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OFFICIAL 2012 LOS ANGELES DODGERS THREAD : 68-58 Dodgers/BoSox complete minimal trade
- Thread in 'Sports & Training' Thread starter Started by cincoseisdos,
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Per Buster Olney:
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Magic Johnson and his group are all successful business men so I'm sure they know what they're doing paying that much money for the team.
They all have crazy paper, I can only imagine them putting their money at the center of a table and paying $2 billion in cash.
They all have crazy paper, I can only imagine them putting their money at the center of a table and paying $2 billion in cash.
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POWER MOVES.
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A lot of the financial analysts are poo pooing this deal. The business model based on the 2b price just doesn't add up. Great article from ESPN.com here. Posted the story below.
LOS ANGELES -- While Los Angeles sports fans celebrate the sale of the Los Angeles Dodgers to a group headlined by Magic Johnson for a record price of $2 billion, several sport economists believe the group paid close to twice as much for the team than it is actually worth and question the viability of the deal.
"It was an extraordinary and surprising price," said Andrew Zimbalist, a professor of economics at Smith College. "I rarely admit to not anticipating these things but I did not anticipate a $2 billion price. Keep in mind, in addition to the price, the new ownership group will have to invest something in the neighborhood of $300 million to refurbishing Dodger Stadium and that price does not include $150 million for the surrounding real estate. At the end of the day, you have to question this deal."
Prior to the sale, many economists believed the price tag of the Dodgers would surpass the $845 million the Chicago Cubs sold for in 2009, which was the most ever for an MLB team. Most figured it would be around the $1.1 billion figure the Miami Dolphins fetched three years ago, which was a record price for a professional sports team in North America. In the end, the sale of the Dodgers shattered both marks and set a world record, surpassing even the $1.47 billion Manchester United went for in 2005.
"It's the craziest deal ever; it makes no sense. That's why you saw so many groups drop out," said Mark Rosentraub, a University of Michigan sports management professor. "I don't get it. The numbers just don't work. It doesn't make business sense. Nobody came up with this number. Under the most favorable circumstance you broke $1.1 billion with $1.4 billion getting crazy. Now you're up in the $2 billion range, which is over $800 million more than what pencils out for a profitable investment for a baseball team. If making money doesn't count, this is a great move. But now we're into buying art and I can't value art. I can just run the model numbers and this doesn't make sense."
One of the biggest reasons the Dodgers sold for $2 billion is the regional sports network battle currently being waged in Los Angeles between Fox and Time Warner. Last June, commissioner Bud Selig rejected a proposed 20-year, $3 billion deal between the Dodgers and Fox. The decision, according to Dodgers owner Frank McCourt, pushed the team into bankruptcy and forced him to sell the team. Last December, the Angels agreed to a new deal with Fox worth at least $3 billion over 20 years, which helped the team land Albert Pujols and C.J. Wilson in free agency. Last year, the Lakers announced they would be leaving Fox to join Time Warner for a deal reportedly worth $5 billion over 25 years.
The Dodgers are expected to sign a similarly lucrative deal with Fox or Time Warner, or they could simply start their own regional sports network like the Yankees have with the YES Network. The problem economists have with the sale of the team being tied to the television contract is teams use their television deals as revenue to improve the team, not to offset the costs of overpaying for a franchise.
"One of the things that commissioner Selig was trying to avoid when he did not authorize the contract between McCourt and Fox was he thought McCourt would take the money and pocket it instead of using it to build the Dodgers," Zimbalist said. "That indirectly will happen anyway because McCourt is going to get his money and the new ownership will have to use a good chunk of the television money to pay off their asset purchase."
Unlike the Angels and the Texas Rangers, who signed a similar 20-year, $3 billion deal with Fox, the Dodgers' new television deal won't simply be a nice influx of cash used to upgrade the roster. It will likely be used to pay for the team, pay for improvements to the stadium and pay for developing the land surrounding the stadium.
"If you take the Fox deal or try to start your own network that's going to eat down your capital cost and you've just lost a huge share of revenue," Rosentraub said. "That's a source of revenue that other teams depend on and that's the issue. The Texas Rangers are swimming in cash and the Angels are swimming in cash because they didn't have these huge capital costs and their TV income is coming into the general operating fund. Well, you're not going to get that with the Dodgers. Not only that but you have problems with the stadium and have to make a significant investment in improving it. That's something the Angels and Rangers don't have to do. Then you have the parking and land surrounding it where you now have a partner in McCourt, who is at best, well, unpredictable. Sounds like a great deal, doesn't it?"
One of the biggest problems economists had with the deal was that McCourt would still control half of the land surrounding Dodger Stadium, including its parking lots, and would be involved with potential real estate projects on the property in the future. Considering many Dodgers fans refused to go to games last year because they did not want to give McCourt their money, the new ownership's inability to completely cut ties with him was viewed as a failure.
"I still don't understand how you could pay $2 billion for the Dodgers and not get the clear title to the Chavez Ravine land," Rosentraub said. "Look at everybody who has ever been a partner with McCourt. I think they would tell you to get stock in Gaviscon because you're going to need it. Maybe he'll have a life-changing experience but you have a guy with a track record of getting into legal action with his partners on deals going back more than a decade. You may end up spending a great deal of time in court and paying legal fees against your new partner. I don't get that one. I know people who backed out of the deal because they didn't want any kind of partnership with him."
"It's problematic," Zimbalist said. "He was looking for some kind of ongoing income stream and he got it. Here's a guy who borrowed practically all the money to buy the team for $430 million and now he's selling it for $2.15 billion and he's coming out with a healthy capital gain -- it's repulsive. This is someone who doesn't deserve to walk away with a healthy profit after eight years of running the Dodgers in the most egregious, the most inefficient, the most self-interested, and the most vainglorious, idiotic way possible. It really is repulsive that he will still be making a profit in some way."
Perhaps the best thing the new ownership group has going for it is that Magic Johnson will become the new face of the franchise. While Johnson will be a minority owner and Mark Walter, chief executive officer of the financial services firm Guggenheim Partners, will become the controlling owner, Johnson's face on the team will help revitalize the image of the team after it was soiled under McCourt in recent years.
"I think Magic will help revive the brand in Los Angeles. He has deep connections with sports fans in this town," said David Carter, a sports marketing consultant and executive director of the USC Sports Business Institute. "He will play a huge role as the public face of the team. It changes the perception of the team and fans have to believe that perception will become reality. His track record of being involved in the community, his track record of being able to do well with the media and his understanding of what makes L.A. tick is going to be important."
Johnson, however, still can't make all the numbers of the record sale of the team add up for many economists, who are skeptical that this deal will prove to be a success in the end.
"If they can figure out a way to put a basket above the pitcher's mound maybe it will be a great match," Zimbalist said. "Look, Magic is an icon in L.A. It creates a new energy that will be positive for the club, but this group has a big challenge ahead of them and it remains to be seen if the price they paid for the club was a good choice or not."
LOS ANGELES -- While Los Angeles sports fans celebrate the sale of the Los Angeles Dodgers to a group headlined by Magic Johnson for a record price of $2 billion, several sport economists believe the group paid close to twice as much for the team than it is actually worth and question the viability of the deal.
"It was an extraordinary and surprising price," said Andrew Zimbalist, a professor of economics at Smith College. "I rarely admit to not anticipating these things but I did not anticipate a $2 billion price. Keep in mind, in addition to the price, the new ownership group will have to invest something in the neighborhood of $300 million to refurbishing Dodger Stadium and that price does not include $150 million for the surrounding real estate. At the end of the day, you have to question this deal."
Prior to the sale, many economists believed the price tag of the Dodgers would surpass the $845 million the Chicago Cubs sold for in 2009, which was the most ever for an MLB team. Most figured it would be around the $1.1 billion figure the Miami Dolphins fetched three years ago, which was a record price for a professional sports team in North America. In the end, the sale of the Dodgers shattered both marks and set a world record, surpassing even the $1.47 billion Manchester United went for in 2005.
"It's the craziest deal ever; it makes no sense. That's why you saw so many groups drop out," said Mark Rosentraub, a University of Michigan sports management professor. "I don't get it. The numbers just don't work. It doesn't make business sense. Nobody came up with this number. Under the most favorable circumstance you broke $1.1 billion with $1.4 billion getting crazy. Now you're up in the $2 billion range, which is over $800 million more than what pencils out for a profitable investment for a baseball team. If making money doesn't count, this is a great move. But now we're into buying art and I can't value art. I can just run the model numbers and this doesn't make sense."
One of the biggest reasons the Dodgers sold for $2 billion is the regional sports network battle currently being waged in Los Angeles between Fox and Time Warner. Last June, commissioner Bud Selig rejected a proposed 20-year, $3 billion deal between the Dodgers and Fox. The decision, according to Dodgers owner Frank McCourt, pushed the team into bankruptcy and forced him to sell the team. Last December, the Angels agreed to a new deal with Fox worth at least $3 billion over 20 years, which helped the team land Albert Pujols and C.J. Wilson in free agency. Last year, the Lakers announced they would be leaving Fox to join Time Warner for a deal reportedly worth $5 billion over 25 years.
The Dodgers are expected to sign a similarly lucrative deal with Fox or Time Warner, or they could simply start their own regional sports network like the Yankees have with the YES Network. The problem economists have with the sale of the team being tied to the television contract is teams use their television deals as revenue to improve the team, not to offset the costs of overpaying for a franchise.
"One of the things that commissioner Selig was trying to avoid when he did not authorize the contract between McCourt and Fox was he thought McCourt would take the money and pocket it instead of using it to build the Dodgers," Zimbalist said. "That indirectly will happen anyway because McCourt is going to get his money and the new ownership will have to use a good chunk of the television money to pay off their asset purchase."
Unlike the Angels and the Texas Rangers, who signed a similar 20-year, $3 billion deal with Fox, the Dodgers' new television deal won't simply be a nice influx of cash used to upgrade the roster. It will likely be used to pay for the team, pay for improvements to the stadium and pay for developing the land surrounding the stadium.
"If you take the Fox deal or try to start your own network that's going to eat down your capital cost and you've just lost a huge share of revenue," Rosentraub said. "That's a source of revenue that other teams depend on and that's the issue. The Texas Rangers are swimming in cash and the Angels are swimming in cash because they didn't have these huge capital costs and their TV income is coming into the general operating fund. Well, you're not going to get that with the Dodgers. Not only that but you have problems with the stadium and have to make a significant investment in improving it. That's something the Angels and Rangers don't have to do. Then you have the parking and land surrounding it where you now have a partner in McCourt, who is at best, well, unpredictable. Sounds like a great deal, doesn't it?"
One of the biggest problems economists had with the deal was that McCourt would still control half of the land surrounding Dodger Stadium, including its parking lots, and would be involved with potential real estate projects on the property in the future. Considering many Dodgers fans refused to go to games last year because they did not want to give McCourt their money, the new ownership's inability to completely cut ties with him was viewed as a failure.
"I still don't understand how you could pay $2 billion for the Dodgers and not get the clear title to the Chavez Ravine land," Rosentraub said. "Look at everybody who has ever been a partner with McCourt. I think they would tell you to get stock in Gaviscon because you're going to need it. Maybe he'll have a life-changing experience but you have a guy with a track record of getting into legal action with his partners on deals going back more than a decade. You may end up spending a great deal of time in court and paying legal fees against your new partner. I don't get that one. I know people who backed out of the deal because they didn't want any kind of partnership with him."
"It's problematic," Zimbalist said. "He was looking for some kind of ongoing income stream and he got it. Here's a guy who borrowed practically all the money to buy the team for $430 million and now he's selling it for $2.15 billion and he's coming out with a healthy capital gain -- it's repulsive. This is someone who doesn't deserve to walk away with a healthy profit after eight years of running the Dodgers in the most egregious, the most inefficient, the most self-interested, and the most vainglorious, idiotic way possible. It really is repulsive that he will still be making a profit in some way."
Perhaps the best thing the new ownership group has going for it is that Magic Johnson will become the new face of the franchise. While Johnson will be a minority owner and Mark Walter, chief executive officer of the financial services firm Guggenheim Partners, will become the controlling owner, Johnson's face on the team will help revitalize the image of the team after it was soiled under McCourt in recent years.
"I think Magic will help revive the brand in Los Angeles. He has deep connections with sports fans in this town," said David Carter, a sports marketing consultant and executive director of the USC Sports Business Institute. "He will play a huge role as the public face of the team. It changes the perception of the team and fans have to believe that perception will become reality. His track record of being involved in the community, his track record of being able to do well with the media and his understanding of what makes L.A. tick is going to be important."
Johnson, however, still can't make all the numbers of the record sale of the team add up for many economists, who are skeptical that this deal will prove to be a success in the end.
"If they can figure out a way to put a basket above the pitcher's mound maybe it will be a great match," Zimbalist said. "Look, Magic is an icon in L.A. It creates a new energy that will be positive for the club, but this group has a big challenge ahead of them and it remains to be seen if the price they paid for the club was a good choice or not."
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^ it doesn't make sense..
i mean if it is true that they outbid the next highest bidder by 700 mill, then something is seriously wrong.. or they know something the rest of the world doesnt
i mean if it is true that they outbid the next highest bidder by 700 mill, then something is seriously wrong.. or they know something the rest of the world doesnt
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People are talking about the TV money but that's dough they spread out over 20-25 years. The Angels TV deal that was just signed covered 20 years. Also, like the article points out, the stadium & surrounding area needs a major overhaul (the least of which is beefed up security). Then they need to add players, at least another hitter. Prince Fielder would've been great but I guess they couldn't go after him because of the impending sale of the team. I just don't see how they're going to turn a profit. I guess Mark Walter from Guggenheim has money to burn....
With that said, I hope to see the Dodger do well. Great team with great history & the one of the most classic unis/team colors in all of sports.
With that said, I hope to see the Dodger do well. Great team with great history & the one of the most classic unis/team colors in all of sports.
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Was able to score good seats for opening day, in the loge section, 3rd base side!
I don't about you guys, but I always tend to go after tickets on the 3rd base side, been that way for years. I prefer it.
I don't about you guys, but I always tend to go after tickets on the 3rd base side, been that way for years. I prefer it.
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^Baseline loge is my hands down favorite, I love watching the pitches curve and what not. Plus to me field level is too low loge is best for watching the game, field level for autographs etc.
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Feel the same way.
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I've been saying this since I heard of the deal. They must know something we don't know or must have wanted to own a team BAD.The report I saw said that they bid 500 mil more than the next highest bidder. That @$*$ is absurd to me, but they must know something we don't
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Someone tweeted earlier: "Only person who must understand this purchase would be George"
The joint venture between the ownership group led by Magic Johnson and soon-to-be former Los Angeles Dodgers owner Frank McCourt for land around Dodger Stadium will not allow McCourt to reap any profits from parking revenue, according to three sources with knowledge of the situation.
The new ownership group, which entered into a $2.15 billion deal to purchase the Dodgers on Tuesday night, has control over the parking lots and land around the stadium. McCourt, the sources said, is only in line to see future profit from the land if it is developed in the future. However, according to two sources, there is no plan for development in the near future.
In other words, when Dodger fans park their cars at Dodger Stadium, all of that money will go back to the team, not McCourt.
"Frank's not involved in the team, baseball, any of that," Mark Walter, CEO of Guggenheim Partners (who will become the controlling owner of the Dodgers once it is final and baseball's owners officially approve it), told ESPNLosAngeles.com on Wednesday.
"What Frank does have is an economic interest in land, but we control the parking and all the fan experience and that's of the utmost importance to us," Walter said.
The new ownership group paid McCourt $150 million for the land around Dodger Stadium, which contains the parking lots, and the right to control it. McCourt also received a share valued at $150 million to retain some of the land rights, but those rights are controlled by the new ownership group.
The land around the stadium was not part of the initial sale offering because it was held by one of McCourt's companies that did not seek bankruptcy protection.
The joint venture between the ownership group led by Magic Johnson and soon-to-be former Los Angeles Dodgers owner Frank McCourt for land around Dodger Stadium will not allow McCourt to reap any profits from parking revenue, according to three sources with knowledge of the situation.
The new ownership group, which entered into a $2.15 billion deal to purchase the Dodgers on Tuesday night, has control over the parking lots and land around the stadium. McCourt, the sources said, is only in line to see future profit from the land if it is developed in the future. However, according to two sources, there is no plan for development in the near future.
In other words, when Dodger fans park their cars at Dodger Stadium, all of that money will go back to the team, not McCourt.
"Frank's not involved in the team, baseball, any of that," Mark Walter, CEO of Guggenheim Partners (who will become the controlling owner of the Dodgers once it is final and baseball's owners officially approve it), told ESPNLosAngeles.com on Wednesday.
"What Frank does have is an economic interest in land, but we control the parking and all the fan experience and that's of the utmost importance to us," Walter said.
The new ownership group paid McCourt $150 million for the land around Dodger Stadium, which contains the parking lots, and the right to control it. McCourt also received a share valued at $150 million to retain some of the land rights, but those rights are controlled by the new ownership group.
The land around the stadium was not part of the initial sale offering because it was held by one of McCourt's companies that did not seek bankruptcy protection.
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i just hope they didnt spend all that money buying the team and then dont have enough to upgrade this bum %#@ stadium and money to spend on FA and scouting
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I may be reaching but there's tons of space to build a new Stadium in the same lot. Make it happen Magic.
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They would not have the dough to build a new stadium, the plan would be to enhance the current one which is projected to cost $200-$300 million.
So the Dodgers do have the control over parking then? But McCourt has the ability to build and improve upon that land over time? Am I reading that correctly?
And what the hell is going on in LA? Angels, Lakers and soon the Dodgers all get TV contracts of 3, 5, and 3 billion?
Are cable prices tripling down there or what the %#%!? Where is all that money coming from, for the cable companies to be able to pay that much out?
Congrats on the sale tho. Is there a list of buyers involved with Magic? And what the money break down for each of them is?
And what the hell is going on in LA? Angels, Lakers and soon the Dodgers all get TV contracts of 3, 5, and 3 billion?
Congrats on the sale tho. Is there a list of buyers involved with Magic? And what the money break down for each of them is?
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The new ownership has control & all revenue from the parking lot/surrounding area to the stadium but McCourt gets a cut of any developement that occurs on the land surrounding the stadium. They currently don't have plans for any developement though...Originally Posted by CP1708
So the Dodgers do have the control over parking then? But McCourt has the ability to build and improve upon that land over time? Am I reading that correctly?
And what the hell is going on in LA? Angels, Lakers and soon the Dodgers all get TV contracts of 3, 5, and 3 billion?Are cable prices tripling down there or what the %#%!? Where is all that money coming from, for the cable companies to be able to pay that much out?
Congrats on the sale tho. Is there a list of buyers involved with Magic? And what the money break down for each of them is?
The actual dough from the sale is coming from Mark Walter CEO of Guggenheim Partners (an investment firm). I don't know the exact share. Not even sure that info's been released yet but safe to say most of it's coming from Walter. He'll be the managing/controlling partner. Stan Kasten who used to be president of the Braves & Nationals will run baseball operations.
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Did Ironman cry during last nights McC/Staff meeting?
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WHY would Kasten say he wants somebody like LaRussa? DO NOT WANT!!!
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We still have Uribe forgot about him
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LMAO Uribe.
Ned gotta go
Ned gotta go
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YOUNG BLOOD TO REPLACE HIM PLEASE!!
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