The Corporate Takeover of the Los Angeles Lakers

Photo courtesy of Pixabay

 

By Joe Baublitz, Staff Writer

When a family member passes away, families can become strained. Trusts can put family members in a difficult position, especially when it gives ownership to the tenth most valuable franchisees in all professional sports.[1] Jeanie Buss, daughter of the late Jerry Buss, was named the controlling owner of the Los Angeles Lakers after a trust established by her father gave the team to his heirs.[2] Today, Jeanie has thwarted a takeover attempt by her brothers.

Respecting their father’s wishes, the family has proclaimed that it has no plans to sell the team. Additionally, under the trust provisions, the 66 percent of the Lakers that the family owns[3] will be operated as a single entity.[4] Therefore, the family must work together to own and operate the Lakers due to this ownership structure. Upon her father’s death in 2013, Jeanie was the team’s governor and representative in addition to handling the business operations. [5] Today, she is the controlling owner and team president.

Jeanie fired her brother Jim Buss and General Manager, Mitch Kupchak. Jim was the VP of Basketball Operations. She hired Rob Pelinka and Magic Johnson as General Manager and President of Basketball Operations, respectively, on February 21. The firing did not sit well with some family members. According to court filings, Jeanie’s brothers Jim and Johnny Buss requested a board meeting which included newly proposed board of directors.[6] Jeanie’s name was not mentioned in the meeting request, but she is required to be a director to also be the controlling owner. She believes that this meant her brothers were trying to oust their sister. To prevent the perceived takeover attempted, Jeanie went to court.

In the Los Angeles County Superior Court, Jeanie requested a temporary restraining order (TRO). To be granted a TRO, Jeanie “must convince the judge that he or she will suffer immediate irreparable harm unless the order is issued.”[7] The irreparable harm would be that she would lose all control of $2.7 billion organization. The TRO is designed to be a temporary solution until the court can determine whether to grant a preliminary injunction. [8] Jeanie’s TRO did not get this far, however. After the filing, the brothers dumped the board meeting request. Consequently, Jeanie decided to forgo the TRO.[9] Her lawyer believed that this was only the beginning,[10] however, and he was right.

The family continued to fight over the ownership of the team, which came to a head. A probate trial was scheduled to help resolve the issue, but the family agreed to resolution instead. Jim has reigned as co-trustee and replaced by younger sister Janie.[11] The agreement required that “the brothers [must] ‘take all actions reasonably available to them, including voting the Trust’s shares’ to ensure Jeanie Buss is elected each year as controlling owner and a director.”[12]

Jeanie has the full support of younger sister Janie. “Jeanie is captain of the ship.,” Janie said. “My sister is the one who finally played her aces. I’m just behind her. I’ve always been behind her. Now she can focus on where the Lakers need to go.”[13] With the threat of a corporate takeover evaporated, Jeanie must focus her attention on the team, which has not made the playoffs in four years. The Lakers currently sit at 21-55, the second worst record in the league, and were eliminated from playoff contention.[14]

 

Sources


[1] The World’s 50 Most Valuable Sports Team 2016, Forbes (July 2016), https://www.forbes.com/pictures/mli45fgemg/10-los-angeles-lakers/#613127f63550.

[2] Buss family won’t sell Lakers, ESPN (Feb. 2013), http://www.espn.com/los-angeles/nba/story/_/id/8960441/family-jerry-buss-maintain-los-angeles-lakers-ownership.

[3] Jeanie Buss thwarts family coup, wins control of Lakers: report, NY Daily News (Mar. 2017), http://www.nydailynews.com/sports/basketball/jeanie-buss-thwarts-family-coup-wins-control-lakers-report-article-1.3010630.

[4] Buss family won’t sell Lakers, ESPN (Feb. 2013), http://www.espn.com/los-angeles/nba/story/_/id/8960441/family-jerry-buss-maintain-los-angeles-lakers-ownership.

[5] Id.

[6] Jeanie Buss, Fearing Brothers’ Takeover of Lakers, Briefly Takes to Court, The New York Times (Mar. 2017), https://www.nytimes.com/2017/03/04/sports/basketball/jeanie-buss-los-angeles-lakers.html?_r=0.

[7] Temporary restraining order, Cornell University Law School (n.d.), https://www.law.cornell.edu/wex/temporary_restraining_order.

[8] Id.

[9] Jeanie Buss, Fearing Brothers’ Takeover of Lakers, Briefly Takes to Court, The New York Times (Mar. 2017), https://www.nytimes.com/2017/03/04/sports/basketball/jeanie-buss-los-angeles-lakers.html?_r=0.

[10] Id.

[11] Buss family feud over Lakers appears to end with Jeanie as controlling owner, La Times (Mar. 2017), http://www.latimes.com/sports/sportsnow/la-sp-jim-jeanie-buss-trust-20170326-story.html.

[12] Id.

[13] Lakers’ Jeanie Buss replaces brother with sister as trustee, ESPN (Mar. 2017). http://www.espn.com/nba/story/_/id/19016143/jeanie-buss-los-angeles-lakers-replaces-brother-sister-trustee.

[14] NBA Standings – 2016-17, ESPN (n.d.), http://www.espn.com/nba/standings.

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