It’s Showtime In Chavez Ravine
The Frank McCourt chapter in Dodgers history came to an end Tuesday night. The team announced that it reached an agreement to sell the club to the bidding group led by Magic Johnson, Stan Kasten and the Guggenheim Partners. Give MLB.com’s Ken Gurnick credit for the original scoop. The price is $2.15 billion, according to The Wall Street Journal’s Matt Futterman.
Unsurprisingly, the sale price is the largest ever paid for a North American sports franchise. It is more than double the previous MLB record, which belonged to Tom Ricketts, who paid roughly $845 million for the Cubs in 2009. Previous Dodgers owner Frank McCourt bought the team from NewsCorp for $430 million in 2004. His debt has been estimated at $1.1 billion, so despite running the team into the ground, he’ll still walk away with close to $1 billion in profit.
In short, Dodgers fans should be thrilled. The club is getting decades of baseball experience from Kasten — he’s the former president of the Washington Nationals and Atlanta Braves, presiding over the latter’s glory years from 1986 to 2003 — the financial firepower of Guggenheim Partners and the star power of Magic Johnson. While it’ll be Johnson who gets much of the attention, ESPN’s Molly Knight says Guggenheim Partners CEO Mark Walter will assume controlling interest of the team.
A lot of people around the game should be thrilled, as well. San Diego Padres’ owner John Moores is looking to move his team after his agreement with Jeff Moorad recently fell through. Now the bar has been raised. If the Steinbrenner family ever decides to sell the New York Yankees, the $2.15 billion benchmark will be easily eclipsed. The league itself should be happy because baseball is better off when the Dodgers are relevant. Quite frankly, the team has nowhere to go but up.
Today is a great day in Dodgers history. McCourt turned one of baseball’s most historic clubs into a laughing stock, but he’s now being shown the door with an appropriately high-profile ownership group taking control of a high-profile team. Much like the way the Rangers went from near bankruptcy to big spenders soon after that sale, expect the Dodgers to do the same — just on a larger scale.
Mike writes about the Yankees at River Ave. Blues and baseball in general at CBS Sports.
Amen.
Now please fire Giants Secret Agent GM Colletti.
I feel quilty saying this…but Andrew Friedman has to be a possibility right?
Guilty i meant hahaha
oh yes
Nothing better than feeling quilty. LOL.
Wonder how long it will take for them to lock up Kershaw now.
doesn’t having overpaid by half a billion dollars put a damper on big spending?
if I’m a dodger fan, I’m not happy that McCourt weaseled every penny out of new ownership. that means fewer pennies to go into the team
you don’t know they overpaid, because the other bids aren’t public yet
Mike, from Dodger blog Mike Scioscia’s Tragic Illness says it better than I can:”…a question I’m hearing a lot is, “what kind of money can they have left for payroll after spending all that?” The simple answer is, well, we don’t know. I’ll say this, though: no one’s spending two billion dollars on a baseball team to run it on a shoestring budget that struggles to compete. That’s especially so if you believe that one of the main driving factors in the purchase price is the idea of setting up a lucrative television network; it certainly doesn’t help ratings to have your cornerstone product going 72-90.” http://bit.ly/GZlu6X
agreed. Cole Hamels and Matt Cain are fully aware of that as well.
Any truth to the rumor of the Dodgers having a “Sniper Rifle and Map to Frank McCourt’s House” giveaway promotion?
If this deal was comlpeted before the Angel’s negotiated their TV contract, would they have been able to command as much money from Fox? Or am I underestimating the LA/SoCal market. Or is there no correlation at all?
Not only does McCourt get to walk away from his utter failure of management with many hundreds of millions in his pocket but another aspect of this deal is that he gets to keep a majority share in a joint partnership controlling the land (yes, that means parking) around Chavez Ravine. What do you think it’s gonna cost you to drive to the game now, Dodger fans? Only in America..
I think he should be forced into a fight to the death with the Wilpons. Regardless of who loses, everybody wins.
He won’t be keeping a majority share in that partnership, per Jonah Keri:
Per the sale’s press release: “Mr. McCourt and certain affiliates of the purchasers will also be forming a joint venture, which will acquire the Chavez Ravine property for an additional $150 million.” Meaning McCourt and the new owners will jointly own the parking lots around Dodger Stadium — though McCourt will merely be a minority owner, able to pursue development deals on the lots with the new ownership group holding final veto power.
MCourt is a genius. Didn’t use a dime of his own money, just some parking lots in Boston worth 150 million and turned it into over 1 billion in 7 years (after taxes, paying debts and his wifes divorce settlement).
Dodger fans should get ready for some pretty heft increases in ticket prices and parking fees.
Teams set ticket prices and parking fees to maximize revenue, not in response to payroll increases, paying $2 billion for the team or anything else on the expenditure side. If the team raises fan costs beyond that which maximizes revenue, they’ll lose money overall because of reduced demand.
However, the team will be able to raise ticket prices and parking fees by a hefty amount because the fans will likely be willing to pay an optimism premium because of the new ownership group and the exodus of the McCourts.
What are these ‘taxes’ you speak of? McCourt hasn’t paid them in quite some time.
He’ll pay a lot of taxes now. He amortized his purchase price and took all those interest deductions to avoid taxes to date, but that means nearly all the purchase price is taxable, 20% is going to be recapture and California has no preferred cap gain rate.
How on earth does anything increase in value 5x in 8 years in the middle of one of the worst economic times in recent memory? Not saying there is a conspiracy or anything, but kind of frustrating when housing values continue their 4 year slide . . .
all you need to look at are the recent tv contract these teams are getting……baseball has not been hurt by the economic downturn.
Many misconceptions out there.
@fergie348 Do you know what a joint partnership is? Also Dodgers ownership has final say and can veto anything… Therefore, if they want parking prices to be 8$, it will be 8$. I can assure you prices will go down.
@Pft, ticket prices have been lowered for the 2012 season. Also I assume they will either remain the same or actually decrease for the 2013 season. The new ownership isn’t as money hungry as McCourt is. Stan Kasten has part ownership in the team and has stated, the top 2 things he believes a franchise should have is:
-A great team fielded via scouting and development.
-A stadium that is enjoyable to fans. A stadium that incorporates fun, history, culture, excitement, and elite play.
I highly doubt prices go up. Times are good for Dodgerland…and at the end of the day, Haters gon’ Hate!
its a great day to be a Dodgers fan
“The new ownership isn’t as money hungry as McCourt is.”
That’s cute.
If only the Dodgers had signed Prince! They could be favorites to win the NL West this year, and take the championship!
Someone better revise the organizational rankings.
gotta love being ridiculously rich in America. You can act like an idiot and be financially stupid at every turn and still make a HUGE profit.
He may be a lot of things but McCourt is not stupid, he just turned some parking lots outside of a stadium into 1.5 billion, 5 years of massive income, and some more parking lots outside of a stadium
I have to admit that I am more than a little bit pissed that McCourt is walking away from all this 10x richer than he was before. I know that ‘fair’ is a loaded word, but this does seem quite unjust.
It is unjust vs. unfair. McCourt was handed that money by Selig and the good old boy who approved his ponzi scheme justice would have that billion dollars being invested in to the team, a team that was milked dry by this duplicitous SOB.
As many have said before, I’m not sure all Dodgers fans are “thrilled.” First, McCourt is not gone. Any sale that does not end all ties between McCourt and MLB is simply not good enough. McCourt simply has to be removed. Second, no one is “thrilled” by the fact that he is making money. This isn’t “the rich aren’t allowed to profit!!” This is people hating McCourt, hating the fact that he bleed the Dodgers dry and killed what should have otherwise been a very good run for them over the past half-dozen years, and just in general hating everything he did in terms of running the team. That he gets rewarded for that is not satisfying.