Buss made a fortune on Southern California real estate in the 1960s and 1970s. He then led a partnership in 1979 that bought the Lakers, the NHL’s Los Angeles Kings, The Forum (the arena which housed both teams) and a 13,000-acre ranch in the California Central Valley from Jack Kent Cooke, who achieved fame through his ownership of the Washington Redskins. The Lakers’ piece was valued at $20 million. Last month the team was valued at $1 billion in Forbes annual look at the business of basketball.
While $20 million might seem like a bargain for a marquee franchise like the Lakers, the NBA was a very different league in 1979. The league was reeling from drug allegations. Playoff games were shown on tape-delay. CBS and USA paid less than $20 million annually for the broadcast rights to the entire league. It was also the year that Magic Johnson and Larry Bird joined the NBA and it began its staggering ascent over the next three decades. The Lakers and Buss were in the middle of it all.
The Lakers and Buss collected NBA stars like Magic, Kareem Abdul-Jabbar, James Worthy, Shaquille O’Neal and Kobe Bryant. These players helped lead the Lakers to 10 titles under Buss’ ownership (the franchise has 16 championships overall). The next best during that time are the six titles won by the Chicago Bulls and Michael Jordan. The Lakers’ chief rival, the Boston Celtics, won four titles since 1979. The Lakers won two-thirds of their regular season games since 1979–the best record in the NBA.
The Lakers became the biggest show in town under Buss. Celebrities flocked to the Forum, and later the Staples Center, to see “Showtime” and the stars on the court. Courtside seats set fans like Jack Nicholson back more than $3,000 a game, while luxury suites cost more than $300,000 on average at Staples.
Buss was never afraid to spend money to attract stars. The Lakers have the NBA’s highest payroll this season, $99 million, for the fourth straight year. Buss could afford it. The Lakers operating profit averaged $37 million a year the past 10 years, which is second best in the NBA behind the Bulls.
The Lakers are in a huge transition period with Buss’ death. Buss was the longest-tenured NBA owner (a post now held by Clippers owner Donald Sterling). Buss was a regular at Lakers games, but he did not attend a game this year as his health deteriorated. Two of his kids, Jeanie and Jim, have been running the franchises with Jim focused on the player side and Jeanie concentrating on business. AEG, which owns a 27% stake in the Lakers, put itself up for sale last year.
Buss’ estate faces a massive tax bill with the soaring value of the Lakers, as he owned two-thirds of the billion-dollar franchise. The Lakers are expected to stay in the family thanks to its massive $3.6 billion television deal with Time Warner Cable, which kicked off this season. The 20-year deal includes a 5-year option that is expected to bring the total value to $5 billion.
If the Buss family needs to raise money to pay estate taxes, they have a benefactor in their backyard. Patrick Soon-Shiong, the richest man in L.A., bought a 5% stake in the Lakers from Magic Johnson in 2010 and could easily afford a bigger stake if the Buss family wants to raise any cash.