Home MLB News MLB Club Sales It’s Over: Frank McCourt Agrees to Sell the Los Angeles Dodgers

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It’s Over: Frank McCourt Agrees to Sell the Los Angeles Dodgers PDF Print E-mail
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MLB Club Sales
Written by Maury Brown   
Wednesday, 02 November 2011 07:32

Frank McCourt has agreed to sell the
Los Angeles Dodgers

UPDATE: Additional details on how McCourt might still control certain Dodger assets after the sale

It seemed unfathomable just a few weeks ago, but in news that will reverberate through Major League Baseball and Los Angeles, Frank McCourt has agreed to sell the Dodgers, Dodgers Stadium, and surrounding parking lots. The news was first reported by the LA Times.

Both sides in the contentious legal battle need approval from a Delaware bankruptcy court where Judge Kevin Gross is preceding over the case.

But according to sources, it is possible that not all Dodger assets could be sold by McCourt. Logistically, the court controls the auction process. The key pieces – the Dodgers, Dodger Stadium, and parking lots – would be in the deal, but other land holdings and a splintered-off company created for premium tickets could be up for negotiation.

For the sale, and MLB, new owners will wish to control all revenue streams associated to the Dodgers. It will be a balancing act between how much money comes out of the auction. Creditors will need to be the first satisfied, with left over proceeds going to McCourt.

The sale would be in the form of an auction. The most recent Forbes valuation (see historical Forbes valuation numbers) which was published in 2011 but accounted for the 2010 season, shows the Dodgers to be worth $800 million.

But, that does not account for what is surely to be a lucrative television rights extension that will be granted to new ownership that will likely be worth several billion dollars. As opposed to the rejected request for an extension prior by McCourt, where Commissioner Selig said he would simply be using an extension with FOX to pay his divorce settlement of $130 million and other legal costs associated to it, Selig will grant an extension for new ownership as the revenues from the deal will go back to improving the Dodgers farm system, the stadium, and major league player payroll.

If estimates are correct, the Dodgers and, the associated assets in the stadium and land, will fetch far in excess of the $800 million valuation number by Forbes. A sale price of anywhere from $1.2=$1.5 billion is within reach through the auction process.

McCourt purchased the Dodgers for $421 million in 2004 from News Corp. It has been reported that even if the sale were in excess of $1 billion, with debt, his divorce settlement and other legal details, McCourt could profit marginally or just break even.

Maury BrownMaury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey, and is a contributor to Forbes SportsMoney blog.. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network (select his name in the dropdown provided).

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