A battle among the children of Jerry Buss, who built the Los Angeles Lakers into an iconic franchise, serves as a cautionary tale about what happens when business succession plans fail to account for disagreements among heirs. The recent article in Inc., “The L.A. Lakers Have a Succession Problem. Every Founder Should Pay Attention,” discusses how this company, founded in 1979, is more than an empire—it’s a business intertwined with the Buss family identity. Unfortunately, shared history doesn’t always equal shared visions for the future.
There are six Buss children, and they are divided over the proposed sale of the remaining 17.8 percent stake in the Lakers to an outsider group. Five want to sell the company. The sixth is Jeanie Buss, CEO and controlling owner of the Lakers, who doesn’t want to sell.
Jeanie Buss’ attorney says the transaction cannot proceed unless all co-trustees of the family trust agree. This battle threatens her position as the Lakers’ governor and the last connection between the family and the franchise.
The debate in this article is not about who is right. It is about what the disagreement reveals about a succession plan. Even well-meaning founders who spend decades planning their succession do their heirs and their legacy a disservice if they don’t address what happens if the heirs don’t agree.
Jeanie has devoted decades to operating the team. Her siblings, in the meantime, have decided to sell the remaining family stake and move on. Does the family have the authority to complete the transaction without everyone agreeing?
Founders think about who should run the business after they’re gone. Equal time needs to be devoted to thinking about how disagreements will be settled.
There’s emotional value in remaining connected to a family business. There is also an economic case for taking an inherited stake to cash—whether this is in the billions, as with the Buss family, millions, or thousands of dollars.
A founder may trust one child to be the CEO and distribute ownership shares among other siblings. This works when everyone agrees. However, less so when the siblings have a different vision for the future. A structure needs to be created with the guidance of an estate planning attorney to allow future generations to separate ownership, management and family relationships.
The best estate and succession planning isn’t designed for when everyone gets along. It’s for when the family is splintered into different factions, with different goals. One generation may build a company, establish values and create traditions. However, it cannot guarantee the next generation will share the same ambitions.
Legacy One Law Firm, APLC is an estate planning and probate administration law firm in Los Angeles, California, serving families throughout the State. We help individuals and families establish living trusts, wills, powers of attorney, advance healthcare directives, and other essential estate planning documents designed to protect their loved ones and preserve their legacy. Schedule a quick and easy consultation with estate planning attorney Sedric E. Collins, Esq., or call 323-900-5450.
