Los Angeles Lakers star Magic Johnson and longtime baseball executive Stan Kasten agreed Tuesday night to buy the Los Angeles Dodgers from Frank McCourt for a record $2 billion.
The price would shatter the mark for a sports franchise. Stephen Ross paid $1.1 billion for the NFL's Miami Dolphins in 2009, and in England, Malcolm Glazer and his family took over the Manchester United soccer club in 2005 in a deal then valued at $1.47 billion.Mark Walter, chief executive officer of the financial services firm Guggenheim Partners, would become the controlling owner.The deal, revealed about five hours after Major League Baseball owners approved three finalists for an intended auction, is one of several steps toward a sale of the team by the end of April. It is subject to approval in federal bankruptcy court."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.Said Dodgers general manager Ned Colletti: "We're thrilled that the bidding process has concluded and certainly looking forward to working with the new ownership group to bring another world series championship to L.A. I think it's tremendous for the city and the fans of the Dodgers."He added: "I think it was important to have deep L.A. roots, and that is what this group also brings. I think that is important to the fans, especially those in Southern California. Magic is not only a great basketball player, but also a great businessman in the city."
As part of the agreement, the Dodgers said McCourt and "certain affiliates of the purchasers" would acquire the land surrounding Dodger Stadium, including its parking lots, for $150 million. Sources with knowledge of the situation told ESPNLosAngeles.com's Tony Jackson that means the group will purchase half the Dodger Stadium parking lots, which were deemed to have a total value of $300 million, with McCourt keeping the other half. The source said it has yet to be determined how that relationship will work and whether the new ownership group still will be forced to lease the McCourt-owned half of the lots."If they invested that much money, I'm sure they'll invest to get us a winner," said Tommy Lasorda, the Dodgers' retired Hall of Fame manager. "I wish them all the luck, and I admire them. I know both of them. I know Magic from the day he came into Los Angeles as a basketball player for the Lakers."The acquiring group, called Guggenheim Baseball Management, has several other investors, among them Mandalay Entertainment chief executive Peter Guber, Guggenheim Partners president Todd Boehly and Bobby Patton, who operates oil and gas properties among his investments. Kasten is the former president of the Atlanta Braves
and Washington Nationals
."I am truly honored to have partnered with such talented individuals and to be associated with the Dodgers organization," Walter said. "We look forward to building upon the legacy of the Dodgers and providing long-term stability to one of the most revered franchises in baseball."The 52-year-old Johnson played 13 seasons for the 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 in the 1995-96 season and had a short stint coaching the Lakers. Since leaving basketball, he has been successful in business, investing in movie theaters, a production company and restaurants.Pricey Acquisition
The $2 billion dollar price tag for the Dodgers is the largest sale price paid by any current MLB owner. Here's that list:
He also has been an activist in the fight against HIV.Kobe Bryant, speaking after the Lakers' 104-101 victory at Golden State on Tuesday night, said this about Johnson's group acquiring the Dodgers:"I'm upset he didn't cut me in," Bryant said. "I'm going to have to talk to him about that."I'm happy for him," he added. "Everybody knows how well he's loved in Los Angeles, and he's started another chapter in his life, another chapter in his post-NBA career, [by] rebuilding the Dodgers franchise."McCourt paid $430 million in 2004 to buy the team, Dodger Stadium and 250 acres of land that includes the parking lots, from the Fox division of Rupert Murdoch's News Corp., a sale that left the team with about $50 million in cash at the time. The team's debt stood at $579 million as of January, according to a court filing, so McCourt stands to make hundreds of millions of dollars even after a $131 million divorce payment to former wife Jamie, taxes, and legal and banking fees.Kasten is expected to wind up as the team's top day-to-day executive.The other two finalists were:• Stan Kroenke, whose family properties own the NFL's St. Louis Rams
, the NBA's Denver Nuggets
, the NHL's Colorado Avalanche
and Major League Soccer's Colorado Rapids. He also is majority shareholder of Arsenal in the English Premier League.• Steven Cohen, founder of the hedge fund SAC Capital Advisors and a new limited partner of the New York Mets
; biotechnology entrepreneur Patrick Soon-Shiong; and agent Arn Tellem of Wasserman Media Group.It remains to be seen whether Major League Baseball will challenge the deal in U.S. Bankruptcy Court in Delaware, where the case is before Judge Kevin Gross.