The American Sports Plutocracy Is Bullshit

Derek Thompson

SubscribeSign in

The American Sports Plutocracy Is Bullshit<br>American sports laws amount to a kind of out-in-the-open conspiracy to help a lucky few billionaires get much, much richer

Derek Thompson<br>Aug 14, 2026

53

Share

Photo by Kyle Richards on Unsplash<br>This week, the businessman Mark Walter agreed to sell the Los Angeles Lakers to venture capitalist Josh Kushner and former Disney CEO Bob Iger. Walter had agreed to buy a majority stake in the Lakers just last summer, in a deal that valued the team at $10 billion. The latest deal values the iconic franchise at $12.5 billion, a 25 percent premium for roughly a year of Walter doing pretty much nothing, other than getting himself investigated for potential fraud.<br>Since last summer, federal agents have seized Walter’s phones and computers, and federal investigators have combed through transactions involving his insurance companies and the rest of his business holdings. Under pressure to raise billions in capital to clean up his books, Walter went looking for liquidity, and it came pouring from the heavens. From the Wall Street Journal:<br>With his business empire under scrutiny from federal investigators, Mark Walter was on the hunt for cash when, out of nowhere, he was about to be offered an enormous pile of money …<br>Joshua Kushner, the chief executive of Thrive Capital, was reaching out with a potentially gigantic offer. All he wanted to know was, would Walter be willing to sell the Los Angeles Lakers?<br>Over the following days, they ironed out one of the most sudden and shocking deals in sports. By Wednesday, Kushner and former Disney chief executive Bob Iger had agreed to buy a controlling stake in the storied franchise at a $12.5 billion valuation, the highest price ever paid for any sports team.

That Mark Walter is getting an Everest-sized pile of cash for doing less than nothing while perched atop an iconic asset is bullshit. But its rank putrescence is merely one piece of a larger societal turd: Billionaire sports ownership is, as a general matter, a cavalcade bullshit.<br>In an age of surging wealth inequality, where stock market valuations routinely outpace median income growth by surreal factors, there is a live debate over whether billionaires should exist at all. The strongest argument for their rightfulness is that some people amass ten-figure wealth by building companies; by working within free markets to invent new technologies that millions or billions of people choose to use; and by managing complex enterprises that create billions or trillions of dollars in consumer welfare and investor value. But even this steelman case for billionaires presents as a kind of taunting insult to what often passes for sports ownership today. Professional-sports ownership offers the already-impossibly-rich a unique opportunity to become vastly richer, not necessarily by working, building, inventing, or doing anything positive at all, but rather by merely sitting on top of an asset that American law has conspired to make absurdly scarce and luridly profitable.<br>This Substack is reader-supported. To receive new posts and support my work, consider becoming a free or paid subscriber.

Subscribe

The American Sports Conspiracy

A thought experiment. Imagine if a diabolical oligarchic elite wanted to build an efficient and low-risk machine for turning their already-elevated wealth into exospherically extreme wealth. What might such a devious group of self-serving plutocrats want?<br>Unleash the forces of capitalism! you might think. But no, absolutely not. Capitalism is markets, and markets are ruthless. What you should want is legal permission to create a monopoly that builds a moat deep enough to keep all competition out. That way, you’ve got something much better than capitalism: artificial scarcity and pricing power without the risk of unwanted rivals.

Get the government off your back! you might say. Wrong again. You know what’s nicer than getting the government off your back? Getting the government on your side. You should crave dependable government subsidies to pad your profits.

So say, for example, that you wanted to set up this money machine in American professional sports. Your devious plan: shield leagues from antitrust law so owners can enjoy monopoly profits; use that market power to extract money from local governments; and rewrite the tax code to hand sports owners special advantages.<br>Lo and behold, all of this exists.<br>Sports leagues are basically legal oligopolies: It’s perfectly legal to open the 31st grocery store or ice cream shop in your city. But you cannot declare yourself the 31st NBA franchise and join the NBA. The league’s existing owners control whether the NBA expands and who receives a franchise. Major sports leagues are de facto cartels with the power to block entry and competition. This artificial scarcity drives up the value of every existing franchise by insulating it from...