Bloomberg News

MLB, Dodgers Agree to Sell Team in Court-Supervised Process

November 02, 2011

(Updates with Cubs, Astros sales in 11th, 12th paragraphs.)

Nov. 2 (Bloomberg) -- Major League Baseball and the Los Angeles Dodgers agreed to a court-supervised sale of the team, four months after the six-time World Series champions filed for Chapter 11 bankruptcy protection.

The process will be managed by the Blackstone Group LP, the world’s largest private-equity firm, according to a joint statement from the league and the Dodgers.

The sale of the team and its media rights will proceed “in a manner designed to realize maximum value for the Dodgers and their owner, Frank McCourt,” the statement said.

The Dodgers may sell for a record $1 billion, sports bankers including Gordon Saint-Denis, president of Katonah, New York-based Major League Sports Consulting LLC, said after the team entered bankruptcy on June 27. Forbes magazine values the Dodgers at $800 million, third-highest in baseball after the New York Yankees and Boston Red Sox.

MLB Commissioner Bud Selig in April appointed former Texas Rangers President J. Thomas Schieffer to monitor day-to-day operations of the Dodgers because of “deep concerns regarding the finances” of the club.

Selig said in June that a 17-year TV rights deal between the Dodgers and Fox Sports, which McCourt valued at about $3 billion, would harm the franchise in the long term and rejected the proposal. The Dodgers filed for bankruptcy a week later, listing $370.6 million in assets and $643.9 million in debt as of June 30.

Selig Statements

In subsequent court filings and public statements, Selig has called McCourt unfit to keep the franchise he bought in 2004 for $421 million from Rupert Murdoch’s News Corp., which later propped him up with loans.

Selig has claimed that McCourt mismanaged the team and “looted” $189 million from the Dodgers for his own purposes. The Dodgers in turn accused Selig of driving the team into bankruptcy by failing to approve the Fox deal.

The Dodgers, who last won the World Series in 1988, finished third in the five-team National League West this year with an 82-79 record. They last qualified for the postseason in 2009, losing in the second round of the playoffs to the Philadelphia Phillies.

Baseball in 2010 forced Tom Hicks to sell the Texas Rangers after the former owner defaulted on debt of $525 million in March 2009. U.S. Bankruptcy Judge Stacey Jernigan approved the $593 million sale in August last year to a group including Hall of Fame pitcher Nolan Ryan. Texas reached the past two World Series, losing in 2010 to the San Francisco Giants and last month to the St. Louis Cardinals in seven games.

Cubs Sale

The highest price for an MLB team was about $845 million, which a group led by TD Ameritrade Holding Corp. founder Thomas S. Ricketts paid Chicago real-estate magnate Sam Zell for the Chicago Cubs in 2009.

Houston businessman Jim Crane is awaiting approval of his offer in May to buy the Astros for $680 million, MLB.com reported Oct. 20. Crane wants to cut the price by $50 million in exchange for agreeing to move the team to the American League, the New York Post said the same day.

McCourt and his ex-wife Jamie two weeks ago settled their divorce, without revealing the terms. The two had argued over ownership of the Dodgers following their breakup after 31 years of marriage.

The O’Malley family, who moved the Brooklyn-based team to Los Angeles in 1958, ran the Dodgers from 1950 until the franchise was sold in 1998 to News Corp.’s Fox Entertainment Group.

Game-day attendance at Dodger Stadium was a National League high 3.76 million in 2009. It has since slumped 22 percent to 2.94 million, sixth of 16 teams in the NL.

--Editors: Dan Baynes, Jerrold Colten, Dan Liefgreen

To contact the reporter on this story: Dex McLuskey in Dallas dmcluskey@bloomberg.net

To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net.


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