust to The Dodgers TV station approved by legal were the terms deemed fair Yeah, I mean, it's a very good question And so I asked our compliance attorney at Guggenheim who was ostensibly doing the KYC reviews to know your client due diligence Would your group have been asked to do a KYC on magic or or on that deal for equitrust or no No, we did not no, we did not we did not know it at no and so that That probably should have been something that was You know escalated internally and cleared or wouldn't you like that's what our group was designed to do To know just to clear any kind of Conflictor transaction. So probably should have been do you have a sense as to what the primary motivation would be for why mark Walther's sold equitrust to magic johnson I think that magic johnson helped them out with the dodgers deal That's what I ultimately agree I thought I think they trying to help out a friend, you know give him a level of wealth that

38:27Maybe he didn't have before right at which rest put him on the map of being a leader who's a massive increase for right That's an incredible friend to have yeah, I don't know how many friends They've ever bid on the planet that have effectively gifted transacted an entire insurance company to someone else None of my friends ever And so we did sam was we took these allegations from this insider at guggenheim compliance To mark Walther's company and they did not reply when we reached out to magic johnson His spokesperson did not respond to our request for comment But there was another entity of course that we had to go request kabat from and that entity I think Is the most inexplicable of all of the characters we've discussed so far And that's time Warner cable Everybody acted kind of rationally here if they wanted to make a lot of money Except for time Warner cable which made a deal that on day one looked bad

39:27Crazy and in fact before day one In 2012 fox Express that same view before the team was officially sold to mark Walther and guggenheim and magic johnson In court foxot ridden affirmation as the previous rights holder for the dodgers games That time Warner cable incorporated or an affiliate is not part of the group buying the equity interest of the dodgers And fox also sought affirmation that the buyer mark Walter and guggenheim had not already made formal or informal agreements with time Warner cable or any other media outlet For a new contract To be clear this is time Warner cable's competitor being like this makes no sense and the dodgers according to the la times Ultimately did provide fox with both of those affirmations that they requested although david samson once again for the record Remember is it quite differently People are thinking because the tv deals started in 2014 and was announced in January of 13

40:32That it was not thought about in April of 12 It makes me laugh But a funny thing happened when we went to go look for comment from the time Warner executive who was responsible for this deal This is david ron who was the president of time Warner cable sports at the time David ron of course being the same executive we saw smiling and fist bumping magic johnson In that photo of the grapes in the la times when they launched sports net la in 2014 This is the man in the dodger blue suit Whose comment it turns out would prove difficult to obtain sam for a particularly relevant reason Because david ron who brokered this big tv deal the biggest in history of its kind He has since perhaps unsurprisingly Left time more and where did david ron wind up going Ha ha david ron was hired by none other than mark walters Guggenheim partners as a senior managing director serving as the quote company wide head of strategy

41:39This despite according to the financial times him having quote no direct investment management experience Which is all to say that david ron in so many words officially became part of the team who wants to be an outsider And the title that david ron now has at guggenheim you may not be shocked to learn is managing partner Not a bad place to land after making what seemed to be one of the worst tv deals of all time from time Warner's perspective A deal so bad time Warner had to report it in its filings Repeatedly as a real risk to its business before time Warner eventually sold to charter communications But there was some good news for time Warner cable which had again guaranteed the length of this More than eight billion dollar deal to the Dodgers which is that american media productions They got that loan from equitrust for three hundred and fifty million dollars from Mark Walters Life insurance. Yes, and it wasn't the only mark Walter linked life insurer to give a loan to american media productions

42:45In total according to the author nick nemeth of the mispriced assets sub stack who reviewed some even more sexy bond filings There were four other life insurers tied to Walter who loaned a grand total of 1.45 billion dollars to american media productions Which provides some cushion for time Warner before it needs to guarantee the proverbial first apartment on that deal And so we had lots of questions of course for david ron and for time Warner about all these payments But When we asked about how we felt about the deal for time Warner sports netl a that infuriated these other teams About any of these conflicts of interest potentially About whether his deal making with the Dodgers influenced his eventual landing spot with mark Walter at guggenheim He did not respond Not over linkedin where I sent the messages And a spokesperson for guggenheim partners did not respond either But ron did say way back in 2013 that the deal quote

43:46furthers are efforts to attain greater certainty and control over local and regional sports programming costs Be collapse of regional sports television aside, which is a larger story perhaps a sequel to this saga I do want to take us back to the present tense Because it is worth noting Sam That veteran sports business journalist john or rand Recently reported something kind of perfect which is now maybe a bit of a coda to this part of the story that we have since confirmed Which is that before mark Walter Agreed to sell the lakers to Josh cusher and bob auger the whole deal that kicked off the news cycle that got us interested in this in their first place mark Walter first tried to do something else He approached the company which now owns time-water cable and thus sports netl a's multi-billion dollar albatross of a deal with the Dodgers This is charter communications and Walter offered to terminate that beautiful

44:47television contract early even though it runs through 2038 If charter would just give him a lump sum payment right now Unfortunately for Walter according to that reporting those talks went nowhere and that's when Walter decided he would sell the lakers for $12.5 billion dollars instead Although Dodgers president and co-owner stan caston has repeatedly told reporters quote The lakers sale had nothing to do with the Dodgers It has not impacted the Dodgers and is not going to impact the Dodgers With mark waltzers company also adding last week in part quote the allegation that the Los Angeles Dodgers were acquired or have been funded improperly Is false and not supported by the facts The Dodgers transaction with subject to significant scrutiny and complied with all rules and regulations that govern the purchase of major league baseball teams and quote brings us to one last question for our friend david samson who was a part of major league baseball's own scrutiny and compliance process

45:49with mark waltzers Do you think any part of bud sealeg the commissioner of baseball any any part of you and your fellow owners feels a little silly Given that maybe this all wasn't Exactly how it was presented I would do it again and twice on sunday was silly to the opposite it was the springboard from which these amazing valuations have come If you asked bud and he were honest with you He would tell you that his main job was not the fans. It wasn't the players His main job was to increase the value of the 30 teams And he did it with this deal that was cut with mark waltzers If the Dodgers sell for two billion dollars you get to walk into the bank and say look what the marlins are worth right now And bud sealeg for what it's worth did tell the athletic that he does not recall whether he was concerned at the time about all of this insurance money flying around

46:51Which is to say nobody was mad at mark waltzer and magic johnson for allegedly making these deals with mark waltzer and magic johnson Because that deal met everyone who owned an mlb team was richer Yes, it is the same reason why Adam silver and NBA owners several of whom we have investigated together are Incredibly excited that mark waltzers lakers just sold for 12 and a half billion Dollars. I don't know what's gonna happen to people's insurance policies. I hope that they're okay But I do take comfort going to sleep at night Knowing that the billionaires are even richer because of mark waltzer. Thank God. I'll drink to that But the story is not over yet Sam because while all these billionaires who own sports teams are thrilled about all of these developments

47:56The question of how magic johnson himself has been operating a life insurance company the thing that Forbes pointed out Is the biggest asset in his portfolio the thing that made him a billionaire That question remains interesting to both our group and high compliance source as well as it seems the federal government Yes, and I want to start by saying magic johnson did not run equitrust alone to be the president and CEO of equitrust Magic entrusted and appointed one of his closest friends a guy named Eric hollumn who before getting into the life insurance Business was the president of a company called magic johnson enterprises and if you're a fan of the wmba You may recognize him also as the governor of mark waltzers wmba team the la sparks This is magic's guy and I know that because if you go to at magic johnson over on twitter You can pour over his many exclamation points to see that he has mentioned Eric hollumn

48:58At least 20 times that we saw including two tweets about how magic brought hollumn to hang out at the White House A decade apart including as magic's plus one when he won the presidential Medal of freedom from Donald Trump alongside denzel washington Yeah, quote, I want to congratulate my great friend denzel washington on receiving his presidential medal of freedom today as well Is just a great humble break The kind that we've come to appreciate from at magic johnson which has by the way likewise tweeted about equitrust More than a dozen times with commentary such as quote I want to introduce my team at equitrust to the world Exclamation mark ed quote It wasn't some kind of secret that he owned a life insurer and for that matter It wasn't a secret that he was tight with mark waltzer who he also tweeted about again And again and again Yes, the guy who sold equitrust to magic in the first place Bring us to this tweet in your folder sam from the same month that the FBI seized Walter's phone and laptop

50:04I'm excited about the new la sparks state of the art practice facility Which will be the best in all of the wnba. I want to congratulate my sparks partner and new lakers owner Mark waltzer as well as my business partner Eric hollumn for making this dream facility come to fruition Just three months before this tweet speaking of dream facilities Walter had announced you may recall that he was buying the lakers at that record setting 10 billion dollar valuation Which magic yes also tweeted about quote lakers fans should be ecstatic a few things I can tell you about mark He's driven by winning excellence and doing everything the right way and he will put in the resources needed to win But in terms of what you can tell us sam about how equitrust did things what resources they were using to win What are the insurance filings tell you when you poured over them in terms of their SEC disclosure My team looked through all of these filings and found an insurance company that seemed to resemble mark waltzer's approach

51:07We found one example for instance where equitrust had made an investment in an entity called jlc And then when you look up jlc you see that it's an infrastructure focused investment business Where magic johnson is a co-owner and hollumn is a managing director That's insurance money from magic johnson's insure going into a totally separate investment fund run by magic johnson and hollumn It's all one big spider mad meme which feels Very obviously affiliated in other words. It sure seems affiliated But if you look at equitrust 2025 annual statement just like its prior statements It places jlc positions in the unaffiliated section and reports no affiliated invested assets in the relevant totals And the reason this all matters Pablo isn't because like we love regulations and rules and disclosures It's because when you buy an insurance policy, it's a contract one that says if anything happens to you your loved ones will be all right That's sacred and you want to make sure that between now and then

52:09Your insure isn't taking that trust and using it to enrich themselves through a totally separate business This is ostensibly what the federal government would be interested in And yet as magic's personal responsibility here is concerned I do think it was important for us to note near the end here Another note about equitrust life insurance company Which is that as of last november amid this ongoing federal investigation Magic did something else reminiscent of mark Walter He stopped being the controlling owner of equitrust When you look at the documents you see very clearly that last november equitrust was sold to another company Called amestad financial which is notable if you follow Finance because right now according to the Wall Street Journal Amestad financial is one of the four entities linked to mark Walter That have been caught up in the DOJ and SEC investigation into Guggenheim partners that we've been talking about this entire time

53:14And who is in charge of amestad Sam? Amestad's managing founder is Eric Holland magic's right hand man And what was that transaction like how much did hollamon pay to magic for equitrust There's not that much known about how exactly this purchase went down How much if any of equitrust magic johnson still owns what we do know is that amestad took out a big loan To be able to buy equitrust and that fish the ratings agency downgraded equitrust outlook to negative after this transaction And so what does this mean then for magic's exposure In terms of the federal government It's a little bit unclear But what we do know is that the entity formerly known as equitrust magic johnson's insurance company is now Part of an insurance company being actively probed by the department of justice that's run by magic johnson's best friend Eric Holland And so we of course reached out to magic about this part as well and got nothing back from his rep

54:20None of these people are Talking we did not get anything from hollamon either Or amestad for that matter But I do want to note here just briefly Something about the name amestad Because I do think for people who maybe are familiar with this even spielberg movie There are some profound meanings that one might infer one of them of course refers to the historic slave revolt that took place on a Spanish ship named the amestad and the subsequent historic 19th century usapreme court case about the freedom of those very brave men But the other meaning more literally is in spanish friendship And it's certainly a great act of friendship to buy your friends Life and sure at a time when it may or may not be under the scrutiny of the department of justice And you'd think given the scale of this transaction it seems like amestad raised three billion dollars of debt in part to buy equitrust

55:21You'd think that magic johnson might celebrate this transaction the transaction that made him a billionaire But despite the fact that he tweets about almost every single thing in his life The sale of equitrust was not mentioned by at magic johnson once Which is conspicuous given how often he tweeted about equitrust in aric column and previously One might say conspicuous indeed Which leaves us wondering Briefly I think about the people who entrusted their money to equitrust in amestad and magic johnson in aric column and mark Walter Because these people Are the ones who helped enable these billionaires to financially reengineer this booming sports landscape and by these people Pablo means you The ordinary americans whose money has been used to help fund the purchases of these sports teams as they've gotten ever more expensive and the question that we need to then ask as we assess the risk of these investments is

56:24What if all of this given how we understand mark Walter boosted the prices of these teams What if all of this is also taking the shape of a bubble as our compliance attorney source explains So it's amazing that this entire system is built on retail investors So they have an entire retail investor base in these life and insurance policies They've got a constant cash flow into their insurance companies from like john q public or a parent that buy a new reason life insurance Ultimately, that's what's feeding all this. That's why the government state government regulars are so concerned They're trying to protect the public who have these life insurance policies and annuities from one day holding the bed Just in the end these insurance companies when we've seen this in the past But what if everything goes wrong and they blow themselves out they just go bankrupt that's what rich people deal They just go bankrupt and leave the individual people

57:24The policyholders in the end they are taking money from retail investors and that's the money ultimately that's being invested in funnel into these loans that's who gets screwed Okay, fine. This maybe is not actually a sexy story, but there is grueling There is screwing someone is getting screwed over here and it's not magic johnson and it's not mark water It's potentially the ordinary americans whose money is being invested in the billionaire versions of szechuan fish stew soup dumpling restaurants And as the federal government is chasing down that smell We are in late July This is after the news for us broke about the investigation into guganide partners And something Amazing happens on television Which is that the man who avoided being the center of attention for so long mark Walter Decides to visit the man who has always embraced it

58:27Does this man happen to live in the same house magic johnson has visited repeatedly with his business partner arocoloman not only that Mark Walter brought to this very special house a very special gift Thank you. Wow. Oh, that looks good We'd like to present this to you as uh, oh wow Oh, you have to be kidding Wow Do I have to report this? I don't want to report this That's beautiful. Thank you for your name on this show That's right There's Donald Trump wondering if he needs to disclose That he now owns a Dodgers world series ring Which led me to ask our source what he thought about his old boss in that video And my opinion is like why he's leaving cold to the map

59:28Can you imagine what that conversation was like? It's just been announced that he's under investigation by the southern district of me Which is being run by a guy that an image he Clayton who's now like the head of the Intelligence service for entire country And you know you'd love to hate Trump people come to kiss his ring right? That's it. I mean here he comes to give him a ring and then kiss it right so he's like He's had pretty unbelievable actually For what is worth Sam nobody I have talked to in the world of sports can remember the owner of a professional sports team awarding A championship ring to a president at the White House ceremony itself Which in retrospect At least to me seems something like an invitation For Trump to do something that magic Johnson and Eric Holleman and David Rohn and even our voice Modulated compliance attorney source at Guggenheim Had all done before to varying degrees of regret It seemed like an invitation to be part of the team

1:00:31You Publicory finds out is produced by Walter Averoma Maxwell Karnie Ryan Cortez Juan Galindo Patrick Kim Nilly Lohman Rob McRae Matt Sullivan Claire Taylor and Chris Tuminello studio engineering by RG systems sound designed by Andrew Bersick Digital strategy by Bailey Carlin and Andrew Northern theme song as always by John Bravo With additional reporting for this episode by JD John Jacques Vicus Kumar and Matthew Termini You can read much more by the way over at 100 book media site that is hntr brk.com And our team We'll talk to you next time