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Joe Torre to bid on Dodgers

Former manager of the club joins forces with developer Rick Caruso in an effort to purchase the team.

January 04, 2012|By Bill Shaikin
  • Dodgers owner Frank McCourt, left, talks to former manager Joe Torre during a farewell ceremony for Torre.
Dodgers owner Frank McCourt, left, talks to former manager Joe Torre during… (Jae C. Hong / Associated…)

Joe Torre entered the Dodgers sweepstakes on Wednesday, joining forces with developer Rick Caruso in a bid to buy the city's beloved baseball team.

The Dodgers ownership derby is fast becoming the most intriguing reality show in Los Angeles, with athletic legends, civic icons and assorted billionaires jockeying for control of a team mired in bankruptcy proceedings.

Magic Johnson is in. Mark Cuban, owner of the NBA champion Dallas Mavericks, is in. Steven Cohen, a billionaire eight times over, is in. Dennis Gilbert, the onetime agent for Barry Bonds and champion of amateur baseball in Southern California, is in.

Ron Burkle and Tom Golisano, billionaires with experience as National Hockey League owners, are in.

Peter O'Malley, the owner when the Dodgers last won the World Series in 1988, is in. So are Fred Claire, the general manager that year, and Orel Hershiser, the star pitcher that year — but the three men are in separate groups.

And now, Torre is in.

Torre, likely headed to the Hall of Fame, managed the New York Yankees to four World Series championships before managing the Dodgers from 2008 to 2010. On Wednesday, Torre resigned from his position as an executive vice president at Major League Baseball in order to pursue the Dodgers bid.

Caruso, who has considered a run for mayor of Los Angeles, is perhaps best known for developing The Grove, a highly successful shopping and entertainment center adjacent to Farmers Market.

"I have great confidence in Rick Caruso's unique qualifications and his ability to lead a successful bid," Torre said in a statement.

The so-called "bid books" presenting the Dodgers' financial overview will be sent to more than 30 prospective buyers viewed as serious by Blackstone Advisory Partners, the investment bankers handling the sale for outgoing owner Frank McCourt.

Initial bids are due Jan. 23. Since that date is weeks away and since many prospective bidders have not been publicly identified, it is impossible to say whether any party might be a front-runner.

In addition, since the new owner will be selected by McCourt and not by Commissioner Bud Selig, the usual handicapping method — find the "Friends of Bud" and put them together — does not apply to the Dodgers' sale.

Torre is an ally of Selig, as is Gilbert. So is Stan Kasten, the former president of the Atlanta Braves and Washington Nationals, who is partnering with Johnson. So is Steve Greenberg, the deputy-commissioner-turned-investment-banker advising Cohen.

"Every one of those guys is selling the fact they've got great connections in baseball," said Marc Ganis, president of Sportscorp Ltd., a sports consulting firm. "It really isn't going to matter much in this one."

MLB has agreed to approve up to 10 bidders, setting the stage for a spring auction in which the Dodgers are expected to command more than $1 billion. McCourt, who has the final say, has agreed to complete the sale by April 30. In 2009, the Chicago Cubs sold for $845 million, the record sale price for an MLB franchise.

In 2004, McCourt bought the Dodgers with "not a penny" of his own cash, his attorney said during the McCourt divorce trial two years ago. Selig had considered McCourt the only viable bidder for the Dodgers and approved the sale under pressure from News Corp., which ran the team with annual losses in the range of $50 million.

The high level of interest in the Dodgers now reflects in part McCourt's success at returning the team to operating profitability — notwithstanding the roughly $600 million in debt he ran up — and at nearly doubling the revenue, from $156 million in 2003 to $289 million in 2008.

Yet, the crucial factor luring bidders might well be the coming television jackpot. The Dodgers' TV contract with Fox Sports expires next year, putting the new owner in position to start a Dodgers cable channel, or to leverage that potential into a bidding war between Fox and Time Warner Cable.

Fox will pay the Dodgers $39 million for the 2013 television rights. The new owner could get four times that much per year, based on recent transactions.

Forbes estimated the Dodgers' value at $800 million in March. The standard sale price is three times revenue, so the anticipation of a similar television transaction could add $350 million to the Dodgers' sale price.

"Live sports programming is the most valuable property a broadcaster can have," said a prominent sports investment banker, speaking on condition of anonymity because of his potential involvement in the Dodgers sale.

"It's just skyrocketing. Frank is the beneficiary of that. Good for him."

That could lead Time Warner Cable to conclude that spending some $4 billion for the rights to air Dodgers games would not be as efficient as spending less than half that to buy the team, or perhaps joining a prospective ownership group.

Time Warner Cable is exploring those options, spokeswoman Maureen Huff said Wednesday while declining to comment further.

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