SBD/March 26, 2012/Franchises

Dodgers Bid Groups Down To Three; MLB Owners Expected To Vote This Week

Source said remaining bidders will likely seek final approval from MLB owners tomorrow
Three bidders "remain in contention" to purchase the Dodgers, and outgoing Owner Frank McCourt "will conduct a final auction that may begin" tomorrow, according to sources cited by Soshnick & Church of BLOOMBERG NEWS. The sources said that SAC Capital Advisors Founder and Mets investor Steven Cohen, Rams and EPL club Arsenal Owner Stan Kroenke and a group led by Basketball HOFer Magic Johnson are "still in the running." One source said that the remaining bidders "will seek final approval from baseball’s owners," probably tomorrow. Sources said that once that happens, the auction "may begin that day or the following morning" (BLOOMBERG NEWS, 3/24). In L.A., Bill Shaikin noted after MLB owners vote on the remaining bidders, final negotiations "would take place with Frank McCourt and Blackstone Advisory Partners, the investment bank brokering the sale." Retired U.S. District Court Judge Joseph Farnan, who is serving as the court-appointed mediator, has "asserted his control of the sale process at a time when relations are believed to be strained between MLB and Blackstone." Shaikin noted the joint bid by Grizzlies Owner Michael Heisley and L.A.-based Ares Capital co-Founder & Managing Partner Tony Ressler was "one of two rejected Friday," along with a bid by Shamrock Holdings President & CEO Stanley Gold and the Disney family (L.A. TIMES, 3/24).

AGENT OF CHANGE: SPORTSBUSINESS JOURNAL's Liz Mullen notes WMG's Arn Tellem is part of Cohen's bid group and if the two successfully purchase the Dodgers, the move is "expected to affect the sports agency business as a whole" as well as WMG. It is expected that Tellem "would be president of the Dodgers" if their bid is selected. As part of "prudent company planning, Tellem has been increasingly delegating hands-on agent activities -- such as client recruiting, client maintenance and contract negotiation -- to other agents at Wasserman over the past few years." Sources said that when the chance to own the Dodgers "became available, Tellem pursued the opportunity" with Casey Wasserman's "full knowledge and support" (SPORTSBUSINESS JOURNAL, 3/26 issue).

COURT REPORT: The L.A. TIMES' Shaikin notes McCourt is not "legally obligated to take the high bid" in the team's sale. The Dodgers' bankruptcy is "unusual in that all creditors will be paid in full," and the remaining proceeds will "go to McCourt." But Shaikin writes McCourt "would not leave much money on the table, to be sure." McCourt could "decide that an offer from Cohen -- all cash, no financing, plus assumption of the Dodgers' debts -- makes it most likely the deal can close on time." He could also "opt for perceived civic goodwill and select the Johnson group." Or he could choose Kroenke, with the "hope of playing a role in luring the NFL" back to L.A. The NFL still considers L.A. one if its markets, so Kroenke "would be in violation of the league's cross-ownership rules as soon as he bought the Dodgers." The NFL has "long coveted the Dodger Stadium parking lot as the site for a football stadium," but a source said that the NFL would be "reluctant to approve a stadium there if McCourt retained ownership of the property" (L.A. TIMES, 3/26). FORBES' Mike Ozanian wrote McCourt "will get the last laugh," as he is "going to pocket more than $400 million when all is said and done" (FORBES.com, 3/23).

FUTURISTIC PLANS: The L.A. TIMES' Shaikin noted ESPN analyst Orel Hershiser, whose group bidding for the Dodgers did not survive the first cut, released on Friday a "stadium renovation rendering," and he said that he "hoped to use the drawing to share with prospective new owners a vision for the preservation and enhancement of Dodger Stadium." Hershiser said that he and "his partners -- most notably, the South Korean electronics giant LG -- wanted to present their ideas to the fans as well as to potential owners." The core concept is to "turn Dodger Stadium into a 'futuristic electronic showcase.''' Shaikin noted some elements of the rendering "appear jarring -- a double-deck pavilion in right field, demolition of the reserve deck down the left-field line, and an overall view beyond the outfield wall that closely resembles" Rangers Ballpark in Arlington (L.A. TIMES, 3/25).
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