Hour 2: Carton and Rovell break down LeBron James' suspicious $300M loan

**Craig Carton** (0:00)
Oh, the beautiful people, just after 3 o'clock.
888-808-109.
Interesting business move by LeBron James, by the way. I don't know if you guys saw the story or not. So LeBron James, before he joined the Lakers and signed a $154 million contract back in 2018, actually formed a limited liability company, an LLC, that he controls. And that company borrowed $300 million from a pair of Midwestern life insurers that were advised by an arm of Guggenheim Partners. Why is that an interesting story today? Well, because the company, Guggenheim, is that Mark Walter's company that's now in trouble of being indicted. And LeBron James owes that company $300 million, I assume, plus some type of interest. Now, the $300 million loan was secured by LeBron James' future off-the-court earnings. For example, he has a lifetime contract from Nike. So, Nike pays to make up a number, you know, $20 million a year. So, in theory, the hedge there is that when LeBron James has to start repaying the $300 million, if he doesn't write the check, well Guggenheim Partners and these two insurance companies can wind up signing on to take the money that Nike would pay him on an annual basis until he's paid back with whatever the interest is. But its first question would be, and I don't claim to understand this because I don't, it's way out of my pay grade. If you're LeBron James and you're worth conservatively a billion dollars and you're making 50, 60, 70 million dollars a year, why would you need or want a 300 million dollar loan that is due to be paid back in 2049, which is going to be ballpark 17, 18 years after your prime earning potential? This is why rich people have different problems than the rest of us. Because the first thing that came to my mind is, why would LeBron James need a 300 million dollar loan? Like you're worth a billion dollars. You're LeBron James, you have multiple properties, you can get a HELOC, right? You can, whatever. Like what did he buy that he needed 300 million dollars for up front? Because no matter how much money he borrows, obviously, he's got the goods to pay back with interest. So this still gets a little interesting because the company that oversaw the loan is the same company now that's owned by Mark Walters, who had to sell the Lakers in a panic and might be looking to sell the Dodgers now, also in a panic because he's got to cover some bad investments he made or bad business decisions he made and cover that up with liquid cash.
But it shows you again the tangled web we weave and no one's going to have the balls to ask LeBron about this. And obviously LeBron's not doing interviews right now. The basketball pre-season hasn't started yet. But can you figure out, like if you had to take a guess, why would a billionaire basketball player need to borrow $300 million and had paid back with interest? Like what's out there that he would want to buy that he couldn't afford to just buy?
I don't get it. And if he wants to sail, he wants a big yacht. Well, it's like a car. Like you make a monthly payment on it, right? You want to buy a house, get a mortgage.

**Chris McMonigle** (3:53)
You just take the loan out on that.

**Craig Carton** (3:55)
Exactly right. So I'm trying to figure out, and to me there's dirty pool in there somewhere. I just can't put my finger on exactly where it is.
But it's weird that LeBron James would need a $300 million loan.

**Chris McMonigle** (4:12)
It might be a stupid question. He is a part of that Fenway Sports Group.

**Craig Carton** (4:16)
He owns a piece of the Red Sox, right?

**Chris McMonigle** (4:18)
That wouldn't be something to take.

**Craig Carton** (4:19)
Well, maybe. I guess he wants to buy more of it. Maybe. That's fair.

**Chris McMonigle** (4:21)
Or if they need the... I don't know. Because I don't know how that works either when you're a part of these gigantic ownership groups.

**Craig Carton** (4:28)
By the way, if he had a chance to buy a $300 million steak for a bigger steak in the Red Sox, or a soccer team, or whatever it might be.

**Chris McMonigle** (4:37)
Because they own multiple teams.

**Craig Carton** (4:39)
Then obviously having the liquid money at that level gives you a chance to buy a bigger piece. Great point. And by the way, maybe that's what it is. But it seems weird to me that a guy who's about to play his last season agreed to a two year $8 million deal. So obviously he's got a side deal somewhere. Automatized his last year in the NBA because there's no way LeBron James plays for $4 million bucks and doesn't have some kind of side deal.