And then there were three? According to a report by Bloomberg BusinessWeek, the sale of the Los Angeles Dodgers is down to three bidders: Steven Cohen, Magic Johnson, and Stan Kroenke. The three were projected to be the finalists with it all eventually coming down to Cohen and Johnson. As reported prior, Cohen is said to have $900 million in cash in the $1.4 billion bid, while Johnson’s bid is the highest at $1.6 billion. Kroenke is said to have the second highest amount of cash equity in his offer.
As reported for Baseball Prospectus, there are strengths and weaknesses in each of the bids:
Strength: Cash. Lots of it. Highest amount of any of the bids. Has added Patrick Soon-Shiong, the richest man in Los Angeles, to his group. With all the cash, Cohen can make upgrades to Dodger Stadium (he has already contacted global facility designer Populous --the former HOK Sport -- to look into improvements).
Weaknesses: Other than Soon-Shiong, there is no “Los Angeles” presence with the group. Former MLB deputy commissioner Steve Greenberg is considered somewhat weak from an operations perspective, as is Tony La Russa. Super-agent Arn Tellem is in the mix, which is good (talent evaluation) and bad (an agent in the front office, something owners may frown at).
Strengths: Has former Nationals president Stan Kasten as a co-member of his group, adding a strong operational presence. Throw in Peter Guber, who is the chairman and chief executive of Mandalay Entertainment, which is invested in the successful Dayton Dragons minor league team; and Mark Walter, the CEO of Guggenheim Partners, the private global financial services firm. The biggest strength may be Johnson’s legendary spot in LA Laker history and his prominence as a business tycoon after in the Los Angeles area. Where Cohen is weak on the LA presence, Magic’s group embraces it. Johnson’s group does, however, have the highest total bid in at $1.6 billion
Weakness: Lack of cash in the initial offer. If reports are correct, Magic’s group is third in this department. With the looming television rights deal, MLB is leery of leveraging the rights deal to make improvements in the player roster and Dodger Stadium.
Strengths: A large offer, that sees the second highest amount of cash behind only Cohen. He also is exceptionally well versed in ownership. He owns Kroenke Sports Enterprises, which includes the Denver Nuggets of the NBA, the Colorado Rapids of Major League Soccer, the Colorado Avalanche of the NHL, the Colorado Mammoth of the National Lacrosse League, and the St. Louis Rams of the NFL (the Colorado sports properties are in the name of Josh Kroenke, one of his children, to satisfy NFL ownership restrictions that forbid a team owner from owning teams in other markets). He is also the majority shareholder of English football club Arsenal.
Weakness: Cross-ownership concerns across leagues, especially in light of the fact that the NFL is looking to get back into LA. The land around Dodger Stadium is enticing from a development standpoint for all those bidding, but Kroenke could certainly see it as an opportunity to bring the Rams back to LA and build an NFL facility on the land around Dodger Stadium. The problem is, Frank McCourt has yet to relinquish the land (130 acres).
The real bidding will come after the league’s owners approves the three. That will reportedly happen on March 27, and shortly thereafter (that night or the next day), the three will jockey for position with McCourt to gain his approval to negotiate exclusively to close the sale between April 1-April 30 when the deal is to close (McCourt is scheduled to pay his former wife Jamie $131 million as part of a divorce settlement on April 30).
The wild cards in all of this are the parking lots and the television rights for the Dodgers. If McCourt holds to his want of leasing the parking lots as opposed to selling, bids could actually come down. On the television rights, current broadcast partner FOX Sports as well as Time Warner cable will look to become minority partners either in the creation of a regional sports network (RSN) such as the league sees with YES, NESN, MASN and others, or reach a separate deal outside of an RSN. Either way, The Biz of Baseball is projecting a deal that would be in the $5-$7 billion range, possibly higher.
Maury 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. He writes for Baseball Prospectus 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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