Bill Madden: How the probe into Mark Walter, Dodgers impacts salary cap push

Bill Madden, New York Daily News on Aug 23, 2026

Published in Baseball

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NEW YORK — Amid the looming, potentially catastrophic baseball labor dispute over the owners’ push for a salary cap, storm clouds are growing around the central figures in all of this — the Dodgers — that could result in one of the biggest scandals in the game’s history.

It is the Dodgers’ runaway spending, including $1.1 billion in deferred payments, along with their record $8.35 billion TV deal, that have made them the poster boys for the owners in their insistence on a cap as the only way to even the playing field between the small and big market teams. But now, when it comes to the Dodgers, or at least their owner Mark Walter anyway, it appears the federal government may be preparing to do the job for them.

The first hint that something may be terribly amiss with Walter’s Guggenheim Partners financial empire — which includes the WNBA’s Los Angeles Sparks, England’s Chelsea FC soccer team, a Formula One racing team, the entire Professional Women’s Hockey League and until a few weeks ago the Lakers — was a report back in July that in September 2025, federal agents boarded Walter’s private jet at Chicago’s Midway Airport and seized his cellphone and his laptop. Since then, amid whistleblower complaints, there have been multiple reports of a full-blown federal investigation as to whether Walter has committed fraud by using loans from his insurance companies to finance all his investments.

The practice of loans to “affiliate entities” from insurance companies is not illegal as long as they are disclosed and don’t exceed certain limits. This is essentially the crux of the federal investigation and, by extension, baseball’s concern.

As one high-level baseball exec told me: “Ever since the Dodgers started buying up all these players (Shohei Ohtani at 10 years, $700 million with $680 million deferred; Yoshinobu Yamamoto at 12 years, $325 million; Blake Snell at five years, $182 million with $66 million deferred; Kyle Tucker at four years, $240 million with $30 million deferred; Teoscar Hernandez at three years, $66 million with $23.5 million deferred; Edwin Diaz at three years, $69 million with $13.5 million deferred) we’ve all been asking: ‘Where is all this money coming from?’

“Maybe this [the federal investigation of Walter] will answer that.”

The tangled web of Walter’s finances all goes back to 2012 when the Guggenheim Partners, of which he is CEO, purchased the Dodgers out of bankruptcy for a then-record $2.15 billion after the previous owner Frank McCourt had run the team into the ground following his costly divorce from his wife, Jamie. Much to the consternation of a lot of the baseball owners, the Guggenheim group outbid Los Angeles Rams owner Stan Kroenke and New York hedge fund titan Steve Cohen for the Dodgers, the reason being nobody knew anything about them, especially Walter.

The bankruptcy court didn’t care. They were only interested in getting the top dollar for the Dodgers so all of the creditors would be re-paid. Another key part of the bankruptcy sale deal was that the Dodgers would be able to keep most of their 25-year, $8.35 billion TV deal, only about one-third of which is subject to revenue sharing.

The feds’ investigation of Walter had stayed mostly underground until earlier this month when, seemingly out of nowhere, it was announced that Guggenheim had sold the Lakers for $12.5 billion to former Disney CEO Bob Iger and Josh Kushner, the brother of Donald Trump’s son-in-law Jared Kushner. Immediately, speculation arose that Walter is frantically trying to raise cash to pay off all those loans from the insurance companies to his affiliate entity companies. It was reported last week that Walter is in talks to also sell his stake in Chelsea FC and even approached Charter Communications to let them out of the lucrative Dodgers’ and Lakers’ local TV deals for a lump sum payment.

Just where this all goes is anyone’s guess, but as one top-level baseball official, speaking under the condition of anonymity, told me last week: “None of us still don’t really know much about Walter, but any time the FBI raids your property and confiscates your phone and your laptop, it’s not a good sign.”

It’s very possible, even if Walter is not charged with a crime, MLB will now put pressure on Guggenheim to sell the Dodgers, especially if the owners are successful in getting a salary cap. Although Ohtani has a clause in his contract that he can opt out of it in the event the Dodgers are sold, he would have no reason to do that.

As for how the Walter investigation could impact the MLB labor talks, especially if it’s discovered Walter was using illegal insurance company loans for Dodger business, one management person believes it doesn’t change the fact the owners still need the cap.

“If anything,” he said, “this enhances [the owners] argument. There’s no hiding any money with a cap.”