The Dodgers last owner, Frank McCourt, was a mainstay of the gossip pages. The new administration has been pretty drama free since taking over five years ago. That is, until now.
Multiple outlets, ranging from the New York Post to the Wall Street Journal, have been reporting on a scandal brewing at Guggenheim Partners, the multi-billion investment firm led by Mark Walter, its CEO. Walter is also the head of Guggenheim Baseball Management, the offshoot of the firm which owns the Dodgers. Walter is the Dodgers’ named owner — the “control person” — as far as Major League Baseball is concerned.
The scandal does not directly relate to the baseball team. Rather, it involves allegations that Walter bought a $13 million Pacific Palisades home for a younger female executive named Alexandra Court:
In the past 24 hours, the company has pushed back on multiple reports that CEO Mark Walter will step down; its chief investment officer has claimed on CNBC that there’s “no tumult” at the company; and Guggenheim has denied reports on a real-estate blog and in the New York Post that Walter bought a California mansion for a younger female executive at the company.
The denial regarding who bought the mansion is a bit too cute, though, as the company only denies that Walter bought it or owns it. In fact, the mansion is owned by a holding company that also bought Walter’s personal residence in Malibu. Billionaires don’t go to closings at title company offices, of course. They buy houses through companies and LLCs and trusts and stuff. As such, the claim that Walter didn’t buy the house may be technically and legally true but entirely misleading all the same. For what it’s worth, The Wall Street Journal has reported that Walter and Court have a “personal relationship.” Walter, who is married, and the company deny this. Court is on an extended leave of absence.
Walter and Guggenheim are denying that Walter is going to step down as CEO. That remains to be seen. The question for our purposes is whether, if he steps down from Guggenheim Partners, he would necessarily have to step down from Guggenheim Baseball Management and thus relinquish control of the Dodgers. I suspect not — they’re distinct legal entities, and his departure from Partners would be unrelated to stuff having to do with the baseball team — but you never know. It’s not like he put up $2 billion of his personal dollars for the team. There are likely a lot of strings attached and contingencies involved to the arrangement.
Something to watch.