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The Almost Magical Powers Of Great Businesses
Porter's Journal Issue #71, Volume #2
Porter Stansberry
June 20, 2025
It’s Boring. It’s Safe. And It Works.
This is Porter’s Daily Journal, a free e-letter from Porter & Co. that provides unfiltered insights on markets, the economy, and life to help readers become better investors. It includes weekday editions and two weekend editions… and is free to all subscribers.
The LA Lakers were sold for $10 billion… Was it a good deal for the seller? No… Same investment in McDonald’s would be worth $54 billion… Deere & Co. has been around since 1837… Nothing beats owning a great business… Companies are shedding workers at recession rates… |
Table of Contents
Jerry Buss made a fortune with basketball.
Various news outlets are reporting the sale of one of America’s leading sports franchises, the Los Angeles Lakers, for $10 billion.
In 1979, Jerry Buss, a real estate developer, bought the LA Lakers, the LA Kings (hockey), and their stadium (the LA Forum) for $68 million. It was a legendary acquisition, as the Lakers won the draft lottery. They picked “Magic” Johnson and were able to immediately win a championship. The Lakers were the dominant NBA team throughout the 1980s.
In terms of sports investments, Jerry Buss’ 1979 acquisition of the Lakers is very hard to beat. Buss turned $68 million into a $10 billion fortune and created one of the world’s best sports brands. Plus, don’t forget, Buss previously sold the LA Kings in 1988. The price was undisclosed, but NHL expansion teams were going for $50 million at the time. And Buss sold the Forum in a separate deal in 2000 for $20 million.
So let’s round up and say the total cash out in the Lakers deal was $10.1 billion – on a $68 million investment!
Sounds great, doesn’t it?
No. It was a terrible investment, actually.
It underperformed the S&P 500 by about $3 billion, as a $68 million investment into the S&P 500 in 1979 would now be worth $13 billion. A similar investment into a great business – Coca-Cola (KO), McDonald’s (MCD), Philip Morris International (PM), The Hershey Company (HSY), Deere & Co. (DE) – would have made even more.
How much more?
Well, if Buss had invested $68 million in these companies, instead of buying the LA Lakers, he’d have:
Coca-Cola: $20.9 billion
Deere & Co.: $23.0 billion
McDonald’s: $54.3 billion
Hershey: $46.9 billion
Philip Morris / Altria : $134.7 billion
Plus, of course, owning the Lakers wasn’t a passive investment. Buss had to provide the management and, for many years, cover the team’s operating losses.
Meanwhile, great businesses don’t require any of that effort. Or additional capital.