Three bidders remain in contention for the Los Angeles Dodgers, whose owner, Frank McCourt, will conduct a final auction that may begin on March 27, according to two people with knowledge of the sale process.
Still in the running for the bankrupt Major League Baseball team in a sale that may fetch at least $1.5 billion, a record for a U.S. sports franchise, are Steve Cohen of SAC Capital Advisors LP, St. Louis Rams football team owner Stan Kroenke and a group led by basketball Hall of Fame player Magic Johnson, said the people, who declined to be identified because those involved signed nondisclosure agreements.
The remaining bidders will seek final approval from baseball’s owners, probably on March 27, one of the people said. Once that happens, the auction may begin that day or the following morning, according to the people.
The MLB yesterday filed an objection to the Dodgers’s proposed bankruptcy-exit plan, saying it contradicts a settlement the team reached with baseball officials last year. The objection is “limited” and doesn’t mean Baseball Commissioner Bud Selig is reneging on his promise to help the Dodgers win court approval for its reorganization plan, which is required before the team can exit bankruptcy, MLB officials said in the objection in federal court in Wilmington, Delaware.
U.S. Bankruptcy Judge Kevin Gross is scheduled to consider approval of the reorganization plan at a hearing April 13.
The reorganization plan contains minor flaws that should be corrected, including a provision that appears to “release numerous persons (including Dodgers’ players, coaches and personnel, etc.) from violations of MLB rules and regulations,” MLB said in court papers.
Such broad legal releases also violate court precedent, MLB said.
Baseball spokesman Pat Courtney and Robert Siegfried, a spokesman for the Dodgers, declined to comment on the sale. Peter Cohen of Blackstone Group LP (BX), which is handling the sale for McCourt, didn’t return an e-mail seeking comment.
McCourt has agreed to close the sale of the team by April 30, the same day he must pay his ex-wife, Jamie, $131 million as part of their divorce settlement.
The Dodgers were put up for sale in November and garnered more than 10 bids, including an offer from Dallas Mavericks basketball team owner Mark Cuban.
Filed for Bankruptcy
Last year the Dodgers filed for bankruptcy after Selig rejected a television contract that McCourt had negotiated with News Corp.’s Fox, the club’s current broadcast partner.
The new owner will get the team, Dodger Stadium and the right to sell broadcast rights in 2013, when the existing contract expires.
News Corp. and Time Warner Cable Inc. (TWC), which last year announced a plan to start a pair of regional sports networks around the Los Angeles Lakers basketball team, probably will bid for the television rights, sports bankers including Sal Galatioto of Galatioto Sports Partners in New York have said. Each company might seek a minority investment in the team as a means of eventually getting the broadcast rights, the bankers said.
The new owner may sign a traditional rights agreement or, like the New York Yankees did with the YES Network, start a regional sports network with the baseball team as anchor programming.
Los Angeles is the No. 2 media market in the U.S. behind New York.
The Dodgers, their stadium and surrounding parking lots are worth $1.4 billion, second among MLB’s 30 teams to the Yankees, according to Forbes magazine. The parking lots aren’t part of the sale, although McCourt may choose to include them in an effort to solicit higher bids for the franchise that broke baseball’s color barrier in 1947.
Attorneys for McCourt said in court documents the team would fetch about $1 billion.
The record price for a major-league franchise sale was set three years ago when TD Ameritrade Holding Corp. founder Tom Ricketts paid the Tribune Co. (TRB) $845 million for the Chicago Cubs baseball team and Wrigley Field.
The sale would end a tumultuous tenure for McCourt, whose club reached the postseason four times in his first six seasons.
McCourt fought with Selig, Fox Sports and Jamie McCourt for months in bankruptcy court before finally agreeing to sell the team. The sale gives McCourt more influence over the process than most team owners, in part by requiring pre-approval from MLB of the bidders and by imposing a mediator who can overrule MLB opposition in certain circumstances.
The case is In re Los Angeles Dodgers LLC, 11-12010, U.S. Bankruptcy Court, District of Delaware (Wilmington).
To contact the reporters on this story: Scott Soshnick in New York at email@example.com; Steven Church in Wilmington, Delaware, at firstname.lastname@example.org.
To contact the editors responsible for this story: Michael Sillup at email@example.com; John Pickering at firstname.lastname@example.org