Thursday, March 15, 2012

McCourt's Billion-Plus Take Will Be Nauseating

       By Ross Newhan

       Having finally reached the date on which final bids are due Friday in the bankruptcy auction of the Dodgers, the nauseating fact is that Frank McCourt seems certain to receive the predicted $1.5 billion or more while also, perhaps, retaining control of the Dodger Stadium parking lot.

       McCourt, in fact, could double the baseball record of $845 million that Tom Ricketts and family paid for the Chicago Cubs in 2009.

       Of course, McCourt must pay off a debt of about $750 million, owes Jamie McCourt $131 million in their divorce settlement and could be hit with another major legal blow from the suit that Bryan Stow, the San Francisco Giants fan who suffered life changing injuries when beat up in the Stadium parking lot, has filed against him.

     Yet, McCourt should emerge with enough to maintain his West Coast lifestyle. I mean, while most of us have houses that are under water, Frank and Jamie still have those Malibu estates overlooking the water--not to mention a few other scattered properties in zip codes available only by buying a map to the stars' homes.

     At some point, McCourt should send a thank you note to Commissioner Bud Selig who allowed him to buy the Dodgers on leverage because the Fox Group was so anxious to dump the team--and we know that Fox underwrites much of baseball--and now Selig was so anxious to get rid of McCourt that a good portion of baseball's sales agreement with the Dodger owner is favorable to him.

     Although the situation is fluid, changing hourly, this is how it stood Thursday afternoon, according to conversations with several people close to the process but not autorized to discuss it or restricted by the confidentiality agreement with Blackstone Advisory Partners, broking the sale for McCourt.

     Baseball's vetting procedure has reduced the bidding field to four groups or individuals.

     The four include the groups fronted by Magic Johnson and hedge fund billionaire Steven Cohen, a parternership between Memphis Grizzlies owner Michael Heisley and Ares Capital co founder Tony Ressler (who is a minority owner of the Milwaukee Brewers), and St. Louis Rams owner Stan Kronke.

    As of Thursday afternoon, according to figures first reported by Forbes and confirmed by this writer, the Johnson-Stan Kasten group was the highest bidder at $1.6 billion.

   Cohen, who has interest in Tony LaRusaa to head his baseball operation, according to Bill Shaikin in the L.A. Times, had bid $1.4 billion, including $900 billion in cash (undoubtedly attractive to McCourt), while Kronke and the Heisley/Ressler parternship were in the $1.3 billion area.

   There could be considerable movement before the Friday deadline, some of it, perhaps, based on whether McCourt remains firm on controlling the parking lot.

   Clearly, the Dodgers are a flagship franchise that has been marred in the community by McCourt's mismanagment. The bidders, by going to potentially record levels, obviously believe the situation can be turned around in a hurry, particularly given the impetus of a new television deal, re-energized fans and renovations modernizing the stadium.

   Baseball's 30 owners will vote on the remaining bidders by conference call next week, with the survivors turned over to McCourt, who must decide on the winner by April 1 and complete a sales agreement by April 30. He is about to have his decimated bank account--it was never of big league standards to start with--considerably enhanced. Anyone have an antacid?     


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