Tuesday, March 27, 2012

Magic Comes to the Dodgers--and It Only Cost $2 Billion

     By Ross Newhan

     The auction sale of the Dodgers, scheduled for the offices of Frank McCourt's New York law firm Wednesday, ended almost before it began Tuesday night.

     The Dodgers announced that a group led by Magic Johnson and former baseball executive Stan Kasten has been selected as the team's next owner. A person familiar with the process but not authorized to talk about it implied that the Johnson group blew out the competition with a bid of $2 billion.

    It is not clear what the two other competing groups bid or even if they had a chance to make a bid. One of those groups was led by hedge fund billionaire Steven Cohen and biotech billionaire Patrick Soon-Shiong, reputed to be the richest man in Los Angeles, while the other bidder was St. Louis Rams owner Stan Kronke.

   The sale must be confirmed by the federal bankruptccy court in a hearing April 13 and must close by April 30, when McCourt owes Jamie McCourt a divorce settlement of $131 million.

    The $2 billion sale price would easily cover McCourt's debts and set a record for the sale of a North American sports franchise. The previous record was set in 2009 when the Miami Dophins sold for $1.1 billion.

    The Dodgers will now be owned by an entity called Guggenheim Baseball Partners and run by Kasten, the former president of the Atlanta Braves and Washington Nationals and a close friend of Commissioner Bud Selig.

    Mark Walter, CEO of Guggenheim Partners, a Chicago based financial services firm, participated in the auction and meetings with major league owners, according to the person cited above, and his firm is the principal money behind the deal. However, he is not expected to play a role in the Dodgers' daily operations.

    The sale marks the end of one of the tumultuous chapters in Dodger history in which one of the sport's flagship franchises was driven into mediocrity and bankruptcy by McCourt and it will undoubtedly be greeted by widespread approval from the club's disspirited fan base, cheering the departure of McCourt and take over by Johnson, the Lakers legend whose championship background and community involvement have made him one of the most popular figures in Los Angeles history.

   Whether Johnson's popularity was a factor in the decision by McCourt, striving to resurrect his Los Angeles image, or it was based strictly on the whopping sales price isn't known, but it is known that he has spent considerable time talking to city leaders in regard to Johnson and came away aware that the heart of the city was rooting for Magic.

    However, now that Magic has the Dodgers, the process of restoring the club's magic shouldn't be thought of as an overnight proposition.    


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