Related Party Transactions and the Public Interest
by Bill Lasarow
But first … As we age our youthful experiences and the news of the day recede into history. Gloria Steinem popularized the term and helped bring a major social movement into the mainstream with her 1969 article “After Black Power, Women’s Liberation.” The term stuck in a way that collapses what younger Gen Z peers experience as fourth-wave feminism into what is current for all of us in an America that has backslid into the rule of a Mafia regime. Yet, thanks in part to people like Steinem, we maintain a powerful progressive women’s movement for which Women’s Liberation has lost little if any currency. If gender equality still remains incomplete, the difference achieved over Steinem’s blessedly long life could hardly be more dramatic. By one measure, the quantity of women serving in the U.S. House and Senate, today that number stands at 155. In 1969 it was eleven. More significantly, women have entered the workforce, obtained college degrees, become business owners and executives at a rate that would have been difficult to imagine in 1969.
Steinem never stopped moving the larger dialogue forward, in her late decades thanks to the polite tradition of the salon. A party is a frivolous event at which the very idea of conversation any deeper than gossip is anathema. A salon, by contrast, is all about the conversation, and it was one of the ways Steinem seeded new generations of more than just feminists. From the investigative journalism into Playboy’s sexist sub-culture that first catapulted her to prominence, to co-founding Ms. Magazine and, much later, the Women’s Media Center, Steinem played a leading role in gaining workplace as well as social respect for women. Once one of a small handful of activists, she leaves behind an immense social movement. As her time with us recedes, as it must, into history, I have no doubt that her name will survive to signify, long into the future, our highest and best aspirations.
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As a lifelong Dodger fan — I attended my first Dodger game at the Coliseum in 1958 — there have been stretches when the Blue fielded championship teams. They are long established as one of the three of four most successful franchises in MLB history. But this stretch, under the ownership of Mark Walter, is unmatched by anything else except the New York Yankees and one 14-year stretch by the Atlanta Braves.
Pablo Torre is a sports journalist who has become prominent on the strength of his investigative reporting on the recent L.A. Clippers salary cap scandal. Torre’s work recently resulted in the NBA suspending owner Steve Ballmer for a year, fining the Clippers a lot of money, and stripping the team of the next five years of first-round draft picks. His latest reporting digs into the purchase of the Dodgers by Mark Walter in 2012.
The previous owners, Frank and Jamie McCourt, never had the deep pockets (nearly the entire $430 million purchase was made with borrowed money) required to maintain the historical status of the franchise, particularly during the lengthy O’Malley tenure. When their personal relationship resulted in a separation and contentious divorce, it led to Frank McCourt filing for Chapter 11 bankruptcy in 2011, and to the sale of the franchise under court supervision.
The sale was subject to a bidding war out of which Walter, Stan Kasten, and Laker great Magic Johnson, working under the umbrella of Guggenheim Baseball Management, emerged as buyers to the tune of $2.15 billion, a then record price for an American sports franchise. The new ownership immediately turned the franchise around. They are about to win the National League’s Western Division 13 out of the last 14 years, winning three World Series championships along the way. The one year they finished second they won 106 games, finishing one game behind the San Francisco Giants.
The Dodgers’ success on the field has long been attributed to both their vast financial resources and their top-to-bottom managerial expertise. Despite their last sub-.500 season having been in 2010, they manage year after year to be ranked among the top minor league systems in MLB. That, along with some luck, is due to their exceptional scouting and talent development personnel. No doubt this all starts at the top with Mr. Walter.
That is part of the reason that Mr. Torre’s reporting, which focuses on the 2012 purchase of the team and their launching of SportsNet LA. There are two major parts to the story. First, Mr. Walter leveraged money from the insurance holding companies controlled by Walter/Guggenheim. He remains the majority shareholder. Federal prosecutors and the SEC are investigating into whether up to about $20 billion of the insurance company assets were used to leverage the Dodgers and other acquisitions. Walters position is that he did make the use of that money known and it was reviewed by state insurance regulators, even if some of the purchases were unorthodox — such as the Dodgers. That is a legal matter as yet unresolved, and perhaps troubling, but on the face of it the use of insurance company assets for investment is not improper if handled in accordance with insurance regulations. Then there is the fact that, in the case of the Dodger purchase at least, the asset may have come at a steep price, but it has turned out to be a very profitable investment.
The media business is a separate matter, and that is where the real problem appears to lie.
Soon after the buyout of McCourt, the team received what was reported as a 25-year, $8.35 billion contract from Time Warner Cable. That averages about $330 million annually. By comparison, the current media deal for the New York Yankees, baseball’s premier franchise in the only media market larger than Los Angeles’, is worth about $140 million annually. Public understanding was that the Dodgers made a lucrative TV deal with Time Warner Cable. The debt of the deal came from what would instead be the primary financier: Walter and his companies, not Time Warner. The logic of the amount, far from being the value placed on the L.A. sports media market by Time Warner, is fundamentally different, not to say unconventional. Walter’s ownership group created American Media Productions to own SportsNet LA. It is now clear that Walter’s insurance companies carried the lion’s share of the debt. The $8.35 billion dollar figure would thus be explained by Walter bargaining, in effect, with himself. Without there being a true counterparty in such a negotiation, its ethical integrity disintegrates. On top of this, the Time Warner guarantee covered the media cost to cable and satellite companies even if they declined to carry SportsNet LA. The Dodgers’ asking price to broadcast was so high that it took six years before games could be seen on local TV. Meanwhile, Charter, which bought Time Warner and inherited the deal, pays an obligation that for them is a money loser.
Sound familiar? When he regained the presidency, Caligula sued the IRS, now under the control of his government, for $10 billion. He then generously announced he would settle for just under $2 billion ($1.776 billion, and we all know where that number came from), announcing that this money would not go to him personally but into a fund to compensate basically whomever he chose to bestow his generosity on. This has been described by many legal professionals and politicians as a slush fund using taxpayer money to pay off allies who might have broken any number of laws, starting with the January 6, 2021 insurrection that took place at Caligula’s urging. Nice way to keep the troops loyal, all at public expense. His now Attorney General (and erstwhile personal lawyer) testified before Congress that this deal, made between the President and himself, was dead. It has become more than mere speculation since that Caligula is interested in finding other ways to arrive at the same corrupt conclusion.
It is one thing when a wealthy business executive exploits their access to money to make a great deal for themselves. Dodger fans concern goes no further than, should Walter be forced to sell the team, its fortunes on the diamond may decline. Walter’s criminal exposure is clear, and in the interest of justice needs to land wherever the facts lead. And it is also of larger concern that under the present federal regime regulation of the very wealthiest Americans, those among them who ally with Caligula, are going to get away with crimes that cost segments of the public in terms of both money and services. This is bad enough, and therefore important that cases such as Walter’s be resolved in the interest of truth and justice.
It is quite another matter when the President of the United States is among the worst offenders, yet receives the protection of a Supreme Court willing to hold him harmless of crimes committed under cover of official acts while in office. This goes far beyond the already substantial sums of money he and his cronies are manipulating dishonestly and corruptly. It means that we are living in a country that now offers a two-tier system of legal justice from which the richest are held harmless — as long as they are obedient to Caligula. Nearly all the rest of us cannot even afford the court costs.
Bill Lasarow, Publisher and Editor, is a longtime practicing artist, independent publisher, and community activist. He founded or co-founded ArtScene Digest to Visual Art in Southern California (1982); the Mural Conservancy of Los Angeles (1987); and Visual Art Source (2009). He is also the founder (2021) of The Democracy Chain. In 2025 he relaunched Square Cylinder with Mark Van Proyen and DeWitt Cheng.
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