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News Corp. Strikes Deal to Sell Dodgers to Boston Developer

THE STATE

October 11, 2003|Jason Reid and Ross Newhan | Times Staff Writers

The team was purchased in a bid to reinforce the dominance of News Corp.'s Fox Sports Net and to fend off an attempt by rival ESPN, owned by the Walt Disney Co., to launch a competing regional sports channel. To make the venture viable, ESPN would have needed Dodger games in addition to those of its own two teams at the time, baseball's Anaheim Angels and the Anaheim Mighty Ducks of the National Hockey League.

After News Corp. bought the Dodgers, Disney scrapped its regional sports cable plans, reducing the strategic imperative. News Corp. has been looking for a buyer on and off for at least two years, but its urgency to sell became more acute last year as Murdoch sought money to finance his bid for satellite TV leader DirecTV.

After losing a bidding contest in 2001, Murdoch finally sealed a $6.6-billion deal in January that is expected to be completed by year end to take over DirecTV's parent, Hughes Electronics Corp.

Protecting News Corp.'s regional sports networks was key to any sale of the Dodgers. In fact, one reason News Corp. took so long to find a buyer is its refusal to sell its two local sports channels in Los Angeles as part of the deal.

Owning cable rights is key to offsetting the lousy economics of owning a baseball team. The Boston Red Sox, with less than half the operating losses of the Dodgers, sold for $700 million last year. Nearly half the price was credited to the New England Sports Network, which carries many of the team's games.

David Checketts, who formerly ran the New York Knicks basketball team and Madison Square Garden, earlier this year offered to pay News Corp. $600 million for the team and its stadium, but only if he also gained control of Fox Sports Net 2. The cable channel airs games of the Dodgers, the Mighty Ducks and the L.A. Clippers basketball team. News Corp.'s second Los Angeles-based regional sports network is Fox Sports Net, which airs games of the Lakers, the Kings hockey team and the Angels.

News Corp. has been unwilling to sell such key TV assets, which are now making money after years of losses.

In addition to Glazer, there were at least two other major bids made to buy the Dodgers.

Jeff Smulyan, the former Seattle Mariner owner who is chairman and chief executive of Emmis Communications Corp., was the popular choice among some baseball owners. Smulyan, though, backed away from the table because of News Corp.'s refusal to include six of its television stations in the deal.

Alan I. Casden, a Southern California developer, was believed to have made the highest bid for the team alone, about $400 million, but officials said Casden probably would not be approved because of a legal issue he faces. Casden discussed the idea of turning Chavez Ravine into a housing development and exploring building a new stadium in downtown Los Angeles.

McCourt's intentions for Dodger Stadium remain unclear.

McCourt has deep roots in Boston, as his family has operated a heavy-construction company for four generations. He began his career in his family's infrastructure business, McCourt Construction Co., before staking out on his own and founding the McCourt Co., a real estate development firm. His wife, Jamie, is vice president and general counsel.

"Frank and Jamie McCourt have a remarkable enthusiasm for baseball and a profound commitment to community," News Corp. Chairman Peter Chernin stated in a news release Friday. "Their extraordinary business acumen and understanding of the complex issues facing the game today ensure success for the Dodgers organization for many years to come."

McCourt is expected to relocate from Brookline, Mass., to run the storied franchise.

"He is a passionate fan," said Boston Red Sox President Larry Lucchino, whose group outbid McCourt for the franchise. "He's wanted this opportunity for a long time. I wish him well."

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Times staff writers Sallie Hofmeister and Bill Shaikin contributed to this report.

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