SBJ/February 6-12, 2012/Franchises

Print All
  • Dodgers bankruptcy piles up big numbers

    Records are continuing to fall for the Los Angeles Dodgers.

    Already poised to become the most lucrative team sale in U.S. pro sports history, the Dodgers are also thought to have become the most expensive American team bankruptcy ever in terms of legal fees and expenses.

    According to documents filed last week with the U.S. Bankruptcy Court for the District of Delaware, the Dodgers have spent $15.96 million in bankruptcy-related expenses during the seven months ended Dec. 31, 2011. The club filed for bankruptcy protection June 27, within that window of time.

    The sum exceeds fees spent in bankruptcy cases for other sports teams, including the Texas Rangers, Chicago Cubs and Pittsburgh Penguins, many of which have hovered in the $5 million to $8 million range. The Phoenix Coyotes, another hotly contested team bankruptcy case, are believed to have incurred more than $14 million in fees and expenses when including those paid by the team itself and the NHL.

    The Dodgers’ sum does not include millions in legal fees paid by MLB, Fox Sports Net and vendor Facility Merchandising Inc. as the club battled with each during the run of the case. The club has since settled with each, and owner Frank McCourt is now on track to sell the team by April 30 as part of his deal with MLB. The more than $20 million in legal fees incurred by McCourt and ex-wife Jamie in their high-profile divorce is also not included.

    “This was never a conventional case, even for a sports team bankruptcy,” said Thomas Salerno, partner for Squire Sanders in Phoenix, and lead attorney for the Coyotes in their case. Salerno is not involved in the Dodgers case. “The Dodgers bankruptcy was born in the flames of litigation, and continued to engender a huge amount of litigation in a very short period of time.”

    “Is bankruptcy expensive? Yes. But is this surprising? No, not considering all the issues involved with the Dodgers … and the higher costs of the New York and [Los Angeles] law firms involved,” Salerno said.

    The club is slated to exit bankruptcy protection in April in conjunction with the sale, meaning more expenses will be incurred between now and then. But with all the major disputes in the case resolved, the escalation in fees will likely slow.

    The Dodgers’ highest-paid player in 2011, shortstop Rafael Furcal, earned $13 million, and no Dodgers player this coming season is slated to earn more than the $15.96 million paid to date in bankruptcy expenses.

    Dewey & LeBoeuf LLC, the lead law firm representing the Dodgers in the bankruptcy, has been paid $5.46 million thus far, with more yet to come. The firm’s lead attorney on the case, Bruce Bennett, is billing $975 an hour.

    The Dodgers’ bankruptcy fees include a hefty $3.91 million for December alone as the club litigated extensively against FSN over how and when the club’s post-2013 cable TV rights would be marketed. The parties settled in early January, with the deal preserving the existing rights deal and precluding the Dodgers from any marketing of the future rights before this fall.

    Still, the promise of massive television-related riches to come have made the Dodgers bidding as much of a media rights transaction as it is a sale of one of MLB’s iconic franchises. The Dodgers, aided by advisory firm The Blackstone Stone Group LP, have winnowed the initial bidding to about eight groups, with the final sales price expected to top $1.5 billion.

    The figure will smash the $845 million purchase of the Cubs in 2009 by the Ricketts family, which stands as the record for an MLB team sale. Several NFL teams are estimated to be worth more than $1.5 billion, but Stephen Ross’ $1.1 billion deal for the Miami Dolphins in 2008 stands as the high-water mark for an actual transaction. Both the Cubs and Dolphins deals included stadiums. Dodger Stadium also is part of the current sale, though the facility’s surrounding land and parking lots are not.

    Print | Tags: Franchises
  • Petco wireless upgrade part of fan program

    The San Diego Padres have signed a long-term deal with Verizon Wireless to upgrade Petco Park for Wi-Fi and 4G coverage that will ultimately serve as the backbone of the team’s new fan membership program.

    The San Diego Padres’ membership program will offer discounts on tickets, concessions and merchandise.
    ANDY HAYT / SAN DIEGO PADRES
    The agreement is one of the first deals for Verizon Wireless in Major League Baseball, said Tom Garfinkel, the Padres’ president and chief operating officer.

    Sources say the deal spans more than 10 years and is valued in the high six figures to low seven figures annually.

    In San Diego, the installation of a new distributed antenna system to meet 4G needs and a separate Wi-Fi platform will greatly improve mobile phone service for Padres fans, Garfinkel said. Verizon Wireless is covering all project costs, he said.

    Both systems provide the foundation for a larger program using the in-park technology that MLB Advanced Media has developed. The Padres’ goal is to “layer” other elements on top that are connected to a fan loyalty program under development, such as a special section where members can access tablets or the ability to order food and beverages from their seats.

    “Our vision is for a fan membership program that we came up with about halfway through the 2011 season, that we call ‘Padres 2013’ internally,” Garfinkel said. “It incorporates enhancements to several elements of how fans experience the Padres.”

    The Padres formed a committee to create the program, led by Jarrod Dillon, vice president of ticket sales; Steve Reese, vice president of technology; and John Abbamondi, vice president of strategy and business analysis.

    Brent Stehlik, the club’s senior vice president of business operations, oversees the committee. The program will allow fans to sign up and become members for free and receive discounts on tickets, concessions, merchandise and seat upgrades.

    Members can elevate their status by becoming season-ticket holders and attending games, making them eligible for exclusive experiences such as early entry to the park, dinner with a player and first access to postseason games, concerts and the special events at the park.

    “Each level will have more exclusive benefits,” Garfinkel said.

    The Padres will test the program this season with about 300 to 500 people tied to 150 to 200 season-ticket accounts.

    They will receive a smart card with stored value to gain admission to the ballpark and to buy food and merchandise. The test group will have access to a special page on padres.com where they can manage their accounts and add value to individual game tickets.

    During the 2012 season, the Padres will refine the mechanics and benefits of the fan membership program to prepare for a bigger rollout in 2013. By that time, both Verizon Wireless platforms will be fully installed to support the new initiative.

    “Our goal is to create value for the season-ticket holder that can’t be transferred to the secondary market,” Garfinkel said. “The Verizon deal … is definitely an important first step.”

    Print | Tags: Franchises
  • Wolves see chance to court Hispanic fans

    The Minnesota Timberwolves are ramping up their efforts to reach out to their Hispanic fans as they try to capitalize on the popularity of rookie point guard Ricky Rubio and free agent acquisition J.J. Barea.

    Barea (left) and Rubio star on a new Spanish-language website.
    The team on Tuesday unveiled an all-Spanish website, timberwolves.com/espanol, that will feature regular video and written features on Rubio and Barea from Wolves Spanish radio announcer Alfonso Fernandez. Rubio is from Spain; Barea is from Puerto Rico.

    “With the popularity of both Ricky and J.J. Barea, our Spanish-language page will serve as a great resource for our fans in the Latino community to follow the Wolves and their two favorite stars,” Wolves Chief Marketing Officer Ted Johnson said in a statement.

    The Wolves also announced they will host two Spanish heritage nights at Target Center this season, featuring pregame and halftime entertainment from Latino performers from the Twin Cities area. The first one will take place on Feb. 15 for the Wolves’ game against Charlotte; the second will be April 4, versus Golden State.

    Those initiatives come on the heels of the Wolves’ recent announcement that the team will broadcast 12 games in Spanish this season on La Mera Buena (KBGY-F Twins hired Miguel Ramos as director of emerging markets M 107.5), double the number from last season.

    The Wolves aren’t the only Minnesota team reaching out to Hispanics. The Minnesota Twins hired Miguel Ramos as director of emerging markets four years ago. His job is to build bridges between the ballclub and minority communities in the Upper Midwest.

    John Vomhof Jr. writes for the Minneapolis/St. Paul Business Journal, an affiliated publication.

    Print | Tags: Franchises
Video Powered By - Castfire CMS Powered By - Sitecore Digital Agency - Digitaria

Report a Bug

© 2012 American City Business Journals. All rights reserved. Use of this Site constitutes acceptance of our User Agreement (updated 3/14/12) and Privacy Policy (updated 3/14/12).

Your California Privacy Rights.

The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of American City Business Journals.

Ad Choices.