Ownership candidates with Hollywood ties emerge
With Fox Sports and the Los Angeles Dodgers having settled their legal differences, the final impediment has been removed from the sale of the baseball franchise — amid the possibility that an entertainment name could become the team’s new owner.
Much speculation centers on Time Warner Cable, which could use ownership as a means to ensure it locks up longterm TV rights to the Dodgers. But also scattered among the potential ownership groups are such names as former CNN talkshow host Larry King, the Roy E. Disney Family, film investor and HDNet chairman Mark Cuban, NBA Hall of Famer-turned-business magnate Magic Johnson and Los Angeles developer Rick Caruso, who could have a keen interest in exploring the entertainment possibilities surrounding Dodger Stadium.
The sale of the Dodgers is stipulated to take place by April 30, the culmination of a labyrinthine journey through the courts that began with the 2009 martial separation and ensuing divorce of Dodger owners Frank and Jamie McCourt. The reward for the new owners, in addition to possession of the bellwether but troubled baseball team, will be a windfall in TV rights revenue, expected to go for at least $150 million per year on average over 20 years effective in 2014.
A critical element of Fox’s settlement with the Dodgers on Tuesday was that it preserved the media giant’s window for exclusive negotiating rights for a new TV deal through Nov. 30. The Dodgers’ new owners can lock up a deal with Fox before next winter, or they can wait things out and try to create a bidding war between Fox and Time Warner Cable. Both media companies have a pressing need for the Dodgers during warm-weather months in the wake of Time Warner Cable nabbing the rights to the Los Angeles Lakers from Fox, effective next NBA season, to create new dedicated English- and Spanish-language cable sports networks.
Tuesday’s agreement might have increased the incentive for Time Warner Cable itself to pursue Dodger ownership, though whether Time Warner Cable wants to burden itself with the high cost of operating the franchise remains to be seen. Dodger player payroll alone for the next 20 years could easily exceed the $3 billion or more that the TV rights would cost, before one even addresses day-to-day operating costs and the need to refurbish 50-year-old Dodger Stadium.
It’s noteworthy that despite the emergence of new ownership candidates for the Dodgers seemingly every day, Fox has categorically denied interest in reacquiring the Dodgers, which it sold to the McCourt family eight years ago this month.
However, Fox has retained the right to challenge the sale of any portion of the team to Time Warner Cable, per a provision in the current Fox-Dodgers rights agreement that was designed to ward off another network creating or co-creating a rival Dodger cable channel. That could lead to another legal skirmish down the road, this one between the media giants, centered on whether Time Warner Cable’s new networks fit that definition.
As for the other ownership candidates, Cuban has been long-rumored as a possibility, but whether the Dallas Mavericks owner has the enthusiasm to make what is expected to require a record-breaking bid for a baseball team is uncertain. For his part, King, partnered with former baseball agent and executive Dennis Gilbert (who made his bones early in his business career selling life insurance to such Hollywood mainstays as Johnny Carson), has an unquestioned passion for the Dodgers, but if his group has the capital to outbid others, it hasn’t been revealed.
Those others include Caruso, who has not only linked arms with former Dodger and Yankee manager Joe Torre but, according to the Los Angeles Times, Byron Trott of BDT Capital Partners. Johnson has teamed with longtime baseball executive Stan Kasten and investment firm Guggenheim Partners. Each of those groups has a recognized combination of sports and business insiders with deep financial backing.
Key to the Disney family bid will be Stanley Gold of Shamrock Partners, the family investment firm. The Walt Disney Company owned the Dodgers’ Orange County neighbors, the Angels, from 1996-2003, but the Dodger pursuit would be akin to a private bid.
The Dodger-Fox settlement came 2 1/2 weeks after Fox earned a favorable ruling from a U.S. District Court, overturning a federal bankruptcy court decision that would have accelerated the sale of the Dodgers’ post-2013 cable rights. Fox will be keen to take advantage of this latest turn of events, no matter who the next Dodger owner is.
“We are pleased that these matters between our two organizations have been resolved,” Fox said in a statement. “We were never in favor of litigation, but it was imperative that we protect our exclusive media rights. Under the terms of the settlement, Fox’s media rights remain in place and we look forward to working with new ownership on future television rights discussions.”