Ending a soap opera starring owner Frank McCourt in a bitter divorce battle, the Los Angeles Dodgers have been sold for a whopping $2 billion to a group led by basketball legend Magic Johnson.
The deal price for Dodgers is by far the highest amount ever paid for a North American sports franchise. The total sales price is said to be $2.3 billion, including $2 billion for the team and stadium, plus $300 million for the surrounding land and parking lots, the Dodgers announced Tuesday night.
The controlling partner of the purchasing group, Guggenheim Baseball Management LLC, will be Mark Walter, chief executive officer of Guggenheim Partners, a Chicago-based financial services company. Apart from Johnson, the group also includes movie executive Peter Guber, baseball executive Stan Kasten, along with Bobby Patton and Todd Boehly.
It is expected that Kasten, former president of the Atlanta Braves and Washington Nationals, would be the club president and Walter is not expected to play a significant role in its day-to-day operation.
Johnson, winner of five NBA championships with the Los Angeles Lakers, stated, "I am thrilled to be part of the historic Dodger franchise and intend to build on the fantastic foundation laid by Frank McCourt as we drive the Dodgers back to the front page of the sports section in our wonderful community of Los Angeles."
McCourt, vilified by the loyal Dodgers fan base for dragging the storied team into bankruptcy in June, will be part of a joint venture with winning groups' affiliates to buy the Chavez Ravine property for an additional $150 million.
The deal ends almost three years of struggles for the club during which it experienced deteriorating performance in the field along with financial burdens.
The Dodgers entered bankruptcy when they could not meet player payroll or pay bills after Major League Baseball Commissioner Bud Selig declined to an agreement between Dodgers and News Corp.'s Fox unit for a 17-year extension of television broadcast rights valued at nearly $3 billion.
In today's statement, Dodgers said, "This transaction underscores the Debtors' objective to maximize the value of their estate and to emerge from Chapter 11 under a successful Plan of Reorganization, under which all creditors are paid in full."
Based on a settlement with Major League Baseball or MLB and overseen by the U.S. Bankruptcy Court in Delaware, McCourt had until April 1 to identify a winning bidder from the three finalists approved by MLB. The sales process was led by investment advisory firm Blackstone LP, which held the auction Tuesday evening.
The other finalists were Stan Kroenke, owner of the St. Louis Rams and a partnership of hedge-fund billionaire Steven Cohen and biotech billionaire Patrick Soon-Shiong.
The sale process is yet not over as the deal must be confirmed by the court in a hearing on April 13 and must be closed by April 30. It is reported that the same day McCourt must pay his former wife, Jamie McCourt, a $131 million divorce settlement.
It was in 2004 that McCourt bought the Dodgers from FOX for a net purchase price of $371 million. For half a century, O'Malley family owned the team.
In the statement, McCourt said the deal with Guggenheim "reflects both the strength and future potential of the Los Angeles Dodgers, and assures that the Dodgers will have new ownership with deep local roots, which bodes well for the Dodgers, its fans and the Los Angeles community."
He added that the "group will continue the important work we have started in the community, fulfilling our commitment to building 50 Dream Fields and helping with the effort to cure cancer."
by RTT Staff Writer
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