WTF??? FEDS investigating MARK WALTER

@EconomPic
Buckle up...

It is reported by @PabloTorre today that the huge $8.35B Dodgers TV deal was negotiated directly by Walter (owner of the regional media company, American Media Productions)… to Walter (owner of the Dodgers), reportedly before he acquired the Dodgers and seemingly contingent on him doing so. This let Walter bid ~$700M above the next-highest offer, despite it being reported at the time that he had no secured media deal in hand.

Time Warner Cable was the counterparty that agreed to pay AMP $8.35B over 25 years for the rights to distribute SportsNet LA, a deal that backed the whole structure. It was brokered by David Rone, then President of Time Warner Cable Networks. Industry experts questioned the logic of that inflated price for years, it drove the local blackouts, and it became a real risk on Time Warner's books ahead of its eventual sale to Charter Communications. Rone was later hired by... Walter into Guggenheim as a managing partner, a role he still holds today.

The deal required such high fees to be charged to local cable that roughly 70% of Dodgers fans were blacked out for years because providers wouldn't pay it. Then in 2015, Walter sold Magic Johnson a controlling stake in an insurance company (EquiTrust), reportedly as repayment for Johnson's help winning the 2012 Dodgers bid... an insurance company that then helped fund the payments to the Dodgers through a loan under the deal Walter negotiated with himself.