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Tuesday, January 31, 2012

South Korean Financing Should be No Deterrent to O'Malley Bid



       By Ross Newhan

       So, a lot of the conversation in the chat rooms and on the bulletin boards Tuesday regarded the prospect that a South Korean conglomerate, E-Land, may provide significant financial support for Peter O'Malley's bid to re-purchase the Dodgers and was mostly on the negative side.

       I would ponder the issue of jingoism except that we pretty much know the chat rooms and bullletin boards aren't necessarily a true reflection of anything, and if I'm going to be nauseated about anything it's the two-caste divide that has developed in America and the appaling partisanship between the two political parties and the more appaling disrespect shown to the highest office in the country in recent days with the chairman of the Republican National Committee comparing the President to the captain of the Costa Concordia, a felon if not more, and Jan Brewer, the Arizona Governess, wagging her finger at the President on the tarmac in Phoenix.

       Regarding O'Malley and the potential investment by E-Land, it's another step in baseball's on and off the field globalization. The Seattle Mariners have significant Japanese financing, O'Malley has been a forward thinking contributer to the development of baseball in Asia, no one has the ability to put the organization back together faster than the former owner, and his financing may also include the Los Angeles based Tony Ressler, a minority owner of the Milwaukee Brewers and co-founder of Ares Capital, fair valued at $4.8 billion in September. It is a shame that two of L.A.'s most noted movers and shakers, Eli Broad and David Geffen, have expressed public support for hedge fund magnate and fellow art collector Steve Cohen. a slap at O'Malley.

      There is quality competition in the Dodger derby, with at least eight groups involved in the second round of bidding, but I can't think of anyone more qualified than O'Malley, and if he survives to the final round when Frank McCourt will make the final decision, I don't think South Korean financing will be as much of the issue as O'Malley's previous public criticism of McCourt.

      The outgoing Dodger owner isn't the type to hold a grudge is he?

      That's rhetorical and there is no need to provide an answer.

      What I will provide is this bit of personal history: O'Malley and the Dodgers made Chan Ho Park the first South Korean pitcher/player in major league history.

      Park remains a close friend of O'Malley's, would likely step into a major role with a new O'Malley ownership and has always been one of the finest people I have met in 50 years of baseball coverage.

      Korean, Dominican, Venezuelan, Cuban, Japanese, European...that's the game now, and O'Malley has been an influential figure in that global growth. Hopefully, he will get a fair shake in the ownership bidding. There is no one more experienced or better prepared to restore the franchise.          

Saturday, January 28, 2012

An Anniversary Tribute to My Wife




     By Ross Newhan

     Connie and I celebrated our 44th anniversary Friday, although I'm not sure celebrate is the right word.

     I spent a large part of the evening working the phones in pursuit of developments in the Dodger bidding while Connie watched television.

    What's new?

    Those 44years have pretty much inured her to life with a baseball writer who has yet to learn the meaning of retirement.

    We met at an Anaheim restaurant (and bar, of course) after I had covered an Angel game, and she met my parents for the first time at Anaheim Stadium, left to introduce herself, while I was down in the dugout or up in the press box.

    While I was traveling with the Angels or Dodgers or cussing at the computer with the door shut to our home office, she raised Sara and David, got them to their various activities, made dinner (at least once in awhile), paid the bills, prepared the taxes and let me know when there was a special occasion that this time I just had to attend.

    Were there times when she lost it, deservedly so. Of course, but I just wanted to take a minute and spread the word, now that we're working on our next 44, that I love her, appreciate her and recognize that she has been the foundation of these four-plus decades.

    I mean, she has made a remarkable adjustment after dreaming, as a young girl, of marrying Sandy Koufax.

   No one could have a better friend, even though she rammed into my new convertible wheeling out of the garage the other day.

    What marriage hasn't experienced a little scrape of one kind or another?

    Connie has made Newhan on Baseball--all of it--possible, and tonight (Saturday) we are attending a party where our anniversary and friends' birthdays will be properly celebrated. I'll leave the Dodger story to my former colleague, Bill Shaikin, at The Times. Bill has been on top of it from the start. No one could have done a better job.

   However, I am quite sure that before we get in the car Connie will remind me to take my cell--just so I can check on developments once or twice.         

            

Friday, January 27, 2012

Gilbert, Cuban Eliminated in Dodger Bidding






       By Ross Newhan

       Dennis Gilbert, the former player agent, Los Angeles philanthropist and long-time Dodger season ticket holder who is also an advisor to Chicago White Sox owner Jerry Reinsdorf, has not qualified for the second round of bidding in the sale of the club being conducted by Blackstone Advisory Partners, multiple sources not authorized to speak publicly on the subject told this writer Friday night.

      The popular Gilbert, who was runnerup in the recent bankruptcy sale of the Texas Rangers, was not one of at least eight investment groups notied by Blackstone on Friday that they have qualified to move on to the next round. Also eliminated, according to the sources, was Mark Cuban, owner of the Dallas Mavericks.

      Gilbert had the financial support of Jason Reese and Randy Worth of Imperial Capital, but Gilbert refused comment when reached by this writer while out to dinner with his wife, Cindi, and the sources refused to speculate or elaborate on the size of his initial bid.

       Three investment groups are known to be among those notified that they will be advancing to the second round. They are groups headed by Magic Johnson, Joe Torre and hedge fund magnate Steve Cohen. The latter is aligned with former deputy commissioner Steve Greenberg and Los Angeles based player agent Arn Tellem; Torre is partnered with Los Angeles real estate investor Rick Caruso, and Johnson is linked with former baseball executive Stan Kasten and Mark Walter of Guggenheim Partners.

Tuesday, January 24, 2012

Another Stimulus Package Rescues Detroit




     By Ross Newhan

     Who would have believed that Albert Pujols and Prince Fielder would have both jumped to the American League, ending up with the Angels and Detroit Tigers?

     Owner Arte Moreno has acknowledged that a billion dollar plus television contract beginning in  2016 permitted him to sign Pujols at $264 million over 10 years, while Detroit owner Mike Ilitch suddenly recognized that necessity can also be the mother of intervention. I mean,.if Fielder was at all close to a deal with the Washington Nationals, Ilitch and his Tiger president, Dave Dombrowski, blew them out with a nine year, $214 million offer after Dombrowski kept saying that his club already had a pair of $20 million a year players in pitcher Justin Verlander and first baseman Miguel Cabrera and couldn't afford a third in Fielder.

    I don't believe the classy Dombrowski was laying down a smokescreen. I just think a lot of his rhetoric came before Victor Martinez, who hit .330 with 103 runs batted in last year, tore his ACL and was lost for 2012, unless he can come back in September or October, and with Fielder and Cabrera in the middle of the lineup--along with a deep array of other contributors--the Tigers now have a revived chance to be playing in October.

   Fielder, Cabrera and Martinez in the middle of the lineup is a menacing thought.

   Of course, Cabrera, who had 48 doubles, 30 homers and 105 RBI, will have to get himself back into third base shape since Fielder, with his 37 homer, 106 RBI per season average, is going to play nowhere but first.

   There is no way to know what the 27 year old Fielder's body will look like in six or so more years, but the advantage that Pujols, at 32, and Fielder have in being American Leaguers is that they can slip into the designated hitter role if need be.

   Fielder's father, Cecil, was once a home run behemoth in Detroit. Comerica Park may not be quite the long ball haven that Tiger Stadium was--or that Prince's former home in Milwaukee was--but as a left-handed hitter his power will still be good enough in Comerica. With Fielder's signing, Detroit has suddenly become a clear favorite in the American League Central, a Motown revival to rival Ford and General Motors, and plenty of people there are thanking Obama and Ilitch for their stimulus packages.

   And thanks, too, Tiger fans are probably willing to add, for agent Scott Boras, who in classic form patiently played out the calendar with Fielder, caught a break with the Martinez injury, and secured the length and dollars that neither the Nationals or Texas Rangers were willing to offer, and the Angels, as well, are breathing easier since they won't have to face Fielder in that Texas lineup 18 or 19 times a year.

  

               

Monday, January 23, 2012

Plausible Equity: Only a Few Dodger Bidders Will Have It




    By Ross Newhan

    So, maybe a dozen or more investors responded to Monday's opportunity to file initial bids to Blackstone Advisory Partners as the first step in buying the Dodgers.

    The best advice I can offer in regard to the inevitable winner is this: Think plausible.

    How many of these groups have the vast equity needed to eventually make a winning bid of $1.5 billion?

    "From a plausible standpoint, I think there are maybe three or four at the most with the type equity that is going to be needed," said a member of one of the investment groups, all having signed confidentiality agreements required by Blackstone. "In this case, any group is going to need 2X times the amount of equity that was necessary to buy the (Chicago) Cubs. So plausibly, the number of likely groups is very, very low."

     The Cubs sold for a record $885 million to Tom Ricketts and familly. Ricketts is chief executive officer of Incapital LLC, a Chicago investment bank that packages corporate bonds for retail investments. He is also a director of TD Ameritrade Holding Corporation and the son of Armeritrade founder J. Joseph Ricketts. Forbes estimates the Ricketts family wealth at $1 billion.

     If that is accurate it would seem to fall short of the type equity needed to buy the Dodgers.

    "Think of it in terms of the Republican primary," continued the member of one of the investment groups. "There were eight candidates standing on the stage at one point, and now the plausible number seems to be two. We'll know more next week when the second round of bids are due. I think the process will move very quickly, and I think there is a realistic possibility that two or three of the initial groups will have to merge to consolidate equity if they want to retain a realistic chance."

      There has already been talk, for instance, of Stanley Gold, president and CEO of Shamrock Holdings, Roy E. Disney's private investment firm, joining forces with former Dodger owner Peter O'Malley.

       Part of this process rests with Blackstone, part with Major League Baseball and the final say with Dodger owner Frank McCourt, who is committed to accepting the "highest and best bid."

      Predicting the winner is an implausible task, but a study of viable equity among the investors should narrow the plausible field in a hurry.

      X    X   X

     I see where T.J. Simers, my former colleague at the L.A. Times, has picked up on my blog of a week or two ago, recommending that McCourt finds someway to sign Prince Fielder, enhancing the value of the Dodgers and making them an instant contender in the National League West.

    Whether the bankruptcy court would approve an expenditure of that cost is uncertain, but with the 27 year old Prince still out there and available, it remains an idea worth pursuing. 
              

Friday, January 13, 2012

MCourt Should Rub in One More Irritant: Prince Fielder




     By Ross Newhan

     It seems like every day now a billionaire steps off the pages of Forbes and onto the bid list for the Dodgers. Some two dozen groups or more will be submitting initial offers Jan. 23, and it is obvious that Frank McCourt could come out of bankruptcy with a price that doubles the current record of $885 million for the Chicago Cubs. No wonder major league owners extended Commissioner Bud Selig's contract for two years, through 2014 when he will be 80

     Most of them would love the same deal Selig arranged for McCourt, and sources confirm there was plenty of back-biting about it at the owners meeting in Arizona. First of all, Selig bows to Rupert Murdoch's pressure to sell the Dodgers in order that his Fox Group can get out from under claimed losses of $60 million a year, so McCourt is allowed to buy the Dodgers without one dime of his own money, the purchase underwritten by Fox. Now, in order to get McCourt out, Selig and owners will winnow the bid list to 10 groups, and McCourt himself will be permitted to select the auction winner by April 30.

    Make no mistake, he has plenty of debts to pay off, including the $131 million divorce settlement with Jamie, but he's going to come out of this with enough money to support his accustomed lifestyle, and if that total scenario isn't annoying enough to the 29 other owners, there's one step McCourt could take to really rub it in--to Selig and his owners.

    McCourt should find some way to beat the Washington Nationals, Miami Marlins and Seattle Mariners to Prince Fielder.

    Most owners have shied away from agent Scott Boras desire to get Fielder a contract similar to Albert Pujols' princely, 10 year deal with the Angels. After all, Fielder is five years younger than Pujols. The fear has been that in eight to 10 years he will be more sumo than slugger.

    However, McCourt might be able to sell Fielder on the big market opportunities of Los Angeles in a six year, back loaded contract.

   A few investors, of course, might be disinterested in taking on the Fielder obligation.

  On the other hand, in tandem with Matt Kemp, he would turn the Dodgers into an instamt contender in the National League West, which they are not now, enhancing the club's potential value.

  My suspicion is that in some account somewhere, McCourt has the money to pull it off, and given the likely sale price of $1.5 billion or more, wouldn't that be another irritant to the commissioner who is forcing him out and those owners who are wondering how they can arrange a similar deal.   

McCourt Should Rub In One More Irritant: Prince Fielder



          By Ross Newhan

It seems like every day now a billionaire steps off the pages of Forbes and onto the bid list for the Dodgers. Some two dozen groups or more will be submitting initial offers Jan. 23, and it is obvious that Frank McCourt could come out of bankruptcy with a price that doubles the current record of $885 million for the Chicago Cubs. No wonder major league owners extended Commissioner Bud Selig's contract for two years, through 2014 when he will be 80

Most of them would love the same deal Selig arranged for McCourt, and sources confirm there was plenty of back-biting about it at the owners meeting in Arizona. First of all, Selig bows to Rupert Murdoch's pressure to sell the Dodgers in order that his Fox Group can get out from under claimed losses of $60 million a year, so McCourt is allowed to buy the Dodgers without one dime of his own money, the purchase underwritten by Fox. Now, in order to get McCourt out, Selig and owners will winnow the bid list to 10 groups, and McCourt himself will be permitted to select the auction winner by April 30.

Make no mistake, he has plenty of debts to pay off, including the $131 million divorce settlement with Jamie, but he's going to come out of this with enough money to support his accustomed lifestyle, and if that total scenario isn't annoying enough to the 29 other owners, there's one step McCourt could take to really rub it in--to Selig and his owners.

McCourt should find some way to beat the Washington Nationals, Miami Marlins and Seattle Mariners to Prince Fielder.

Most owners have shied away from agent Scott Boras desire to get Fielder a contract similar to Albert Pujols' princely, 10 year deal with the Angels. After all, Fielder is five years younger than Pujols. The fear has been that in eight to 10 years he will be more sumo than slugger.

However, McCourt might be able to sell Fielder on the big market opportunities of Los Angeles in a six year, back loaded contract.

A few investors, of course, might be disinterested in taking on the Fielder obligation.

On the other hand, in tandem with Matt Kemp and Clayton Kershaw, he would turn the Dodgers into an instamt contender in the National League West, which they are not now, enhancing the club's potential value.

My suspicion is that in some account somewhere, McCourt has the money to pull it off, and given the likely sale price of $1.5 billion or more, wouldn't that be another irritant to the commissioner who is forcing him out and those owners who are wondering how they can arrange a similar deal.

Thursday, January 5, 2012

Where Are The Beijing Billionaires?


       By Ross Newhan

       It is more exciting than a Kentucky Derby and harder to handicap than a Pick Six.

      The Dodger ownership race keeps drawing more entries, and the only certainty is this: Every investor better be prepared to bid a minimum of $1 billion or forget it.

      Joe Torre and Los Angeles developer Rick Caruso is the latest tandem to acknowledge they are in.

      As I noted in my last blog, there is no reason to select an out of town investor as the next owner when the Los Angeles field continues to expand with quality entries.

      Of course, with Frank McCourt having the final word per his agreement with Commissioner Bud Selig to sell the team, the bottom line may be all that counts--even if the Chinese suddenly become interested or Time-Warner Cable decides that the best way to insure getting the TV rights is by owning the team.

     Torre/Caruso is simply the latest community--and among the most attractive--based entry. Among the others: Dennis Gilbert, Peter O'Malley, Magic Johnson (although his primary financial backing is headquartered out of state), Ron Burkle, Fred Claire and, possibly, a group headed by Orel Hershiser and Steve Garvey.

     By the time of the initial bid deadline of Jan. 23, Blackstone Advisory Partners, handling the sale for McCourt, may send the "bid book" documenting the Dodger financial structure to more than 30 people deemed to be serious investors.

    Selig (and Major League Baseball) has agreed to approve up to 10 bidders by April 1, allowing McCourt to conduct an April auction consummating in the sale of the team by April 30. The record sale price for a major league franchise was the $845 million that the Chicago Cubs went for in 2009.

    If you are among many disbelieving that Selig would allow McCourt to have the final say even through it was McCourt who created the mess surrounding this flagship franchise, it shouldn't be forgotten, as I have blogged before, that the commissioner shares a measue of responsibility since he allowed McCourt to buy the team with virtually none of his own money involved. Selig has said that McCourt was the only viable bidder at a time when Rupert Murdoch's News Corp. was willing to underwrite McCourt's purchase because of its desire to get out from under the team's ownership amid claimed losses of around $50 million per year.

   McCourt DID nearly double the club's revenue during his tenure, and the prospect of a club owned network or a new TV deal reaching between $3 billion and $4 billion (or more) over the next couple decades as result of bidding between Fox Sports and Time-Warner Cable has well-known billionaires teaming up with well-known baseball/sports personalities in pursuit of a team that needs both roster and stadium refurbishing. As Arte Moreno recently acknowledged in an unusual news conference statement of fact, it would not have been possible for the Angels to sign both Albert Pujols and C.J. Wilson without a new contract from Fox Sports.  

   Now, with more than a week left before initial bids must be posted, we will certainly hear more names and pairings in the Dodger derby.
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