The $2.15 billion sale of the Dodgers officially closed yesterday as new owner Guggenheim Baseball Management (which include Magic Johnson from the Magic Hour) wired the remaining funds to former owner Frank McCourt. McCourt sold the team, the parking lots and 250 acres of land surrounding the stadium (and 3 miles from downtown LA).
The previous record sale was the Miami Dolphins, which Stephen Ross bought for $1.1 billion in 2011.
McCourt bought the team in 2004 for $430 million. In 2010, the team was valued at about $720 million. Many believe that the Guggenheim group overpaid for the Dodgers. This is despite the estimated $3 to $4 billion media deal the team expects to sign with Time Warner or Fox - or perhaps someone else. The deal hits the open market in 2014. By then, Matt Kemp should have 50 million home runs.
According to Eric Fisher of the SportsBusiness Journal, the Dodgers generated about $240 million in revenue last year, down from $265 million in 2010 and $286 million in 2009.
First order of business for the new ownership group is seeking to maximize revenue and making sure the team is working at top productivity levels.
MLB complained that McCourt used the team to subsidize his personal and lavish lifestyle to the tune of $187 million. In order to fend of MLB's attempts to seize his team, he took the team into the protective shell that is bankruptcy. Once inside the shell, MLB had little power to wrest the team from McCourt - despite its constitution providing that it could (judges in bankruptcy court just want to see creditors get paid - they don't care too much about a league's constitution).
What did the Dodgers buy for McCourt? According to various reports, here’s where some of the Dodger green went:
1) As Dodger CEO, wife Jamie McCourt was paid $2 million a year, while Frank was paid $5 million annually. Here’s where it gets a bit odd. Their 2 kids were each paid $600,000.00 a year. The thing, though, is that one child was attending Stanford, while the other worked full time at Goldman Sachs.
2) After the purchase of the Dodgers, the McCourts bought 4 homes in Los Angeles at cost of around $89 million.
3) They also bought vacation properties and a private jet, had private drivers, a hairdresser who worked exclusively for the McCourts five days a week and a makeup artist.
4) Jamie paid over $100,000.00 to florists.
5) Frank fired his wife as Dodgers’ CEO, claiming that she was having an affair with her driver. However, that didn’t put a damper on spending. Frank spent $30,000.00 a month on a suite at the Beverly Hills hotel.
6) Jamie used one of the homes “exclusively for swimming” and the second to store furniture.
7) Jamie went on a lavish trip to France with her driver.
All this was paid for by the Dodgers.
Dodgers fans are undoubtedly relieved that McCourt is out of the picture and that their iconic franchise can return to respectability. As for McCourt he will go down as an owner that put himself ahead of the team - then forgot he owned a team.