Magic Johnson and Mark Walter Lead Acquisition of L.A. Sparks
UPDATED: The deal, separate from their ownership in the L.A. Dodgers, was engineered by Johnson to keep the money-losing WNBA in Los Angeles.
The Los Angeles Sparks WNBA team has been acquired by an investment group led by Earvin "Magic" Johnson and Mark Walter, the controlling partners in the Los Angeles Dodgers. The sale price and terms were not released.
The investment group also includes other Dodgers co-owners Todd Boehly, Robert Patton and Stan Kasten, but the deal is separate from the ownership of the Dodgers -- a $2 billion deal in March 2012 that was financed primarily by Guggenheim Partners (which through a subsidiary also owns The Hollywood Reporter).
NBA legend Johnson and Walter indicated in statements that they were motivated to invest in the Sparks to save the franchise and keep it in Los Angeles. "The leaders of this great city came together quickly to keep this franchise right where it belongs," said Johnson.
"Earvin came to me and said we need to help save the Sparks and keep them in Los Angeles," said Walter. "The decision was quite easy for our investment group due to the passion Magic has for this city, these great athletes and our phenomenal fans."
Until January, the Sparks had been owned by Williams Group Holdings, led by Paula Madison, Carla Christofferson, Kathy Goodman, and former WNBA star Lisa Leslie. Goodman and Christofferson were fans of the team who bought it from the late Jerry Buss, owner of the L.A. Lakers, in 2007. The ownership was reorganized and new investors were brought in for the 2011 season.
The Sparks play their games at the AEG-owned Staples Center. The new owners said that would continue to be their home at least for the 2014 season. It is unclear how long the contract with Staples runs. The WNBA season begins in May, when the NBA regular season has ended, and runs through October.
Plagued by losses that reportedly were about $12 million over the past seven years, the Williams Group walked away from the ownership at the beginning of this year. It was the league that put the franchise up for sale. It was considered crucial for the WNBA to continue to have a team in the No. 2 TV market.
Six of the other franchises in the 12-team league are owned by NBA basketball teams that subsidize them, and in many cases also have access to public funds to help defray arena and other costs. Those NBA teams also have clout to get a share of revenue from arenas that sell special skyboxes and even concession and parking revenue. It is not clear what share of that the Sparks got.
The WNBA does have a TV contract with ESPN for what is essentially a game of the week (18 per season). NBA TV also carries some games. Currently the Sparks have a deal signed in 2012 to carry from 18 to 25 of their games per season on the year-old Time Warner Cable SportsNet, the premium cable service created largely to carry the games of the Los Angeles Lakers.
When the Sparks announced its local TV hookup in 2012, it only revealed it was a "multiyear" agreement without specifying further. That could be significant, as ultimately one way for the new owners to get additional revenue could be by moving Sparks games to the Dodgers' new premium cable network, SportsNet LA, which launches Feb. 25. SportsNet LA is owned by the Dodger ownership but managed by Time Warner Cable.
The Sparks said in the Wednesday announcement that the TV schedule for the coming season will be released shortly. The Sparks are one of the original eight teams that formed the league. They have had their share of success on the court, winning the league championship in 2001 and 2002, and making the playoffs in three of the last six seasons, most recently in 2012. The league MVP, Nneka Ogwumike, and 2012 rookie of the year, is the star of the team.
However, women's pro basketball has never caught on with local ticket buyers or TV viewers the way men's basketball has, and it is hard to see how that is going to change.
Johnson, who since retiring as a player in 1996 has become a businessman and civic booster, said in his statement the new owners will work together to bring another championship to Los Angeles. However, that suggests spending even more money to get top players at a time the team is losing money. There will also have to be much more intense marketing to bring in a larger number of fans and viewers.
The new owners, even as individuals, have deep pockets. The ultimate question is how much patience they will bring to the Sparks endeavor.
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