Magic Johnson’s business relationship with billionaire sports mogul Mark Walter has yielded three World Series championships for the Los Angeles Dodgers and a WNBA title for the Los Angeles Sparks. Their longstanding partnership is now under scrutiny after a financial firm partly owned by the NBA legend reportedly extended more than $2 billion in loans to businesses linked to Walter, who is currently under federal investigation.
According to Bloomberg, Amistad Financial Group, which lists Johnson as a minority shareholder and board member, along with its subsidiaries, loaned around $1.26 billion directly to Walter’s companies between March and June of this year, with another $1.06 billion reportedly provided to intermediaries who’ve previously helped funnel loans to Walter’s various business interests.
Walter is currently under investigation by the Justice Department and the Securities and Exchange Commission for allegedly failing to disclose that more than $20 billion in loans on their books went to other businesses tied to Walter. There is no indication that Johnson participated in or was aware of the lending decisions made by Amistad and he’s not on the company’s three-person executive committee.
Two of Amistad’s subsidiaries, Equitrust Life Insurance Co. and Heritage Life Insurance Co., were behind a large portion of the recent lending to Walter. Some of the loans reportedly went to businesses connected to Walter’s stake in Carvana and his investment in the Billie Jean King Cup, a women’s tennis competition named after the barrier-breaking tennis great.
Johnson and Walter’s partnership in sports ownership dates back to 2012, when Guggenheim Baseball Management, of which Johnson is a member, purchased the Dodgers for $2.15 billion. The ownership purchases continued when Walter and company bought the Sparks in 2014.
Walter is currently working on a plan to reduce debt owed to his insurance companies amid concerns from credit rating agencies. Earlier this year, he agreed to sell his majority stake in the Los Angeles Lakers for $12.5 billion to a group led by former Disney CEO Bob Iger and Josh Kushner, the brother of noted Trump envoy Jared Kushner. Earlier this week, he reportedly expressed interest in a sale of the Sparks for $700 million.
The business mogul’s insurers reportedly had about $24 billion invested in his affiliated businesses, which is nearly 45 percent of their total invested assets.
