SBD/December 17, 2012/Franchises

In Light Of Near-Record Spending, Dodgers' New Business Model Examined

Dodgers ownership hopes to expand the team's reach to Mexico and Asia
The Dodgers under Owner Guggenheim Baseball Management have "invested close to $1 billion in player contracts, stadium renovations and the purchase of controlling interest in the stadium parking lots," and the L.A. TIMES' Bill Shaikin wondered if this is the "folly of novice owners, or a shrewd business model." Sports business analysts "run the numbers, and they see red." Guggenheim President and team co-Owner Todd Boehly said that the owners "hope to extend the Dodgers' reach into Mexico and Asia and use the team as a marquee property in what could become a sports and entertainment empire." Next up "could be the acquisition of AEG, which could make Guggenheim the kingmaker for sports and concerts in Southern California." Boehly said, "Our core strategy will prove itself out. We'll be able to hold our heads really high." GBM since the season ended has "poured $100 million into renovations." Boehly said, "If we believe what we believe, which is that we invested $2 billion that is now worth $3 billion, we have $1 billion to invest over time, back into the enterprise." If Boehly and Dodgers Chair Mark Walter were to "buy AEG, they would have full ownership of the Dodgers" and NHL Kings, partial ownership of the Lakers and "control of Dodger Stadium, Staples Center and L.A. Live." Boehly said, "Obviously, we look at lots of deals. This one, we look at with great interest because of the community that it is in. It would do tremendous things for what we could deliver to the Los Angeles community." Boehly: "At the end of the day, I think Mark probably is going to be one of the most enlightened owners in sports franchise history because of how thoughtful he is about how the pieces work together. ... He is perfectly aligned with giving the fans the best experience, because that is what creates the most value" (L.A. TIMES, 12/16).

KASTEN'S CONCLUSION: Dodgers President & CEO Stan Kasten said, "What's really happening here is the building of a franchise. ... Stadium infrastructure, organizational infrastructure -- those are the critical things on which long-term success is built." Kasten: "We're going to be using all the tools that we can, not just spending money" (N.Y. TIMES, 12/15). Kasten added, "I think when we took over we had about 17,000 season ticket-holders, which may have been an all-time low, and we're up around 25,000 right now. Our TV ratings were up the second half of last season and we're all just looking forward to what the season brings" (BOSTON GLOBE, 12/16). ESPN L.A.'s Mark Saxon wrote the Dodgers will "have a payroll exceeding $230 million in 2013, easily a major league record." Dodgers GM Ned Colletti said that the high rate of spending is a "result of artificially low payrolls in the final seasons" under former Dodgers owner Frank McCourt. Colletti said, "Our payroll a year ago was $90 (million). We're up over $200 (million) now. If you added it all up, it might be over 300 (million) over two years. Had we been at 150 last year and 150 this year, nobody would be saying a word, right?" (, 12/14).   
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Los Angeles Dodgers, MLB

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