An ownership group led by former NBA player Magic Johnson and longtime baseball executive Stan Kasten has agreed to buy the Dodgers from disgraced owner Frank McCourt for $2 billion. The price would be a new record for a North American sports franchise if the deal goes through, breaking the $1.1 billion Stephen Ross paid for the Miami Dolphins of the NFL in 2009. In addition to Johnson and Kasten, the controlling owners would also include Guggenheim Partners CEO Mark Walter.
The deal came on the heels of an announcement by MLB that three finalists had been approved for an auction, and the deal is still subject to be approved by a bankruptcy court and is not expected to be completed until late April. As a strange part of the deal, McCourt will acquire land in Chavez Ravine surrounding Dodger Stadium for $150 million. The new ownership group also includes Mandalay Entertainment CEO Peter Guber, Guggenheim Partners President Todd Boehly, and oil and gas mogul Bobby Patton.
Johnson, now 52, played 13 seasons for the Los Angeles Lakers and won five NBA championships and three MVP Awards. He retired abruptly in 1991 after being diagnosed with HIV, although he came out of retirement in the 1995-1996 season and has coached in the NBA. Since leaving coaching, he has made a living as a public speaker on HIV awareness.
McCourt bought the team and approximately 250 acres of land in Chavez Ravine surrounding Dodger Stadium from News Corp. CEO Rupert Murdoch for $430 million in 2004. With the sale now all-but approved, it now appears that Katsen will serve as the foremost baseball executive. Other finalists included a group led by Stan Kroenke, who owns the Colorado Rapids of MLS, the Denver Nuggets of the NBA, the St. Louis Rams of the NFL, the Colorado Avalanche of the NHL, and the Arsenal of the Premier League; the last group of finalists included a group led by SAC Capital Advisors founder Steven Cohen, who owns a small share of the Mets, Patrick Soon-Schiong, a biotechnology entrepreneur, and Wasserman Media Group agent Arn Tellem.
MLB has the right to challenge the sale in bankruptcy court in front of Judge Kevin Gross in Delaware. MLB and McCourt made a deal to take the team to auction last November, with a schedule outlined to select the winner by April 1, have the agreement submitted to bankruptcy court by April 6, have the trial begin by April 13, and finalize the sale by April 30. The deal also hinges on the ability of the new ownership group to sell the Dodgers' broadcast rights by 2014.
If the deal goes through it would break the record for a purchase of a Major League Baseball franchise, set in 2009 when the Ricketts family bought the Cubs for $845 million. The Dodgers filed for bankruptcy protection last June when it became apparent that they weren't going to be able to make payroll. They finished in third place in the West last season at a respectable 82-79.
Kasten was hired as a legal counsel by Ted Turner for the Atlanta Braves and Hawks of the NBA in 1976 and became the youngest GM in the history of the NBA when he took the helm for the Hawks in 1979, later becoming president of the Hawks, Braves, and Thrashers of the NHL and later serving in the same capacity for the Washington Nationals from 2006-2010. Following the story of the upcoming sale, Dodgers GM Ned Colleti had dinner with Katsen in Glendale, Arizona. The Dodgers have won the World Series six times, but never since 1988.
Colleti admits that he's happy about the upcoming influx of money into the team.
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