The sale of the Dodgers to the group headed by Stan Kasten and Magic Johnson was approved today in a U.S. Bankruptcy Court hearing. Ultimately, this should mean that the club will be under their control by April 30th, according to Bill Shaikin of the Los Angeles Times (via Twitter).
A number of issues were addressed during the hearing today, including FOX's concern that the new group had an informal TV agreement with Time Warner Cable starting in 2013, but FOX was assured that no such deal is in place, Shaikin writes. Major League Baseball also argued for the time and opportunity to review the conditions of the sale such as financing and debt, but ultimately the judge approved the sale (via Twitter).
Well if the “New Owners” are willing to pay cash on the “Barrelhead”, I think it’s pretty hard to get an argument going at least from MLB baseball perspective.
Although, I would love to know which bank wrote the cashiers check to make that payment to McCourt. That’s a serious amount to just suddenly disappear from the bank coffers. Or there’s always the possibility that Kasten and MJ had stuffed their money in a mattress, since interest rates are so poor, it might have been safer to keep it there. Lastly, I would love to know how these two are going to get back their return on investment or the speed of which they will get that return?
Is Los Angeles going to give them a break on property tax?
Didn’t Arnie set aside a nice chunk of change to get a football team to LA. Maybe LA will use that money to help out “New Management” of the Dodgers?
Or some other tax break where the Dodgers will be able to keep more money in their pocket, I truly have no idea. These guys paid a billion dollars over book and it’s going to be a long time before they get back their money I will tell you that.
Oh and as far as TV deals go, I wish I knew where Fox or Time Warner will be getting the money for a new TV deal with the Dodgers. This economy is terrible and I gotta believe revenue from TV ads has to be way, way down! Where is the mega TV station going to get the money to give the Dodgers a mega TV deal when commercial revenue is in the toilet. The money has to come from somewhere, the question is where? The Money Tree stopped bearing money when Phil Rizzuto (RIP) stopped doing the commercials.
Many are speculating that the TV rights are worth as much as $4 billion. If that turns out to be the case, this deal was a no brainer.
Yes, but… MLB and the Dodgers’ legal team had a big argument in court yesterday about how the future media rights are structured in the sale. Lawyers for McCourt refused to divulge them. MLB is concerned that they don’t conform to the revenue sharing provisions that apply to the other 29 teams. This could be a ticking time bomb that won’t go off until after the 2013 season. One thing we did learn in this process is that from here on, team owners would be dim to not declare bankruptcy before selling a team. The entire process gets thrown over to a bankruptcy court judge who can waive any and all of the normal controls MLB puts on sales. That’s how McCourt cleared his cool billion when he shouldn’t have walked away with more than the shirt on his back. Sickening, but true.
The power of TV is fading. While the last bastion of the 30-second commercial is live sports, this money is lunatic. These new cable deals just reek of the housing bubble:
“Of COURSE the value will keep rising! Get in now, while you can.”
How is that the Dodgers were worth $430 million in 2004, and now are worth 5 TIMES that much eight years later? During terrible economic times.
Makes no sense.
The Dodgers will get the $4 Billion TV deal, sure. But come 2022 or so, with ad revenue in serious decline, will local TV be able to honor the contract?
We’ll see…
For the answer, see what I wrote above in response to flickadave.
Something is wrong with this…
When a poorly managed commodity increases in value five-fold over Eight years during really poor economic times, something is definitely wrong.
Because people bought it for it’s lineage and what it’s worth in the future. The prestige of the Dodgers didn’t lose any value just because a owner mismanaged it. The Dodgers franchise is a big market team and one with history. People will come now that there’s new ownership and will buy merchandise and attendance will rise. The new group will make their money back in 3-4 years and if the Dodgers have a successful run they will make even more money long term.