Cash-Strapped L.A. Dodgers Shop For A New Owner

Jan 23, 2012

The Los Angeles Dodgers are one of professional sports' most storied franchises. But they're up for auction because much-maligned and outgoing owner Frank McCourt was forced to put the team under bankruptcy protection last summer.

Now, preliminary bids for the Dodgers are due on Monday. The team lost its luster during McCourt's ownership, but estimates for the winning bid range from $1.2 to $2 billion, dwarfing the record $845 million paid for the Chicago Cubs a couple of years ago.

There will be a thorough vetting process of up to 10 bidders by Major League Baseball; those who make it through will take part in an auction. McCourt reportedly will reveal the winning bid by early April, and then use an estimated $1 billion of it to pay off his debts.

The full list of the many bidders has not been made public; there are a lot of secrecy and nondisclosure requirements surrounding the process.

But some names of those involved have been released — billionaire hedge fund manager Steve Cohen; Tom Barrack, real estate titan; and more recognizable names such as former Dodger stars Orel Hershheiser and Steve Garvey, and former Dodgers manager Joe Torre.

There's also some cross-league pollination — L.A. Lakers legend Magic Johnson reportedly is in, as is NBA bad-boy owner Mark Cuban, who played coy with NBC's Jay Leno a couple of days ago.

"Would you like to buy the Dodgers if it was possible?" Leno asked Cuban. "It could be fun," Cuban answered. "Could you imagine? L.A. would never be the same."

Neither would the Dodgers, and if you ask most Angelinos who care about the team, that would be a good thing. The McCourt years were marred by the lavish lifestyles of Frank and his now ex-wife, Jamie, funded in part by team money. Their bitter, public divorce, and a less-than-enjoyable and sometimes dangerous ballpark experience at Dodger Stadium ultimately led to vast swaths of empty seats. So with the franchise in decline, why the ownership interest and huge projected sale price?

According to sports business expert Marc Ganis, "it's a reflection of the opportunity value if done properly."

Meaning, there's gold in Chavez Ravine, the Dodgers' home in the hills overlooking downtown Los Angeles. Ganis, president of Sportscorp Limited, a consulting firm that focuses on team acquisitions, says three little letters — RSN — could potentially make the Dodgers, already a storied franchise, an astronomically valuable one as well.

RSN stands for "regional sports network," such as ones included in a new long-term TV deal between Time Warner Cable and the L.A. Lakers that Ganis says potentially could be worth $3 billion.

"That was such an outsized deal, so extreme, that it makes many people feel that there's something unique about the Los Angeles market that should allow for a monstrous rights fee or regional sports network equity deal," Ganis says

Monstrous rights fees and RSN equity deals are of little concern to the "99-percenters" who won't be bidding on the Dodgers. But many of them are hopeful that new ownership will make it easier to cheer on the team.

"Well, hopefully they can lower the price on beer, that's for damn sure!" said Dodgers fan Arturo Hernandez, laughing, at Sunday night's Lakers game.

Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

Transcript

ROBERT SIEGEL, HOST:

The first bids are due today for one of the most storied franchises in pro sports. The Los Angeles Dodgers are up for auction after Major League Baseball forced the deeply unpopular owner, Frank McCourt, to give up control of the team.

The Dodgers lost their luster and then some under McCourt's ownership, but NPR's Tom Goldman reports that the new sale price could still set a record.

TOM GOLDMAN, BYLINE: So you want to own the Dodgers? First, get a billion dollars or more. Estimates for the winning bid range from $1.2 to $2 billion. Obviously, only one percenters need apply and they have, in droves.

We don't know the whole list. There's a lot of secrecy and non-disclosure requirements surrounding the process, but we know some of those involved. Billionaire hedge fund manager Steve Cohen, Tom Barrack, real estate titan. And then the names we recognize. Former Dodger stars Orel Hersheiser and Steve Garvey. Former Dodgers manager Joe Torre, and then some cross-league pollination. L.A. Lakers legend Magic Johnson reportedly is in, as is NBA bad boy owner Mark Cuban. He played coy with NBC's Jay Leno a couple of days ago.

JAY LENO: Would you like to buy the Dodgers, if it was possible?

MARK CUBAN: It could be fun. It could be fun. Can you imagine? L.A. would never be the same.

GOLDMAN: Neither would the Dodgers, and if you ask most Angelenos who care about the team, that would be a good thing. The McCourt years were marred by the lavish lifestyles of Frank and now ex-wife Jamie, funded in part by team money, their bitter public divorce and a less than enjoyable and sometimes dangerous ballpark experience at Dodger Stadium that ultimately led to vast swaths of empty seats.

So with the franchise in decline, why the ownership interest and huge projected sale price?

MARC GANIS: It's a reflection of the opportunity value if done properly.

GOLDMAN: Meaning, according to sports business expert Marc Ganis, there's gold in Chavez Ravine, the Dodgers' home in the hills overlooking downtown L.A.

Ganis, president of Sportscorp Limited, a consulting firm that focuses on team acquisitions, says three little letters, RSN, potentially make the Dodgers, already a fabled franchise, an astronomically valuable one as well. RSN, Regional Sports Network, like the ones included in a new long term TV deal between Time Warner Cable and the L.A. Lakers that Ganis says potentially could be worth $3 billion.

GANIS: That was so extreme that it makes many people feel that there's something unique about the Los Angeles market that should allow for a monstrous rights fee or Regional Sports Network equity deal.

GOLDMAN: Monstrous rights fees and RSN equity deals are of little concern to the 99 percenters who won't be bidding on the Dodgers, but many of them are hopeful that new ownership will make it easier to cheer on the team.

At last night's Lakers game, Dodgers fan Arturo Hernandez got specific.

ARTURO HERNANDEZ: Hopefully they can lower the prices on the beer. That's for damn sure.

(SOUNDBITE OF LAUGHTER)

GOLDMAN: But before there's cheap beer, there's a thorough vetting process of up to 10 bidders by Major League Baseball. Those who make it through that will take part in an auction. Frank McCourt reportedly will reveal the winning bid by early April and then use an estimated $1 billion of it to pay off his debts.

Tom Goldman, NPR News. Transcript provided by NPR, Copyright National Public Radio.