A bid for the Los Angeles Dodgers has gained unexpected momentum -- and more credibility -- as billionaire Eli Broad agreed to join a $600-million pitch for the team, its Chavez Ravine stadium and its cable TV home, sources close to the situation said Friday.
The 69-year-old business mogul and philanthropist becomes the first local figure to throw his support behind New York sports executive David Checketts' efforts to put together a financing group, which includes two other equity investors as well as at least two East Coast lenders.
It was not immediately clear Friday how much money Broad has agreed to put toward the bid or whether Dodger owner News Corp. will go for the deal. A sticking point could be Checketts' demands to take control of Fox Sports Net 2 as well as manage its sister station, Fox Sports West. With the Dodgers losing money, Fox Sports Net 2 is seen by many as the more lucrative asset.
Sources close to the situation say that by bringing Broad on board, Checketts has the funding he needs to make a formal offer. Major League Baseball requires financial documentation from all potential investors before any group can begin reviewing a team's financial records, and Broad was expected to meet that requirement Friday, according to baseball officials and other sources.
This is not Broad's first foray into sports. He was involved in a failed initiative to attract a National Football League franchise to the city.
Broad made his first fortune in real estate by helping to turn Kaufman & Broad Corp. -- now KB Home Corp. -- into the nation's fifth-largest home builder. More recently, he has been a leading visionary in the revival of downtown Los Angeles.
His involvement is sure to heighten speculation that a grander plan may lie behind a Dodger purchase. Some suggest that a buyer could try to move the team to a new baseball stadium downtown near Staples Center and then redevelop the 300-acre Chavez Ravine into hilltop homes and office space.
Broad did not return phone calls seeking comment. But sources close to him say he has no real estate motives, but rather is interested in restoring the Dodgers to the team's previous glory.
Neither Checketts, Major League Baseball nor News Corp. would comment for this story.
Checketts, who formerly ran the New York Knicks basketball team and Madison Square Garden, has offered to pay News Corp. $600 million for the team and its stadium, but only if he also gains control of 80% of Fox Sports Net 2. The cable channel airs games of the Dodgers, the Mighty Ducks of Anaheim hockey team and the Los Angeles Clippers basketball team. Checketts also proposes managing News Corp.'s second Los Angeles-based regional sports network, Fox Sports Net, which airs games of the Los Angeles Lakers, the Los Angeles Kings hockey team and baseball's Anaheim Angels.
The cable distribution rights are considered key to making any money in baseball, in which escalating player salaries have left most teams unprofitable. The Dodgers lost about $40 million last year.
News Corp. Chairman Rupert Murdoch, however, prefers to keep control of the regional sports networks, which are part of a constellation of channels that form a competitor to Walt Disney Co.'s ESPN. Murdoch bought the Dodgers in 1997 for $350 million, partly to keep Disney from getting a foothold in the regional sports network business by televising games from its own two teams, the Mighty Ducks and the Angels.
Murdoch has searched for a buyer interested in the Dodgers and not the Fox Sports properties, but has found few takers.
Former baseball Commissioner Peter Ueberroth has expressed some interest, hoping to parlay ownership of the Dodgers into an even bigger deal by building an NFL stadium at Chavez Ravine, sources said. But his interest has cooled, they added, since one of his major financial backers has withdrawn. What is more, previous attempts to build a football field near Dodger Stadium have failed. Real estate magnate Alan Casden also is said to be interested in the team.
Despite the lousy economics of baseball, Checketts has managed to sign up financier George Soros as well as a small equity fund, sources said. The three equity investors, including Broad, have agreed to put up $300 million, sources say. The remaining $300 million will come from banks, including J.P. Morgan Chase & Co. and FleetBoston Financial Corp.
Broad could help Checketts' efforts on two immediate fronts. His prominent profile should ease any concerns among Major League Baseball about local ownership. He also would ensure that Checketts -- who failed to raise enough money when he tried to buy the Boston Red Sox last year -- has adequate funding to make a credible offer, sources said.
Broad's net worth is estimated at $4.8 billion, according to Forbes magazine. He made his second fortune in annuities as chief executive of SunAmerica Inc., which he sold to insurance giant American International Group Inc. in 1998.
Most recently, Broad has turned his attention to civic and cultural affairs. He was the founding chairman of the board of trustees of the Museum of Contemporary Art. He chaired the fund-raising efforts that led to the construction of Walt Disney Concert Hall. And he also was instrumental in bringing the 2000 National Democratic Convention to Los Angeles.
Broad has had his share of controversy. He became a lightning rod within educational circles this year after offering to donate $10 million to Occidental College at the same time he was trying to recruit its president to run for head of the Los Angeles school board.