Johnson signs on to lend his magic to Dodgers
March 28, 2012
LOS ANGELES (AP) – Magic Johnson is about to learn $2 billion only buys you so much. Now he’ll need to bring the Los Angeles Dodgers the same success he brought the Lakers.
News that Johnson and his partners agreed to purchase the team sparked a groundswell of excited chatter and optimism Wednesday that the man who ran “Showtime” could restore luster to the once-proud franchise.
The amount Johnson and his partners are paying would be mind-blowing if it was just for the team itself. But it also gives Johnson’s group the right to reel in future riches from TV and real estate associated with the Dodgers.
“A big part of the purchase price is all those other things,” said David Carter, executive director of USC Sports Business Institute. “You’ve got a great piece of property you can develop and make a game-day experience around Chavez Ravine. A likely billion-dollar cable (television) rights deal that will come out of it makes it a very unique sale.”
Current owner Frank McCourt hand-picked Johnson’s group to buy the Dodgers on Tuesday, just five hours after Major League Baseball approved three finalists in a bankruptcy auction. The deal is one of several steps toward a sale of the team by the end of April. It is subject to approval by a federal bankruptcy judge.
“The interest in this franchise and its historic sale price are profound illustrations of the great overall health of our industry,” baseball Commissioner Bud Selig said. “This has been a long, difficult process, and I once again want to thank the great Dodger fans for their loyalty and patience.”
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Selig has the right to review the final agreement. If MLB has any objections, it would bring them up with mediator Joseph Farnan Jr.
Johnson’s group would gain the ability to sell the Dodgers’ local broadcasting rights starting with games in 2014. It likely would use money gained from the rights sale – or from the team’s own network with outside investment – and use those funds to pay down the acquisition debt. The team’s debt stood at $579 million as of January, according to a court filing.
Johnson is seemingly a perfect fit. He lives locally, he already knows what it takes to win championships, and he’s proven he can succeed in real estate, retail and entertainment – keys to helping the team bolster its coffers in pursuit of big-money free agents.
“He’s well-grounded and well-respected,” Carter said. “You have a strong presence in the community, he’s connected to city hall, and has a good relationship with the media. All these things are important and will help the community get over Frank.”
And Johnson still has the dazzling smile that will make him a great public face for what once was – and could be again – one of baseball’s marquee franchises.
“Great day for the Dodgers,” slugger Matt Kemp said from spring training in Glendale, Ariz. “As Magic used to say, the Dodgers were the team that used to run L.A. Definitely we were going to have more fans out there this year. Now there’s another reason to have the fans turn out.”
Retired Dodgers manager Tom Lasorda has known Johnson since he first came to play for the Lakers.
“The most important part is he’ll talk to some of the players individually about how to win. That’s what we got to do right now is win again and bring our fans back,” he said. “He knows how to talk to people, he knows how to impress people and how to build people up.”
Hours after the announcement that Johnson’s group was the winning bidder, the Dodgers said their April 10 home opener was sold out.
“As soon as you hear the name Magic Johnson, it turns into a positive,” Dodgers manager Don Mattingly said. “There’s positive energy around the ball club, around the city.”
Johnson’s group didn’t comment Wednesday, but he said after their winning bid was announced that he was thrilled to be part of the franchise “as we drive the Dodgers back to the front page of the sports section in our wonderful community of Los Angeles.”
Johnson’s business acumen is equal to his success on the court. The 52-year-old Hall of Fame guard won championships at Everett High in Lansing, Mich., at Michigan State and five NBA titles with the Lakers.
After being forced to retire suddenly in 1991 with HIV, Johnson remade himself into a successful entrepreneur and became a respected voice as an HIV activist and campaigned to educate people about the disease.
Johnson is well-known for his self-named nationwide chain of movie theaters, movie studio, and promotion company. He previously owned more than 100 Starbucks franchises and had a minority ownership in the Lakers. His other ventures include commercial real estate and health clubs.
“Magic Johnson is probably the most beloved sports figure in Los Angeles history,” Lakers owner Jerry Buss said. “He has been a success in everything else he’s become involved with, most notably his spectacular business career and also his educational campaign on behalf of HIV awareness.”
Johnson’s reputation as a winner in sports and business lends a new air of credibility to the Dodgers, who saw attendance plummet below 3 million in McCourt’s final season when fans bashed his stewardship of the team.
“I think they’ll be able to fill the stadium just because of Magic,” said Mike Baldwin, a longtime fan who quit going to games after McCourt bought the team in 2003. “I don’t think baseball could have done a better job than to pull him in.”
Johnson’s partners in buying the Dodgers include Stan Kasten, former president of the Atlanta Braves and Washington Nationals; and Peter Guber, a longtime Hollywood executive and co-owner of the NBA’s Golden State Warriors.
Mark Walter, chief executive officer of the Chicago-based financial services firm Guggenheim Partners, would be the controlling owner. Kasten would be the top day-to-day executive. The group’s other investors include Guggenheim Partners President Todd Boehly and Bobby Patton, whose investments include oil and gas properties.
When baseball’s ownership committee considered the bids, there initially were four votes against Johnson’s group, a person familiar with baseball’s deliberations said, speaking on condition of anonymity because the details were not made public. Those owners were concerned about the financing of the group, with money coming from insurance funds at Guggenheim.
During the conference call of all teams Tuesday, there was concern expressed about whether the auction process was being run properly. Farnan got on that call and persuaded them to approve all three finalists, saying he would be at the final auction and make sure it was run correctly. Following that, all three groups were approved unanimously.
The process never reached a Wednesday auction, given the Johnson group’s bid.
Other finalists were groups headed by St. Louis Rams owner Stan Kroenke and Steven Cohen of the hedge fund SAC Capital Advisors. Cohen’s bid at the time of the MLB teleconference Tuesday was $1.3 billion, the person familiar with baseball’s deliberations said. Kroenke was at $1.5 billion.
While others are putting far more money into the winning group, Johnson’s name and smile are what lit up fans’ moods in the city where he remains the most enduring and beloved sports superstar.
“There’s a lot of euphoria about the fact that it’s Magic and it’s no longer Frank,” Carter said. “He’ll have a honeymoon period and I think most people in Southern California hope he doesn’t need it.”
AP Sports Writer Ron Blum in New York and Associated Press Writer John Rogers in Los Angeles contributed to this report.