Report: Magic Johnson’s Ownership Group Using Insurance Money to Supplement Cash for Team’s Purchase

Report: Magic Johnson's Ownership Group Using Insurance Money to Supplement Cash for Team's PurchaseWhen Magic Johnson's ownership group bought the Los Angeles Dodgers for $2 billion, two thoughts likely came to mind.

One, fans were likely excited that Magic would be taking over as the face of a franchise badly in need of some star power after Frank McCourt's disastrous tenure. Two, where the heck did they find all that money?

It turns out that the new ownership group is turning to Guggenheim Partners, a risk management firm, to help shoulder the financial load. One of the members of the ownership group is a president at Guggenheim, and they could be using the company's assets to help pay for the Dodgers.

The ownership group "plans to use money from Guggenheim subsidiaries that are insurance companies — some state-regulated — to pay for a big chunk of [the] purchase of the Dodgers," writes Andrew Ross Sorkin in the New York Times.

Magic and co., according to Sorkin, "appear to be living out a childhood fantasy using other people's money, some of whom may not even realize it."

While Sorkin points out that the Dodgers will likely appreciate in value, therefore making it a sound investment in the end, he does mention that the new Dodgers owners may not have told Guggenheim investors where their money was heading. What if they're Giants fans?

Yardbarker

Follow

Get every new post delivered to your Inbox.

Join 208,523 other followers