Dodgers headed to bankruptcy court auction
AP Sports Writer
NEW YORK (AP) – Maybe a “For Sale” sign should be erected outside Dodger Stadium.
Team, ballpark, land and television rights available. Price: $1 billion and up.
The process of finding a new owner for the Los Angeles Dodgers began early Wednesday when current boss Frank McCourt and Major League Baseball released a joint statement saying they had agreed to a court-supervised sale of the once-glamorous and now bankrupt franchise.
In the long-term, the deal will allow the Dodgers to move ahead and try to get back to baseball’s elite. But the club’s fans may well have to endure another season adrift as the sale works itself out.
While the sides hope for a quick deal, giving McCourt the money to pay his divorce settlement by April, MLB sales sometimes drag on for six months to 1 1/2 years. Once bidders are identified, the court is likely to conduct an auction.
“Baseball can choose to have their approval process move like molasses in winter or like Castor oil through a baby,” said Marc Ganis, president of Sportscorp, a Chicago-based consulting firm.
The price likely will break the record for a baseball franchise, topping the $845 million paid by the Ricketts family for the Chicago Cubs in 2009.
Investors will be solicited by the Blackstone Group, McCourt’s investment banker. Dallas Mavericks co-owner Mark Cuban and Pittsburgh Penguins co-owner Ron Burkle, who lives in California, have been mentioned as possibilities. Asian investors have made inquiries.
Former agent Dennis Gilbert, a friend of Chicago White Sox chairman Jerry Reinsdorf, hopes to put together a group. Former Dodgers Steve Garvey and Orel Hershiser have said they might be interested, as has former general manager Fred Claire.
Claire is aligned with former Oakland Athletics President Andy Dolich and former Dodgers batboy Ben Hwang, who brought in the financial backers. Claire, the Dodgers’ GM from 1987-98, assumes the price will be $800 million to $1 billion and up.
“I’ve been working on this venture since early July,” Claire said. “My motivation is to see the Dodgers be what they need to be in the community.”
Given the future broadcasting rights at stake and their ownership of regional sports networks in southern California, News Corp. and Time Warner Inc. have been considered possible bidders, as could The Walt Disney Co. But News Corp. is out, an executive said.
“Contrary to questions I got today, we’re not buying the Dodgers,” News Corp. chief operating officer Chase Carey told analysts on a conference call Wednesday. “Sports rights are probably becoming more complicated. I think it’s just a reality of the marketplace. … Outside Southern California, we’ve got pretty long-term agreements in place. I feel we’ll be able to navigate Southern California reasonably well.”
Real estate companies may join in, given the land the Dodgers own in Chavez Ravine that potentially could be developed. Massive amounts of bank financing will have to be arranged.
“And you’ve got plenty of FOBs interested in the Dodgers,” Ganis said, referring to “Friends of Bud” – Commissioner Bud Selig.
Blocked from building a ballpark in San Jose, A’s owner Lew Wolff could be injected into a bidding group. Boston Red Sox chairman Tom Werner – a former San Diego Padres owner – lives in southern California. Milwaukee owner Mark Attanasio also is from California.
“I’m very interested in having the sale occur for everybody involved,” said Wolff, a successful L.A. real estate developer. “As far as my interest in purchasing the Dodgers, I don’t have any. I’m interested in getting a new venue for the A’s.”
But would Selig, Wolff’s fraternity brother at Wisconsin, ask Wolff to join a bidder?
“That would be absurd,” Wolff said. “The Dodgers are going to go to an auction, and the highest bidder hopefully will revitalize the franchise.”
Attanasio also said he doesn’t want to own the Dodgers.
“The question was asked of Mark earlier this year and the answer hasn’t changed,” Brewers spokesman Tyler Barnes said. “He is committed to Milwaukee and the Milwaukee Brewers.”
Asked whether he had interest, Werner responded in an email: No, but thanks for asking.”
Winners of six World Series titles but none since 1988, the Dodgers have been in various states of turmoil since October 2009, when Frank and Jamie McCourt separated and Frank fired her as the team’s chief executive officer.
A California judge invalidated a postnuptial agreement last December, allowing Jamie to seek half ownership of the team.
San Francisco Giants fan Bryan Stow was nearly beaten to death outside Dodger Stadium on opening day this season, bringing attention to security cutbacks under McCourt, and Selig installed former Texas Rangers President Tom Schieffer as the Dodgers’ financial monitor in April, ruling he must approve any expense of $5,000 or more.
Just days before the team was expected to miss payroll, the Dodgers filed for bankruptcy protection in late June. The move came after Selig refused to approve a 17-year agreement between the Dodgers’ and Fox’s Prime Ticket subsidiary that would have been worth $2 billion or more. MLB feared McCourt would use about half of an intended $385 million cash advance to fund his divorce.
Given the disarray, the Dodgers finished third in the NL West at 82-79, had just three sellouts and fell short of 3 million in home attendance in a full season for the first time since 1992.
Last month, Frank and Jamie reached a divorce settlement that calls for her to receive about $130 million by April. MLB, which accused McCourt in court papers of “siphoning off more than $180 million” from the team, asked U.S. Bankruptcy Judge Kevin Gross to order a sale of the franchise, and McCourt sought permission to auction his broadcast rights, prompting a lawsuit by Fox. The sides were scheduled for a hearing before Gross starting Nov. 29.
A two-sentence statement issued at 12:54 a.m. EDT said MLB and Frank McCourt agreed “to a court supervised process to sell the team and its attendant media rights in a manner designed to realize maximum value for the Dodgers and their owner.”
The statement could be construed as saying McCourt is giving up his attempt to sell future broadcast rights. Instead of publicly filing papers, lawyers for the parties met in chambers Wednesday with Gross, a person familiar with the session said, speaking on condition of anonymity because there was no announcement. The person said MLB may pre-approve bidders before the auction.
The last two sales of the Dodgers were anything but swift.
Having taken control of the team in 1950 when it still played at Brooklyn’s Ebbets Field, the O’Malley family announced it wanted to sell in January 1997. Baseball’s ownership committee gave approval that July to draft an agreement with the Fox Entertainment Group subsidiary of Rupert Murdoch’s News Corp. The deal, valued at $311 million, wasn’t approved until March 1998.
Fox began seeking possible buyers in 2002 and announced an agreement with McCourt in October 2003. MLB approved the deal the following Jan. 29, but it then took several weeks for the $421 million sale to close on Feb. 13.
And since then, Schieffer said, McCourt has fractured the franchise, ballpark and land into 26 interlocking entities.
AP Baseball Writer Janie McCauley, AP Sports Writers Jimmy Golen and Chris Jenkins, and AP Business Writer Ryan Nakashima contributed to this report.