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Broad Makes Backup Pitch to Buy Dodgers

The developer tells Fox Group that he will pay $430 million, mostly in cash, if Frank McCourt's offer using loans is rejected by baseball.

January 17, 2004|Ross Newhan | Times Staff Writer

Los Angeles developer and philanthropist Eli Broad has offered to buy the Dodgers for $430 million, mostly in cash, if Boston developer Frank McCourt's highly leveraged bid falls through, according to a letter from Broad to Fox Group obtained Friday by The Times.

Los Angeles Mayor James K. Hahn confirmed Broad's proposal, saying he had urged the 70-year-old billionaire to step forward amid concerns from baseball officials and fans that McCourt might be stretched too thin financially to field a highly competitive ballclub.

Broad declined to comment.

McCourt has proposed financing the purchase entirely with loans. In his purchase agreement with News Corp., the corporate parent of Fox Group, McCourt has until Jan. 31 to complete the transaction, or he will have to pay a significant penalty and lose his exclusive negotiating rights.

A senior Fox Group official, speaking on the condition of anonymity, said company executives were not entertaining Broad's offer and were pressing ahead with McCourt.

Baseball officials declined to comment on the record, citing McCourt's exclusivity rights. However, a high-ranking baseball official said the industry is well aware of Broad and his resume, and "it stands to reason he could move through the approval process very quickly if it came to that."

Broad made his $3.8-billion fortune in real-estate development, as a founder of the home-builder Kaufman & Broad, and in financial services as the chief of SunAmerica. He co-founded the Museum of Contemporary Art and led the fundraising effort to build Walt Disney Concert Hall, among his many civic and charitable endeavors.

Fox has been trying to sell the team since January 2003. The media conglomerate acquired the storied franchise for $311 million from the O'Malley family in 1998 as it sought to bolster its sports presence on cable television, but its ownership tenure has largely been a bust in the eyes of fans.

Among the company's first moves was to trade popular catcher Mike Piazza. The signing of pitcher Kevin Brown to baseball's first $100-million contract failed to bring a championship, and Dodger fans watched longingly in 2002 as the lower-budget Anaheim Angels captured their first World Series title.

The Dodgers have drawn fire this off-season for outwardly doing little to improve the team as the Angels signed several high-quality free agents, led by outfielder Vladimir Guerrero. The Dodgers traded Brown to the Yankees.

McCourt's bid requires the approval of three-fourths of the 30 major league owners, but industry officials have acknowledged that the proposal -- because of the amount of money being borrowed -- fails to comply with baseball's complex debt-equity rule.

With the deadline two weeks from today, baseball has not scheduled a vote.

McCourt and his wife, Jamie, are expected to meet with industry officials and lawyers in Los Angeles next week in an attempt to resolve the problem.

Fox insiders said they are confident that McCourt will be approved.

They said Broad had expressed interest in the team several times over the last year but never made a formal offer, raising questions about how serious he is now.

They said Broad's letter did not constitute a formal offer, but that he could submit one if McCourt was rejected.

Sources close to Broad, however, said Fox had treated him with "disrespect" by never taking his overtures seriously.

Broad was part of a failed attempt to bring a National Football League team to the Coliseum in 1999. The group was outbid by Houston's Bob McNair.

Broad has already submitted an Indemnification and Applicant Background Information form to baseball as part of his partnership with New York sports executive and former Madison Square Garden President Dave Checketts in their bid to buy the Dodgers last March.

Checketts ultimately bowed out because of News Corp.'s unwillingness to include its two regional cable networks in the transaction.

Broad then watched a parade of prospective buyers, including Los Angeles developer Alan Casden and Tampa Bay Buccaneer owner Malcolm Glazer, come and go before News Corp. reached an agreement in principle with McCourt on Oct. 11.

In addition to Checketts and Hahn, former Dodger owner Peter O'Malley encouraged Broad to get involved, sources said.

Checketts and O'Malley declined to comment Friday.

Hahn said that though he didn't want to interfere in McCourt's bid, he supported Broad when the developer told him he was thinking of making his pitch to Fox.

"I'm not wishing or hoping" McCourt's bid is rejected, Hahn said, "but it would be great to have an L.A. person of Eli's stature owning the Dodgers. If it wasn't for him we wouldn't have Disney Hall on Grand Avenue.... He's a great individual who has a love of Los Angeles in his heart."

A source close to Broad said that although Broad is vice chairman of the nonprofit Grand Avenue Committee, which promotes downtown Los Angeles development, he has no interest in relocating Dodger Stadium there or developing Chavez Ravine property.

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