Frank McCourt worked a possible $3-billion deal, which is dwarfed by the… (Jason Redmond / Associated…)
Maybe you’re not a big Bud Selig fan. Maybe you’re still irked about that Milwaukee All-Star game or that he ever allowed the Dodgers to be sold to Frank McCourt or an inability to find a new barber.
But say this for Selig, when he dug in his heels on McCourt, he dug them in all the way. And he’s looking smarter for it by the day.
Remember back in the summer of 2011 when Selig rejected McCourt’s efforts to sign a new media-rights deal with Fox?
He had several excellent reasons –- like not wanting to see over half the $385 million up-front money go directly to the McCourts -– but the first factor mentioned in his letter of rejection was because it was “clear that you are pursuing the proposed transaction now, rather than waiting until you can 'test the market,' due to your own personal financial and marital issues.”
At the time, McCourt contractually could only negotiate directly with Fox. And although the $3-billion deal sounded impressive at the time, it’s starting to look like a half-price sale.
Now comes word the Dodgers are talking to Fox about retaining its media rights package for at least $6 billion, maybe $7 billion.
So when Selig wrote McCourt his proposed transaction was “neither in the long-term interests of the franchise nor consistent with the best interests of the game of Baseball,” he seemed to know exactly what he was talking about.
Think the rest of the teams with expiring media-rights deals might not just be a tad excited about the proposed Dodgers deal?
Selig’s reasoning was basic Economics 101 –- selling under duress to only one party does not have the same leverage as when dealing from a position of strength with multiple bidders.
The Dodgers are currently in an exclusive 45-day period where they can negotiate only with Fox. That window closes Friday, so Fox has to be feeling the pressure to secure the deal now before Time Warner and others can join the fray.
News of the potential TV deal was first reported by deadline.com. The story was presented almost exclusively from the viewpoint of Fox, which makes you wonder if it did not plant the story to put pressure on Guggenheim Baseball Management to complete the deal now before others could bid. (Included in the story was a Fox threat it would cease negotiating if a deal was not reached by the end of the month. Yeah, right.)
Guggenheim purchased the Dodgers for a record $2.15 billion, a figure many scoffed at as ridiculous. Now it is about to double that with a TV deal alone.
There will be losers in all this, of course. Like cable subscribers who ultimately will have to pick up the tab. And most certainly Fox, which sold the team to McCourt in 2004 for $430 million and reportedly passed on buying them back for $2 billion while the team was in bankruptcy.
The deal is not done, but Guggenheim is looking plenty smarter today. And so is Selig.
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