Tuesday, March 27, 2012

This Magic Moment: LA Dodgers Sell for $2B

By Conor Flahive

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Just minutes ago, an insider familiar with the talks between Frank McCourt and his advisors informed me that a deal has been reached for the purchase of the L.A. Dodgers for the colossal sum of over $2 billion. The winning bidder is a group that consists of Former L.A. Lakers star Magic Johnson, Washington Nationals President Stan Kasten; Mark Walter, CEO of Guggenheim Partners; and Peter Guber, owner of the Golden State Warriors and CEO of Mandalay Entertainment group, whom I met last week at the IMG World Congress of Sports.

Much more on this breaking news story will surface in the next few hours, but from the outset I have three striking observations:

The Other Finalists

First of all, I am shocked that Steven Cohen did not come out on top. Cohen was the predicted winner for one simple reason: he was spending his own money rather than someone else’s.

Second, the fact that the purchaser was not Stan Kroenke makes it much more likely that there will be football in L.A. in the near future. Kroenke’s family owns the St. Louis Rams, who are widely considered to be a front-runner for the move to L.A. If you were unaware, the NFL has a cross-ownership prohibition that would have made it difficult for the Rams to move to L.A. (I say difficult and not impossible because the cross-ownership provision in the NFL bylaws could probably be invalidated in court under antitrust laws.)

Color Barriers

The Dodgers broke the color barrier with players in Major League Baseball when Jackie Robinson debuted in 1947. More than 50 years later, with Magic Johnson as part of the group that bought the team,  the Dodgers broke the color barrier with owners. Kudos to one of baseball's most storied franchises! 

McCourt Keeps the Parking Lots

In the past few days, there has been a lot of debate as to whether Frank McCourt would hold on to the parking lots surrounding Dodgers Stadium.  As part of his agreement to sell the team, McCourt held the right to retain the parking lots. But, most pundits agreed that despite McCourt's adamant demands to keep the precious real estate, no one would submit a final bid unless McCourt gave up those rights. However, the Dodgers just released a statement saying that as part of the agreement to buy the team, McCourt and "certain affiliates of the purchasers" would acquire "the land" surrounding Dodgers Stadium. This means that McCourt and the new owners came to a compromise. McCourt will continue to enjoy the lucrative financial benefits from the parking lots, yet the owners will be able to keep an eye on him through the deal that gives co-ownership to their affiliates.

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