KJS DC 10-26
Last month in a piece called “The Securitization of Everything: The Games We Loved.” I argued that the professional sports fan had been reduced to a data point — that the loyalty, the history, the civic passion we bring to our teams is what gets underwritten when private equity values a franchise, and that the escalating cost of attending, watching, and merchandise-buying is not a side effect of this system but the point of it.
You can’t put that on a t-shirt. Still, it’s what’s going on.
Then Bloomberg published a story that made that piece feel like an introduction.
Just months before LeBron James signed his $154 million contract with the Los Angeles Lakers in 2018, a limited liability company he controls borrowed almost $300 million from a pair of Midwestern life insurers advised by an arm of Guggenheim Partners.
The entity is called King James Funding LLC.
The insurers purchased $300 million in asset-backed bonds issued by the company, effectively giving LeBron immediate money against future income. The collateral was not his NBA salary — it was his off-court earnings: the lifetime Nike sponsorship, the SpringHill media company, the corporate deals that constitute the business empire built alongside the basketball career.
Then in 2022, an additional $60 million tranche was issued at a 5.75% interest rate, with full NBA approval. The bonds mature in 2049.
Stop and re-read that. The bonds mature in 2049. LeBron James will be 64 years old. His Nike revenue stream — pledged as collateral for debt he took on in 2018 — will still be servicing these bonds more than two decades from now.
This is not a basketball contract. This is a structured finance instrument. The architecture surrounding it, that’s the story.
Guggenheim, the investment giant led by Mark Walter, advised the insurers on which assets to buy. Walter later built a sprawling sports portfolio that includes the Dodgers. Guggenheim separately invested in James’s SpringHill media company. Walter recently bought controlling interest in the Lakers at a $10 billion valuation, then agreed this summer to sell that stake to former Disney CEO Bob Iger and businessman Josh Kushner for a record $12.5 billion.
Let’s draw a map.
Guggenheim Partners — led by Mark Walter — arranges a $300 million bond deal for LeBron James using Midwestern life insurance policyholder capital as the funding source. This happens in 2018, months before LeBron signs with the Lakers. Guggenheim then invests in LeBron’s SpringHill media company — the same company whose revenues partially back the bonds Guggenheim arranged. Walter then acquires controlling interest in the Lakers — the team LeBron joined after Guggenheim arranged his financing. Walter then sells the Lakers for a $2 billion profit while under federal investigation for his other insurance entities.
Two Walter-controlled insurers, Delaware Life and Clear Spring, are the subject of a Justice Department and Securities and Exchange Commission review over roughly $20 billion in loans that regulators say should have been disclosed as related-party transactions.
The specific insurers who funded LeBron — Midland National Life and North American Company for Life and Health — are not the ones under federal investigation. Bloomberg is explicit: nothing ties the James bonds to the federal probe.
But here is what Bloomberg also noted which deserves to sit in plain language for every fan who has ever bought a jersey or paid for League Pass:
“Wall Street power players have used insurance balance sheets to pursue their quest for higher returns, steering the savings of everyday Americans into more opaque and complex investments. The approach lets asset managers originate and structure deals, and then find uncomplaining buyers by parking such investments on the balance sheets of insurers they influence.”
The insurers that financed LeBron are the ones holding the retirement savings and life insurance policies of working Americans in the Midwest. Their premiums — paid monthly by people who will never attend a Lakers game, will never own a piece of a sports franchise, and have no idea their savings are backing the Nike revenue stream of the greatest basketball player of his generation — are what funded King James Funding LLC.
This is one architecture of the securitization of everything.
The fan buys the jersey. The team sells the TV rights. The franchise sells to private equity. Private equity uses insurance capital — your life insurance policy, your annuity, your retirement savings — to fund the athlete’s personal bond structure. The athlete’s future revenue backs the bond. The asset manager arranges the deal, takes the fee, and invests in the athlete’s media company. The franchise owner sells at a $2 billion profit and exits under federal investigation. The bonds mature in 2049.
The policyholder in Akron, Ohio — LeBron’s hometown — pays her monthly premium and does not know any of this is happening.
She is the yield.
LeBron James’s spokesperson says this is a common financial structure for individuals at his level of earnings and assets. This is true. David Bowie did it with his music royalties in 1997. The structure is legal, credit-rated, NBA-approved.
None of that makes it less extraordinary as a picture of where American sports has arrived.
The $154 million NBA contract was not the biggest deal LeBron signed in 2018. The biggest deal was the one that securitized his future against Midwestern insurance policyholder capital arranged by the firm that would later own the team he played for.
King James Funding LLC. Right there the whole time.