L.A. Dodgers: A look at potential new owners
Last week, Major League Baseball commissioner Bud Selig announced that the league would take over the day-to-day operations of the Los Angeles Dodgers (former Texas Rangers president J. Thomas Schieffer will run the team). Troubled owner Frank McCourt’s main sin in Selig’s eyes appears to have been using assets generated by the team for his own personal use. As detailed in court documents from the divorce case between McCourt and his wife, Jamie, from 2004-2009 the duo personally took $108 million borrowed against the Dodgers.
McCourt says he has a $3 billion, 20-year cable deal with Fox to broadcast the team’s games. He also has indicated that he will sue MLB to try to keep his team. But under the “best interests of baseball” clause, McCourt will have a difficult time winning any suit. McCourt’s best defense strategy – and the one in which Selig and MLB would be most vulnerable – would be an “equality of treatment” argument. In other words, if MLB is doing this to him, shouldn’t they be doing the same to the Wilpons and the New York Mets? Even then, McCourt has an uphill battle.
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My colleague, Nathan Vardi, and I wrote about the debt troubles of the Dodgers and Mets last month.
In any case, all signs point to a Dodgers sale. The process is likely to be drawn out for another year or year and a half. Despite the club’s troubles, the Dodgers remain an attractive team with a spectacular brand, great market and some huge upside when it comes to local broadcasting rights.
“Major League Baseball will want a lot of bidders for the team to get the price up,” says Marc Ganis, president of Chicago consultancy, SportsCorp. “But they need to have the right owner for this team, someone with tremendous wealth apart from the team, someone who won’t have to take money from the team and can focus on building the brand. Baseball won’t get a second chance to get this right.”
Here are a few potential buyers who fit that bill:
1. Eli Broad (net worth: $5.8 billion)
The 77 year-old real estate billionaire has recently turned his attention to philanthropy, and has become active in civic projects, like promoting better public school educators. Perhaps the Dodgers could be the ultimate civic endeavor for the L.A. resident?
2. Ron Burkle (net worth: $3.2 billion)
Burkle, 58, was born in California. He has already demonstrated an interest in pro sports as part owner of the NHL’s Pittsburgh Penguins.
3. Tom Gores (net worth: $2.4 billion)
The Beverly Hills billionaire has made a career of buying underperforming companies with good assets. It’s safe to say the Dodgers fit that profile. Gores, 46, recently bought the NBA’s Detroit Pistons.
4. Mark Cuban (net worth: $2.5 billion)
The 52 year-old’s name comes up whenever a baseball team is for sale. Cuban narrowly missed out on the Texas Rangers last year. He is rumored to be done with bidding wars and only interested if MLB names a price and invites him to match it.
5. Walt Disney Company (market cap: $80 billion)
Sure, the company’s last ownership tenure (Angels) was a disaster, but maybe they could make it work with the Dodgers. (Though “Dodgers in the Outfield” doesn’t have the same ring to it, does it?)
6. News Corp. (market cap: $45.8 billion)
Fox, of course, has already danced with the Dodgers. And like Disney, the company’s track record is not pretty when it came to owning a baseball team. But Fox may succumb to the pressure: Time Warner Cable recently inked a 20-year, $3 billion deal to air the NBA’s Lakers. Fox could feel forced to buy the Dodgers again – or at least financially help out a new owner – to keep Time Warner Cable at bay, and stall any attempts by the Dodgers to start their own cable network.
7. Philip Anschutz (net worth: $7.5 billion)
The 71-year-old already has stakes in the NBA’s Lakers and NHL’s Kings and is active in trying to attract an NFL team to Los Angeles. The NFL seems to have relaxed its ownership rules (Stan Kroenke was allowed to buy majority ownership of the NFL’s St. Louis Rams while simultaneously owning the NBA’s Denver Nuggets and the NHL’s Colorado Avalanche). Perhaps an exception would be made for Anschutz as well.