SBD/February 20, 2012/Franchises

Stadium Renovations Among Factors Playing Into Dodgers Sale Price

Dodgers' sale price could approach $2B if McCourt includes land around ballpark
The resolution of whether Dodger Stadium needs major renovations -- and issues “involving television rights, team revenues and control of the surrounding parking lots -- should go a long way toward determining whether the Dodgers sell for closer to $1.5 billion, as bidders anticipate, or closer to $2 billion,” as outgoing Owner Frank McCourt and his advisers anticipate, according to Bill Shaikin of the L.A. TIMES. SportsCorp President Marc Ganis said, "There are a number of very material factors that could swing the price by hundreds of millions of dollars, even approaching half a billion." Stadium renovations “are among those factors.” Blackstone Advisory Partners, the investment bank handling the sale for McCourt, has advised bidders that Dodger Stadium “does not need major renovation.” The Dodgers note that McCourt “has put more than $150 million into stadium maintenance and improvements since buying the team in 2004.” But a source estimated that a new owner “would face at least $200 million in renovation expenses.” Bidders also would “ponder the annual $14-million payment to McCourt for use of the Dodger Stadium parking lots.” Sources said that the sale price “might drop by more than $150 million if McCourt insists upon retaining that land rather than using it as a bargaining chip to extract the highest possible sale price.” McCourt said that he “plans to develop the land and does not intend to sell it.” Blackstone is “expected to suggest that groups relatively short on financing consider mergers.” Blackstone also has “encouraged prospective owners to secure hundreds of millions more to use in bidding by joining forces with Fox Sports or Time Warner Cable -- each company desperately wants the Dodgers' television rights -- and with private equity funds that could finance the launch of a regional sports network” (L.A. TIMES, 2/18).

SPRING FORWARD? The L.A. TIMES' Shaikin cited U.S. Bankruptcy Court documents that noted profits at Camelback Ranch, the Spring Training home for the Dodgers and White Sox, “fell 65% in two years -- from $2,162,047 in 2009 to $759,017 in 2011.” The documents noted that the main source of income at the venue “is ticket revenue, which fell from $3,567,800 in 2009 to $2,973,801 in 2011.” Cactus League attendance data showed that the average attendance for White Sox games “hardly budged -- from 6,119 in 2009 to 6,117 in 2011.” But the average attendance for Dodgers games “dropped 17% -- from 9,130 in 2009 to 7,365 in 2011.” Ticket prices at Camelback Ranch “have been cut this spring, with half-price tickets available for the Dodgers' first three games” (LATIMES.com, 2/17).

AND THE SURVEY SAYS ... A Marketing Arm survey found that in January '11, with the Dodgers “coming off a fourth-place finish in the National League West and owner Frank McCourt well into his second year of nasty divorce proceedings, the Dodgers still were more popular than every team in town except the Lakers.” By November, the team “had fallen to fourth in local popularity, behind the Lakers, USC sports teams and the Angels.” Still, Dodger Stadium “remained the most popular sports venue in the area” (L.A. TIMES, 2/18).
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Franchises, Los Angeles Dodgers

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