News Corp. has agreed in principle to sell the Dodgers to Boston real estate developer Frank H. McCourt, both parties announced Friday. Neither would reveal the sale price, but it is believed to be about $430 million.
The deal, reached after weeks of private negotiations, includes the team, plus Dodger Stadium and surrounding property, the club's Vero Beach, Fla., spring training headquarters and its player development complex in the Dominican Republic. The sale isn't official until it is approved by at least 16 of Major League Baseball's 30 owners, but sources said that could happen as early as the middle of next month. News Corp. cannot vote.
The media giant bought the team from the O'Malley family in 1998 for a then-record sum of $311 million. After pouring in an additional $200 million trying to field a successful team and to renovate Dodger Stadium, the company asserts it never made a profit, losing about $40 million a year. As a result, News Corp. needed a sale of $500 million or more to break even on its investment.
Sources said the actual dollar value for the club and its property holdings would be between $325 million and $340 million once discounts and credits are factored into the accounting.
There has been plenty of turmoil -- and no playoff appearances -- at Chavez Ravine in the five years since News Corp. purchased the Dodgers, ending a stable and successful 50-year reign by the O'Malley family, which brought the team from Brooklyn to Los Angeles in 1958.
The team of Jackie Robinson in Brooklyn flourished out West, drawing at least 3 million fans for a record eight consecutive seasons and annually ranking in the top five in major league attendance.
Fans have bemoaned the international media conglomerate's apparent disregard for the franchise's rich history and expressed distrust about the corporate owners because of numerous controversial moves, front-office purges and lack of success on the field. The team has failed to make the playoffs since 1998, and hasn't won a postseason game since winning the World Series in 1988.
If McCourt receives MLB approval as expected, there could be several personnel changes in the current Dodger staff.
Chairman Bob Daly, the former Warner Bros. Studios chief, who took over day-to-day control of the team in 1999, has said he would not stay under a new owner, and the status of General Manager Dan Evans and Manager Jim Tracy, among others, could be in doubt.
It is also expected that former San Francisco Giant and current MLB executive Corey Busch, an advisor to McCourt in his bid for the Dodgers, would take a front office position.
Although a final step still remains before the team can change hands, McCourt, in Los Angeles for the final negotiating sessions, in a statement expressed confidence and excitement about the "opportunity to lead the Dodgers to continued excellence. We anticipate a smooth completion of this transaction in the weeks ahead, and when approved, our most immediate goals are returning the Dodgers to the World Series and making each fan's experience at Dodger Stadium the absolute best that it can be."
McCourt has no plans to relocate the Dodgers to Boston.
He failed in attempts to acquire the Boston Red Sox in 2001 and the Angels this year, stirring questions in the industry about whether he has sufficient financial backing to close the deal. But baseball executives involved in the approval process expect the final phase of the sale to go smoothly.
That was not the case when News Corp. reached an agreement in principle in May with Malcolm Glazer, owner of the National Football League's Tampa Bay Buccaneers. That deal, for about $360 million, collapsed because Glazer was unable to overcome complex financing regulations in the NFL and baseball.
The commissioner's office has assured McCourt it will try to move the process along as fast as possible, and in a sign that there is momentum behind the deal, allowed News Corp. to release a three-page document outlining the agreement. There was no such detailed announcement when the Glazer deal was being studied by baseball.
Said a high-ranking baseball official of McCourt's status: "My understanding is he's still putting a group together, but I don't foresee any problems in that regard."
McCourt has significant Boston property holdings, which some baseball officials believe might be appraised as high as $400 million, and oversees a successful real estate development firm. His net worth is unknown.
There is at least one other major financial backer in McCourt's ownership group. As long as the unidentified individual and the rest of the group hold up under baseball's extensive background checks, officials said, McCourt will become the Dodgers' next managing partner.
News Corp., which is baseball's national television broadcast partner over its Fox network, is eager to have a prospective buyer approved, having decided the Dodgers no longer fit a strategic need.