SBD/December 5, 2011/Franchises

Magic Johnson Joins Ownership Group Interested In Purchasing Dodgers

Johnson researched six prospective bidders, but made his decision when he met Walter
Basketball HOFer Magic Johnson announced Friday that he has joined forces with Guggenheim Baseball Management "in hopes of buying the Dodgers," according to Bill Plaschke of the L.A. TIMES. Johnson will serve "as the point man for a group that will be backed by the prestigious Guggenheim brand and led by respected veteran baseball executive Stan Kasten." Plaschke noted the complete list of bidders "hasn't emerged, but at this early point it would be difficult to find a group with a stronger combination of deep pockets, a deep Los Angeles connection, and deep affection for the Dodgers." Johnson said Friday, "The Dodgers have been so important to this community for so many years, for so many reasons. I've lived through it all like everyone else and I want to make them great again." Plaschke noted in searching for the "right fit for his Dodgers dreams, Johnson researched six prospective bidders," but when he "met Mark Walter, Guggenheim's CEO, he was convinced." Johnson said, "Listening to Walter talk about winning, it was like listening to Jerry Buss. He told me three times, all I want to do is get to the World Series. I know great owners, and this guy can be a great owner." Johnson's decision "was clinched by the presence of Kasten" (L.A. TIMES, 12/3). Johnson said that the group's "ownership of the Dodgers -- if it happens -- would work this way: Walter would write the big checks; Kasten would oversee the baseball operations; and Johnson ... would work as a president or vice president on both the business side and in recruiting players, when needed." ESPN.com's Buster Olney noted the sale process for the Dodgers "could begin as soon as next week, when financial details of the team will be released to prospective buyers." The Lakers "would love to see Johnson with a large ownership role in the Dodgers." Lakers GM Mitch Kupchak "regularly speaks with Johnson, who has said he'll never leave his influential role behind the scenes with the Lakers and the Buss family." Johnson said that he "intends to reach out to baseball commissioner Bud Selig sometime after the winter meetings" (ESPN.com, 12/2).

MAGIC TOUCH: In DC, Adam Kilgore noted it "became something of an open secret in the sport that Kasten would bid to buy the Dodgers." Kasten this year "sold his ownership stake in the Nationals, formally allowing himself to pursue other opportunities." The cost to buy the Dodgers "could reach as high as $1 billion, but an individual close to Kasten said he is confident the astronomical asking price will not be an issue for the group" (WASHINGTONPOST.com, 12/2). But in L.A., Tom Hoffarth wrote Johnson's decision to join the ownership group "makes as much sense as Sandy Koufax deciding he needs to take over the Lakers." The "fact that Magic says he's sifted through the applications of six potential ownership groups ... shows only that he's been doing some wise political networking." Hoffarth noted as the list "grows by the hour of credible businessmen who are apt to step up and lend their names and wallets toward ownership of the Dodgers, Magic Johnson can't be taking himself seriously." Hoffarth: "Go ahead and be part of some kind of ownership group that's trying to bring the NFL back to L.A. Start something new. Just don't be thinking blue" (L.A. DAILY NEWS, 12/3).

BACK TO REALITY: FSN late Friday filed deposition notices for Selig, MLB Exec VP/Labor Relations & HR Rob Manfred and Dodgers Owner Frank McCourt, continuing its ongoing battle with the club over media rights. The deposition notices arrive in advance of a key hearing beginning Wednesday in Wilmington, Del., which may decide the future of the rights. McCourt, as part of ongoing efforts to sell the club by April, wants an accelerated auction for the rights beginning immediately. FSN is aiming to protect its existing contract, stipulating for an exclusive renegotiation period not beginning until late next year. But the deposition notices, also served to Dodgers CFO Peter Wilhelm and Assistant Treasurer Jeffrey Ingram, are believed to be connected to a separate FSN legal push to have the club dismissed from bankruptcy, which is scheduled to have its own hearing Dec. 27. It is not yet certain whether the MLB or Dodgers execs served will fight the depositions sought by FSN. But given the league's stated neutrality on the Dodgers-FSN fight, and the club's obvious opposition, voluntary cooperation is not likely (Eric Fisher, SportsBusiness Journal). In N.Y., Richard Sandomir noted the FSN-Dodgers television contract indicates that "Fox Sports West 2 -- Prime Ticket’s official name -- paid the team $14.7 million in 2002 and $15.4 million in 2003 to show 80 games each year." The rest of the games "were carried on a local broadcast station." By '04, the deal "required showing 100 telecasts on Fox/Prime." For that, the rights fee in '04 "rose to $25 million." Payments then rose "about 5 percent annually, hitting $30.4 million in 2008." In '13, the "last year of the contract, the Dodgers are to receive $38.8 million." Sandomir noted when a new deal "is done -- and approved by the team’s new owner -- the Dodgers will receive far more money from their local cable TV deal than they have been receiving" (N.Y. TIMES, 12/4).

CRITICAL MISTAKES? The WALL STREET JOURNAL's Ashby Jones notes thanks to the "high-profile nature of the McCourts' divorce proceedings, the dispute involving the law firm, Bingham McCutchen LLP, and Mr. McCourt has gone public." At the "heart of conflict is whether Mr. McCourt suffered any harm as a result of what he alleges was a mistake on Bingham's part, and if so, how much" (WALL STREET JOURNAL, 12/5).
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