Thursday, February 16, 2012

Is $1.5 Billion The Ceiling or Merely The Floor In Dodger Sale?

      By Ross Newhan

      I have returned from a Costa Rica vacation--yes, I did the zipline through the cloud forest and even the Tarzan Swing with my eyes open--to learn from knowledgeable sources who are not authorized to speak publicly that that the auction sale of the Dodgers may be closer to $2 billion than the previously anticipated $1.5 billion, possibly doubling the record $885 million that Tom Ricketts and family paid for the Chicago Cubs.

     It is incomprehensible that Frank McCourt--given the commissioner's and the community's distaste for the man and the desire to terminate his ownership--will emerge with a check that should easily erase his $700 or so million in debt, sustain the lifestyle to which he has become accustomed and possibly still leave him as owner of the Dodger Stadium parking lot---a potential goldmine for development.

   It is true this was once a flagship franchise, but how high the flag and how promising are the riches from the inetivable TV contract, an obvious reason that both Fox and Time-Warner are willing to join forces with a prospective bidder as a minority partner, each unwilling to let the other out of sight and/or with a foot in the door.      

   In the final two-plus weeks of February, the 11 groups that made it through the first round of bidding are in the process of submitting second bids, nailing down financing and, in some cases, possibly adding investors or merging with other groups--a process that Blackstone Advisory Partners, handling the sale for McCourt, has encouraged as a means of building a solid financial foundation for each of the respective and surviving bidders.

   McCourt will reduce the 11 to five in March and turn those groups over to baseball's ownership and executive committees for vetting, including investigations into the financial and operational structure of the five survivors--both on paper and in personal meetings--before the survivors of that process go back to McCourt, who must select a winner by April 1 and complete the sale by April 30.  

   The winner?

   It is hard to ignore the check writing ability of Steve Cohen--linked to Steve Greenberg, the former deputy commissioner, and L.A. attorney and player agent Arn Tellem--or the check writing ability of Mark Walter, who is linked to Magic Johnson and Stan Kasten.

   On the other hand, there are others with the resources of Cohen and Walter and there is said to be considerable maneuvering behind the scenes. Rick Caruso and Joe Torre, for instance, may have picked up important financial support recently via union with a member of the Thomson family, the richest in Canada, according to the sources with knowledge of the situation.

   Those sources also revealed that none of the investors are particularly happy with the Dodgers' eight year, $160 million, back loaded signing of Matt Kemp, and the two year, $19 million contract to Clayton Kershaw.

   "Who with the Dodgers is giving out those kinds of contracts at this point?" said one of the sources. "I mean, two years to Kershaw when you are not buying out free agency or arbitration? That's almost as much as (two time Cy Young Award winner) Tim Lincicum got from the Giants."        


1 comment:

  1. It may be galling, but hardly incomprehensible. McCourt played the bankruptcy court like a master, dealing the commissioner almost completely out of the transaction. It's now a free-for-all auction, not about the "best interests of the baseball," but the best interests of Frank McCourt. The real question for MLB's future is why any owner looking to sell a franchise would not declare bankruptcy.