Basketball Legend Magic Johnson Buys Bankrupt LA Dodgers For $2B
A group that includes former Los Angeles Lakers star Magic Johnson and longtime baseball executive Stan Kasten have agreed to buy the bankrupt baseball team the LA Dodgers for a record $2billion. The agreement, revealed about five hours after Major League Baseball owners approved three finalists for the auction, is to lead to a transfer of the team by the end of April. It is subject to approval in federal bankruptcy court.
The price would be easily a record for a North American sports franchise.
‘I am thrilled to be part of the historic Dodger franchise and intend to build on the fantastic foundation laid by Frank McCourt as we drive the Dodgers back to the front page of the sports section in our wonderful community of Los Angeles,’ Johnson said in a statement.
The 52-year-old Johnson played 13 seasons for the Los Angeles Lakers, winning five NBA championships and three MVP awards in a Hall of Fame career.
He retired from the NBA in 1991 after being diagnosed with HIV, the virus that causes AIDS.
He briefly came out of retirement during the 1995-96 season and had a short stint coaching the Lakers. Since leaving basketball, he has been very successful in business, investing in movie theaters, a production company and restaurants.
He has also been an activist in the fight against HIV.
As part of the agreement, the Dodgers said Mr McCourt and ‘certain affiliates of the purchasers’ would acquire the land surrounding Dodger Stadium for $150million.
Mark Walter, chief executive officer of the financial services firm Guggenheim Partners, would become the controlling owner.
The acquiring group, called Guggenheim Baseball Management, includes Mandalay Entertainment chief executive Peter Guber, and Stan Kasten, former president of the Atlanta Braves and Washington Nationals baseball teams, who is expected to become the team’s senior day-to-day executive.
‘This agreement with Guggenheim reflects both the strength and future potential of the Los Angeles Dodgers, and assures that the Dodgers will have new ownership with deep local roots, which bodes well for the Dodgers, its fans and the Los Angeles community,’ Mr McCourt said.
He paid 430 million dollars in 2004 to buy the team, Dodger Stadium and 250 acres of land that include the car parks, from the Fox division of Rupert Murdoch’s News Corp, a sale that left the team with about 50 million dollars in cash at the time.
The team’s debt stood at $579million as of January, according to a court filing, so even after the divorce payment, taxes and legal and banking fees, he stands to make several hundred million dollars.
The Guggenheim team beat two other bidders, including Stan Kroenke, majority shareholder of Arsenal FC as well as owner of a series of US sports franchises.
The acquiring group would gain the ability to sell the Dodgers’ local broadcasting rights starting with games in 2014. The Guggenheim group 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 Dodgers filed for bankruptcy protection in late June, just days before the team was expected to miss payroll.
The filing came after baseball Commissioner Bud Selig refused to approve a 17-year agreement between the Dodgers and Fox’s Prime Ticket subsidiary that would have been worth $2billion or more.
The current record for a baseball franchise is the $845 million paid by the Ricketts family for the Chicago Cubs in 2009.