Agreeing to pay an estimated $350 million for the storied Los Angeles Dodgers, Fox Thursday laid the cornerstone of what is expected to become a U.S. sports empire, designed to complement News Corp.’s global TV distribution platforms.
The Fox Group announced it had reached an agreement in principle, pending the approval of a majority of Major League Baseball owners, to buy the team from Peter O’Malley, whose family has controlled the franchise since 1950.
In the process, Rupert Murdoch, chairman of Fox parent News Corp., has done a big favor for Ted Turner, George Steinbrenner and the other owners.
Murdoch’s latest deal shatters the previous record pricetag for MLB franchise — the Baltimore Orioles fetched $173 million in 1993 — and is expected to raise the value of other ballclubs by 10% to 20%.
“We are very excited with the potential opportunity of carrying on one of the greatest winning traditions in all of sports,” said Peter Chernin, chairman and CEO of Fox Group.
“With their understanding of the complex issues facing baseball today, I am confident (Fox) can lead the Dodger organization into the 21st century,” said O’Malley, who has agreed to stay on as team president for an indefinite period.
In addition to the team, the sale includes Dodger Stadium and the prime Chavez Ravine real estate that surrounds it, the team’s spring training facility in Vero Beach, Fla., and its sports academy complex in Venezuela. Once the Dodgers are in the bag, Murdoch is expected to move on plans for bringing a new NFL franchise to Los Angeles.
To clinch the Dodger deal, Murdoch needs the approval of two-thirds of the National League owners and a majority of American League owners. MLB owners aren’t expected to vote on the deal until January, but sources close to the situation say informal polling indicates approval is virtually assured, even in the face of likely opposition from Murdoch foe and Atlanta Braves owner Ted Turner.
However, a potential problem could arise if Murdoch hopes to move quickly on telecasting Dodger games on News Corp.’s satellite TV platforms in Asia, where the team has built a big fan base in recent years with the signing of Japanese pitcher Hideo Nomo and South Korean pitcher Chan Ho Park. While MLB holds TV rights throughout much of Asia, they are largely undeveloped and the market is huge.
Closer to home, Fox’s acquisition of the Dodgers won’t change things much as far as local TV rights to Dodger games are concerned. The team is in the first year of a five-year broadcast pact with Tribune Broadcasting’s KTLA Los Angeles.
Fox already has the local cable rights to the Dodgers locked up for several years through a complex arrangement struck last year with the now-defunct Tele-TV, which had sub-licensed the non-broadcast rights to Dodger games from KTLA.
**contributor:Bloomberg Business News