The Los Angeles Dodgers, one of baseball's premier franchises, were sold Tuesday evening for just over $2 billion to a group led by basketball legend Magic Johnson.
The reportedly all-cash purchase was largely financed by Guggenheim Partners, an investment firm. Besides Johnson, the retired Los Angeles Laker, the group consists of controlling partner Mark Walter, who is Guggenheim's CEO; and partners Peter Guber, a Hollywood producer, CEO of Mandalay Entertainment and co-owner of the NBA's Golden State Warriors; longtime baseball executive Stan Kasten; Bobby Patton; and Todd Boehly.
The purchase price is nearly double that of the previous record sales figure for a North American sports franchise, Steve Ross's purchase of the NFL's Miami Dolphins for $1.1 billion in 2009.
Ex-NBA star Johnson, whose first name is Earvin, said: I am thrilled to be part of the historic Dodger franchise and intend to build on the fantastic foundation laid by Frank McCourt as we drive the Dodgers back to the front page of the sports section in our wonderful community of Los Angeles.
McCourt, the current owner, bought the team from Rupert Murdoch’s News Corp. (Nasdaq: NWSA) in 2004. Last June, the Dodgers filed for bankruptcy protection, blaming Major League Baseball for thwarting a television deal between the team and News Corp.-owned Fox Sports.
That was an attempt by McCourt to prevent the baseball commissioner Bud Selig from seizing the team, but after the bankruptcy filing a judge ordered that the Dodgers be put up for sale.
Before the auction, which was set for Wednesday, the team, Dodger Stadium and parking lots surrounding the stadium were estimated to be worth $1.4 billion, according to Forbes magazine.
The court-supervised auction was to be conducted Wednesday by New York-based Blackstone Group LP (NYSE: BX), with McCourt allowed to pick the winning bidder. Tuesday, MLB approved the three-highest bidders as potential team owners. Hours after that move, the Wall Street Journal reported, bids began rolling in but were all so much lower than the Johnson-Walter group's that the auction was rendered moot.
According to various reports the other bidders were Steven Cohen, who runs hedge fund firm SAC Capital Advisors LP; Stan Kroenke, owner of the NFL's St. Louis Rams; and California biotechnology billionaire Patrick Soon-Shiong.
The deal includes $2 billion for the Dodgers and $150 million to form a joint venture with McCourt regarding the parking lots and land surrounding Dodger Stadium.
The deal comes at the right time for McCourt, who is involved in a $131 million divorce settlement with his ex-wife, a domestic drama that has distracted the Dodgers organization and the team's fans.
The sale is preliminary; it still faces a closing process and must be approved by the U.S. Bankruptcy Court in Delaware. McCourt aims to complete the deal by April 30, when he is due to make a divorce-settlement payment to former wife Jamie McCourt.