By Ross Newhan
Major league baseball owners will meet by conference call next week to vote on the five groups still bidding for the Dodgers, with the survivors turned over to club owner Frank McCourt for final bids and the selection of a winner by April 8, when McCourt must be back in U.S. Bankruptcy Court.
Meanwhile, a measure of concern has developed among owners about the financial structure of the group fronted by Magic Johnson and former baseball executive Stan Kasten, according to two people familiar with the situation but not authorized to talk about it.
As portrayed by the two people, neither Johnson nor Kasten have much personal equity involved, and the principal financing is coming from insurance companies under the direction of Guggenheim Partners, whose CEO, Mark Walter, is a partner of Johnson and Kasten. Insurance companies are federally regulated, and one of the two people revealing this situation said: "The owners are not sure they should be in business with an operation that involves federal regulation."
How widespread this thinking is among the owners and the exact breakdown of the group's financing wasn't revealed by either of the two people reporting the situation to this writer. Guggenheim is a private global financial services firm with $125 billion in assets under management, according to the firm's fact sheet. In addition, the Johnson group was the highest bidder at $1.6 billion when the second round of bidding was completed several weeks ago, with the other four of the currently surviving bidders at either $1.4 billion or $1.3 billion.
Since then, while this concern was apparently developing among some owners regarding the Johnson group's financing after vetting by MLB's ownership committee and Executive Council, a competing group's financial situation has been considerably enhanced.
As reported recently, Dr. Patrick Soon-Shiong, reputed to be the richest man in Los Angeles, has joined the group led by hedge fund billionaire Steven Cohen. Shiong's net worth has been estimated at $7.2 billion by Forbes, while Cohen's has been estimated at $8.3 billion.
Soon-Shiong has been lingering in the shadows of the Dodger bidding since the process began while being romanced by several of the groups.
"Soon-Shiong," said one of the two people mentioned above, "was not going to commit until he was confident he was joining the group with the best chance of winning."
Between Cohen and Soon-Shiong alone the two have a net worth of $15.5 billion. The group also includes longtime Los Angeles based player agent Arn Tellem, who would become the club president, and former deputy commissioner Steve Greenberg.