Two Billion for the Dodgers and Magic Johnson’s Group Let McCourt Hold on to the Parking Lots?

All, Baseball, Video Jason McIntyre March 28th. 2012, 10:33am

What an absolute debacle. First, Magic Johnson and his buddies grossly overpay for the Dodgers. It gets worse: The real money in acquiring the Dodgers is in the parking lots – McCourt’s reluctance to part with the parking lots is the reason Mark Cuban never seriously considered purchasing the franchise - and McCourt will keep them, according to LA Weekly:

Frank McCourt will hang on to the Dodger Stadium parking lots through a joint venture with Johnson’s investor group. That means Johnson and his backers are now business partners with McCourt.

This has disaster written all over it. Somewhere, Steve Sax and Fernando Valenzuela are drowning their sorrows in bourbon while Kirk Gibson slips another quarter in the juke box.

Burn, baby, burn!

aroundtheweb

75 Responses to “Two Billion for the Dodgers and Magic Johnson’s Group Let McCourt Hold on to the Parking Lots?”

1
phillymantis915 Says:
March 28th, 2012 at 10:35 AM
First, Magic Johnson and his buddies grossly overpay for the Dodgers.
How is it an overpay? The media rights alone will contribute over $200 million a year. Dodgers up until 2 seasons ago were still the highest attending franchise, and the land which Magic’s group controls around Dodgers stadium is the most prime undeveloped land closest to downtown LA. That land if sold and developed is worth a billion alone.
2
ButtersBC Says:
March 28th, 2012 at 10:37 AM
How is it an overpay?
Because it doesn’t mesh with the writer’s opinion that nobody’s interested in baseball
Considering how well Magic’s done in his post-retirement business ventures I’m going to give him the benefit of the doubt and assume he’ll come out ahead in the end
3
johndewar Says:
March 28th, 2012 at 10:38 AM
I would think Dodger fans should familiarize themselves with the term “debt service”.
4
rittyrich Says:
March 28th, 2012 at 10:39 AM
Two Billion for the Dodgers and Magic Johnson’s Group Let McCourt Hold on to the Parking Lots?
This reads like McCourt has a monopoly on the parking lots and is going to hold stadium attendance hostage by charing $100 to park. It’s a joint venture with the investors. What % of the revenues is McCourt receiving from the lots? What if it’s only nominal?
5
molemaninthemorning Says:
March 28th, 2012 at 10:41 AM
McCourt’s reluctance to part with the parking lots is the reason Mark Cuban never seriously considered purchasing the franchise
Or the fact that Selig has made it clear on several occasions that he will not be allowed to purchase an MLB franchise.
6
molemaninthemorning Says:
March 28th, 2012 at 10:42 AM
Speaking of baseball, Liverpool just announced they’ll be playing at Fenway on July 25th. I would link the story but the link causes the comment to disappear.
Also, seriously, who else has seen the cartoon dog popup?
7
SouvenirCity Says:
March 28th, 2012 at 10:42 AM
I’m not sure there was a more financially suited buyer with a vested interest in the city of Los Angeles than Ervin Johnson. I think the future is very bright in Chavez Ravine.
8
A.P. (artist formerly TJ21) Says:
March 28th, 2012 at 10:42 AM
*checks calendar*
JMac, it’s not September yet. I didn’t think you paid attention to baseball til then….must be a slow Tebow day
9
Jim Harbaugh Scramble Says:
March 28th, 2012 at 10:44 AM
What an absolute debacle.
I’m assuming this links to the Magic Hour on YouTube.
10
sportsgal116 Says:
March 28th, 2012 at 10:44 AM
Speaking of baseball, Liverpool just announced they’ll be playing at Fenway on July 25th.
That sounds like a terrible idea. Soccer on a baseball field? What are they going to do about the dirt?
11
knitty Says:
March 28th, 2012 at 10:45 AM
They are paying all cash and they paid a premium based on the potential to land their own sports channel ala SNY or YES, which are worth more than their respective teams. The parking lots were valued relatively low in the deal $150MM. I wouldnt say this is a losing proposition like you mentioned. There are some very deep pockets behind this deal, unlike McCourt who levered up most of his initial deal.
12
St. Bear Says:
March 28th, 2012 at 10:45 AM
Burn, baby, burn!
I don’t get it.
13
SouvenirCity Says:
March 28th, 2012 at 10:45 AM
Surprised that this wasn’t a diatribe about MLB not televising the season opener in Japan this morning. You’d be at least somewhat justified in writing about that.
MLBAM picked it up though. I watched Brandon League nearly take one IN THE FAAAAAAAAAAAAACE on my phone while walking to the train this morning. Good to have you back, baseball. Missed you.
14
phillymantis915 Says:
March 28th, 2012 at 10:46 AM
I would think Dodger fans should familiarize themselves with the term “debt service”.
Yeah, debt service is taken care of pretty quick when Time Warner or Fox Sports pays $200 million to air the Dodgers. And then add in Guggenheim’s CEO (who is worth quite a bit of $$$), and the other members of the group, and they have plenty of cash to invest.
15
angry Says:
March 28th, 2012 at 10:46 AM
This has disaster written all over it.
No trying to start shit, but why? Please provide the specifics of why this will be a disaster.
First, Magic Johnson and his buddies grossly overpay for the Dodgers.
Link? What should they have paid? What do other say they should have paid?
16
BFFredo Says:
March 28th, 2012 at 10:46 AM
First, Magic Johnson and his buddies grossly overpay for the Dodgers.
One of the biggest, most popular franchises in all of sports — a name that people around the world recognize — located in one of the biggest media markets in the world. And it involves just about everything but the parking lots.
Now I’ll grant you, not getting the parking lots is not good. That’s millions of dollars in revenue that’s going into McCourt’s greedy-ass pockets and not back into the franchise. (To say nothing of the fact that the Dodgers are well and truly rid of his ass).
That said, I wonder what the other offer from Stan Kroenke’s group was all like. Was he underbidding? Or was he less willing to make any sort of deal with McCourt?
Now Frank McCourt gets to keep playing the villain when people get charged $30 for parking.
17
Tim Ryan Says:
March 28th, 2012 at 10:47 AM
McCourt plans to employ a program for each parking space that will be very similar to personal seat licenses.
18
rittyrich Says:
March 28th, 2012 at 10:47 AM
According to L.A. Times scribe Bill Shaikin, Johnson’s group will have a “veto” over McCourt’s development plans. Whatever their agreement, they should get their lawyers to lay it out in painstaking detail, because the chances are good that a judge will have to interpret it at some point.
Not mentioned in the blog – the veto power. And I guess people think these investors are complete freaking morons not to have this stuff drawn out in painstaking details via contracts, etc.? Here’s $2 billion. You want some of the parking lots? Yeah, let’s shake on it and call it good.
19
arkbadger Says:
March 28th, 2012 at 10:47 AM
Because it doesn’t mesh with the writer’s opinion that nobody’s interested in baseball
solid opinion bud.
20
johndewar Says:
March 28th, 2012 at 10:48 AM
Yeah, debt service is taken care of pretty quick when Time Warner or Fox Sports pays $200 million to air the Dodgers. And then add in Guggenheim’s CEO (who is worth quite a bit of $$$), and the other members of the group, and they have plenty of cash to invest.
Good points, but having it and investing are two different conversations.
And I don’t know if I’d go so far as to say they overpaid, but let’s not deny this is a significant amount of money.
I can’t help but wonder what the Yankees would fetch in a similar auction.
21
molemaninthemorning Says:
March 28th, 2012 at 10:48 AM
That sounds like a terrible idea. Soccer on a baseball field? What are they going to do about the dirt?
… they’ve done it before.
22
phillymantis915 Says:
March 28th, 2012 at 10:49 AM
Link? What should they have paid? What do other say they should have paid?
Yes, please provide math as to how this is an overpay. If the Yankees sold today, they would be worth $3.5-$4 billion. Is that overvalued? That’s the thing, MLB teams control their media rights in their homemarkets, unlike NFL teams. That is where the majority of teams are able to monetize their full worth. The Phillies have their media rights due in 2015. Seeing that they’re the highest watched local team, they could easily get $300-$400 mil a year from Comcast.
23
VladimirCrouton Says:
March 28th, 2012 at 10:49 AM
Now Frank McCourt gets to keep playing the villain when people get charged $30 for parking.
How much do you think Dodger dogs and beer will be now?
24
arkbadger Says:
March 28th, 2012 at 10:49 AM
Surprised that this wasn’t a diatribe about MLB not televising the season opener in Japan this morning.
what was the fucking deal with that? I got back from my run at 6 and expected to see some baseball. was there a reason given why they tape delayed it? what fucking year is this?
25
knitty Says:
March 28th, 2012 at 10:49 AM
BFFredo from the WSJ:
The person said the other offers, which were perceived as opening bids, were in the range of $1.5 billion, some 25% less than the Johnson-Walter bid. As a result, the other bidders were never given a chance to match, and the deal was wrapped up by Tuesday evening.
Sounds like because they were so low compared to Magic and Guggenheim the auction ended.
26
BFFredo Says:
March 28th, 2012 at 10:50 AM
Surprised that this wasn’t a diatribe about MLB not televising the season opener in Japan this morning.
Kinda surprised MLB Network didn’t have it live. That should be right up their alley.
27
SouvenirCity Says:
March 28th, 2012 at 10:50 AM
Now that the Cubs have competent ownership and solid baseball people in the front office, the Dodgers were the one big worry I had in the National League in terms of competition with the deepest pockets. The Mets are still years away from digging out of the scandal years. The Phillies are going to be into their decline by the time the Cubs are any good again. The Dodgers have Kemp, Kershaw and now a decent owner. Be interesting to see if they retain Coletti or put their own guy in charge.
28
johndewar Says:
March 28th, 2012 at 10:50 AM
McCourt plans to employ a program for each parking space that will be very similar to personal seat licenses.
With the direction of sports economics nowadays, I’m not totally sure if you are joking or not.
29
Coach Mike Woodson, Atlanta Hawks Says:
March 28th, 2012 at 10:50 AM
First, Magic Johnson and his buddies grossly overpay for the Dodgers.
How much are the Dodgers worth? Please show your work.
30
MP Says:
March 28th, 2012 at 10:51 AM
Speaking of baseball, Liverpool just announced they’ll be playing at Fenway on July 25th.
That sounds like a terrible idea. Soccer on a baseball field? What are they going to do about the dirt?
Not nearly as bad as the Winter Classic: those guys had to skate on grass!
31
Matty_Cam Says:
March 28th, 2012 at 10:51 AM
when people get charged $30 for parking.
Fuck. This. You can probably get a bleacher ticket for cheaper than that.
32
VladimirCrouton Says:
March 28th, 2012 at 10:51 AM
How much do the Dodgers still owe Manny?
33
A.P. (artist formerly TJ21) Says:
March 28th, 2012 at 10:51 AM
Liverpool playing at fenway is only worthwhile if that bitch Suarez tears up his knee
34
SouvenirCity Says:
March 28th, 2012 at 10:53 AM
what was the fucking deal with that?
They just wanted to air it when they felt people that would watch were awake. I had my alarm set for 5 AM and I watched the first 3 innings on my laptop. Then I crawled back into bed and put the Oakland radio guys on my phone. I watched or heard every inning live.
35
St. Bear Says:
March 28th, 2012 at 10:53 AM
Yes, please provide math as to how this is an overpay. If the Yankees sold today, they would be worth $3.5-$4 billion. Is that overvalued? That’s the thing, MLB teams control their media rights in their homemarkets, unlike NFL teams. That is where the majority of teams are able to monetize their full worth. The Phillies have their media rights due in 2015. Seeing that they’re the highest watched local team, they could easily get $300-$400 mil a year from Comcast.
I was reading the SI article about Pujols while getting ass raped by my mechanic. There was a great quote from Moreno that he was willing to up his deal to get Pujols because he knows that in 2014, his TV deal goes up substantially, so he’s not as concerned about paying $30M for a 42 year old going on 45.
36
Matty_Cam Says:
March 28th, 2012 at 10:53 AM
Liverpool playing at fenway
If a football field could barely fit at Wrigley, how in the hell is a soccer pitch going to be able to fit in Fenway?
37
SouvenirCity Says:
March 28th, 2012 at 10:54 AM
I was reading the SI article about Pujols while getting ass raped by my mechanic.
Gonna be a lot of coop jokes here.
38
payaso Says:
March 28th, 2012 at 10:54 AM
That’s millions of dollars in revenue that’s going into McCourt’s greedy-ass pockets and not back into the franchise.
from the link:
Frank McCourt will hang on to the Dodger Stadium parking lots through a joint venture with Johnson’s investor group.
39
knitty Says:
March 28th, 2012 at 10:55 AM
Plus they are paying a premium in the hopes that they’ll sell off again in 10 years at double/triple of what they paid for…
40
mizerle06 is mcintyred of all the trollin' Says:
March 28th, 2012 at 10:55 AM
phillymantis – the Guggenheim CEO guy is a Walton-in-law, right? he’s got deeeeeeeeeep pockets.
Magic Johnson and his buddies grossly overpay for the Dodgers.
define “grossly”. I’ll wait.
41
molemaninthemorning Says:
March 28th, 2012 at 10:55 AM
If a football field could barely fit at Wrigley, how in the hell is a soccer pitch going to be able to fit in Fenway?
Click the link with the picture of when they did it two years ago and was a massive success.
42
molemaninthemorning Says:
March 28th, 2012 at 10:57 AM
I know the Dodgers were tied up in litigation with FOX over their deal, but what’s the status? It’s up after next season?
43
Coach Mike Woodson, Atlanta Hawks Says:
March 28th, 2012 at 10:58 AM
Just because McCourt was “desperate” doesn’t mean he wouldn’t get full value for the team.
44
HawkEye Says:
March 28th, 2012 at 10:59 AM
How much are the Dodgers worth? Please show your work
/looks at price paid
//I think the Dodgers are worth just about $2 billion
45
St. Bear Says:
March 28th, 2012 at 10:59 AM
Found it:
The economics did not scare him, Moreno says, because his club carried no debt, had drawn three million fans for nine consecutive seasons, had no players signed past 2015 other than ace Jered Weaver and had backloaded its local TV deal to run between $10 million and $20 million above its $50 million annual average. Also, unbeknownst to almost everyone, for nearly a year Moreno had known he had a handshake agreement with Fox Sports that would triple his TV haul, to $150 million a year, beginning in 2014.
46
BFFredo Says:
March 28th, 2012 at 11:00 AM
How much do you think Dodger dogs and beer will be now?
$77 and $53 or both for $110.
The person said the other offers, which were perceived as opening bids, were in the range of $1.5 billion, some 25% less than the Johnson-Walter bid. As a result, the other bidders were never given a chance to match, and the deal was wrapped up by Tuesday evening.
Sounds like because they were so low compared to Magic and Guggenheim the auction ended.

Thanks.
Sounds like Magic’s group took the tactic of an early, strong bid that would blow other offers away. Tough to argue against it if it works.
47
johndewar Says:
March 28th, 2012 at 11:00 AM
Just because McCourt was “desperate” doesn’t mean he wouldn’t get full value for the team.
Agreed.
The scarcity of the asset McCourt was selling obviously played a part. It’s not like he was a normal schmoe and underwater on his mortgage.
48
SouvenirCity Says:
March 28th, 2012 at 11:02 AM
One week til games in the states. Who all is going to their team’s home opener?
/raises hand
49
Matty_Cam Says:
March 28th, 2012 at 11:02 AM
Click the link with the picture of when they did it two years ago and was a massive success.
Thank you sir. That looks quite bad ass.
50
VladimirCrouton Says:
March 28th, 2012 at 11:02 AM
When do the Dodgers have to pay Kemp and Kershaw long-term? That will cost another 300 million.
51
SouvenirCity Says:
March 28th, 2012 at 11:04 AM
Kemp is locked in, Vlad. Kershaw is up after the 2013 season.
2012 27 Los Angeles Dodgers $10,000,000
2013 28 Los Angeles Dodgers $20,000,000
2014 29 Los Angeles Dodgers $21,000,000
2015 30 Los Angeles Dodgers $21,000,000
2016 31 Los Angeles Dodgers $21,500,000
2017 32 Los Angeles Dodgers $21,500,000
2018 33 Los Angeles Dodgers $21,500,000
2019 34 Los Angeles Dodgers $21,500,000
52
phillymantis915 Says:
March 28th, 2012 at 11:04 AM
When do the Dodgers have to pay Kemp and Kershaw long-term? That will cost another 300 million.
They already signed Kemp to an 8/160 deal. Kershaw will definitely be next. Wouldn’t surprise me if they went after Cain, Hamels, Napoli, Miguel Montero hard this offseason and Votto in 2013.
53
RexKramerDangerSeeker Says:
March 28th, 2012 at 11:04 AM
Burn, baby, burn!
We would also have accepted “BOOM!”.
54
cracker jack Says:
March 28th, 2012 at 11:06 AM
Surprised that this wasn’t a diatribe about MLB not televising the season opener in Japan this morning. You’d be at least somewhat justified in writing about that.
Gotta be honest, I turned the TV on this morning when I got up and expected the game to be on ESPN 2 like it was before. Then I just assumed it was on MLB network. Then I found out it was on tape delay! Dear Lord, that’s just an epic fail.
55
AMalz7 Says:
March 28th, 2012 at 11:06 AM
There’s a reason McIntyre is not a banker
56
SouvenirCity Says:
March 28th, 2012 at 11:06 AM
Votto in 2013.
I really, really, really want him to sign in Texas. Can you imagine him in that yard with the talent in that offense?
/fantasy owner
57
St. Bear Says:
March 28th, 2012 at 11:08 AM
There’s a reason McIntyre is not a banker
But his wife did take an econ class in college, so that’s basically the same thing.
/obscure throwback half-meme
58
phillymantis915 Says:
March 28th, 2012 at 11:09 AM
I really, really, really want him to sign in Texas. Can you imagine him in that yard with the talent in that offense?
He would also be very very good in Toronto. A middle of the lineup with Bautista-Votto-Lawrie-Rasmus?
59
Matty_Cam Says:
March 28th, 2012 at 11:11 AM
I really, really, really want him to sign in Texas. Can you imagine him in that yard with the talent in that offense?
And I really, really, really want him to stay in Cincinnati. He already plays in a pretty nice hitters park and without a lot of pressure or fan fare.
/Reds fan
//He’s all we’ve got
///Not sold on Aroldis as a starter just yet
60
SouvenirCity Says:
March 28th, 2012 at 11:13 AM
I’m also a Cubs fan, Matty. It’s part of my reasoning in wanting him out of Cincy. He’s your best player, no doubt. The bidding war for his services will be intense. He’ll be turning 30 when he signs that contract. If Prince Fielder can get 9 years and 200+ million, Votto should expect that and then some.
61
Geeezeus Says:
March 28th, 2012 at 11:14 AM
He would also be very very good in Toronto. A middle of the lineup with Bautista-Votto-Lawrie-Rasmus?
/dances the Charleston
62
SouvenirCity Says:
March 28th, 2012 at 11:15 AM
The Jays would make a ton of sense, mantis. He’s a Canadian. Already won the Lou Marsh award once. That’d be a home run signing for the Jays. Even if he’d be one of their older star players at that point.
63
Coach Mike Woodson, Atlanta Hawks Says:
March 28th, 2012 at 11:19 AM
Jason, did you read the article you cited? Be honest.
Do you know what a joint venture is? Be honest.
64
mizerle06 is mcintyred of all the trollin' Says:
March 28th, 2012 at 11:21 AM
Magic Johnson and his buddies grossly overpay for the Dodgers.
define “grossly”. I’ll wait.
dammit. I’ve been waiting for 26 minutes here! the service here sucks. can I at least get a refill and some more bread?
65
Seven Different Kinds Of WhatHaveYa Says:
March 28th, 2012 at 11:28 AM
Sounds like Magic’s group took the tactic of an early, strong bid that would blow other offers away.
worked for the cubs when they signed soriano
66
jthussler Says:
March 28th, 2012 at 11:30 AM
While TBL is a moron, I do agree that the Dodgers are a hot fucking mess.
67
kaiserwilhelmreems Says:
March 28th, 2012 at 11:30 AM
There’s a reason McIntyre is not a banker
buy gold, guns and food, that’s all you need to know for this economy
/JMac’d circa 2009 food riots
68
timebomb451 Says:
March 28th, 2012 at 11:32 AM
As a lifelong dodger fan, today is a great day even with the parking lot situation a little cloudy. Can’t wait to sign/trade for some solid talent. With that being said, TBL is a modern day Buzz Killington. No substance from his hater post….how about them mets, chump?
69
spencer096 Says:
March 28th, 2012 at 11:34 AM
Do you know what a joint venture is? Be honest.
yea man…it’s like, when you take a nature walk and cheef a spliff, man.
70
Clayton Cargill Says:
March 28th, 2012 at 11:38 AM
But his wife did take an econ class in college, so that’s basically the same thing.
/obscure throwback half-meme
that is a great throwback
71
payaso Says:
March 28th, 2012 at 11:41 AM
No substance from his hater post….how about them mets, chump?
TBL is a Red Sox fan tho.
/even throwbacker meme
72
jdeeser5 Says:
March 28th, 2012 at 12:26 PM
I think the group saw the potential of the Dodgers becoming instantly successful within free agency and with their development system. I think the Angels took a shot on Pujols and the Giants are freaking out about possibly Matt Cain hitting the market. The Spankees, Sox, Cubs, Rangers, and Angels just go another team that will compete finacially with them but also is a wanted landing spot for many players.
73
PGLC Says:
March 28th, 2012 at 1:32 PM
There will be no way that Magic will live long enough to see a profit from this business venture. This was surely a back-door financial transaction that would allow McCourt to retain silent ownership after the divorce.
74
jdeeser5 Says:
March 28th, 2012 at 2:13 PM
Forbes magazine listed the value of the Dodger franchise as $1.4 billion, 2nd, behind the Spankees who are valued at 1.85 billion.
75
countolaf Says:
March 28th, 2012 at 2:30 PM
How much do the Dodgers still owe Manny?
A million a year for several years. Well, that was what the initial contract was. Someone once told me that they got off the hook when they traded Manny to the White Sox, that they also fronted him some money as part of the trade with Chicago.