Kasten is expected to wind up as the team’s top day-to-day executive.
The other two finalists were:
_ Stan Kroenke, whose family owns the NFL’s St. Louis Rams, the NBA’s Denver Nuggets, the NHL’s Colorado Avalanche and Major League Soccer’s Colorado Rapids. He also is majority shareholder of Arsenal in the English Premier League.
_ Steven Cohen, founder of the hedge fund SAC Capital Advisors and a new limited partner of the New York Mets; biotechnology entrepreneur Patrick Soon-Shiong; and agent Arn Tellem of Wasserman Media Group.
It remains to be seen whether Major League Baseball will challenge the deal in U.S. Bankruptcy Court in Delaware, where the case is before Judge Kevin Gross.
Under an agreement reached by MLB and McCourt in November, a private auction was to be held among the finalists and McCourt was to select the winner by Sunday. The sales agreement is to be submitted to the bankruptcy court by April 6, ahead of a hearing seven days later, and the sale completed by April 30, the day McCourt is to make a divorce settlement payment.
“This agreement with Guggenheim reflects both the strength and future potential of the Los Angeles Dodgers, and assures that the Dodgers will have new ownership with deep local roots, which bodes well for the Dodgers, its fans and the Los Angeles community,” McCourt said in a statement.
The acquiring group would gain the ability to sell the Dodgers‘ local broadcasting rights starting with games in 2014. The Guggenheim group likely would use money gained from the rights sale _ or from the team’s own network with outside investment _ and use those funds to pay down the acquisition debt.
“The amount of leverage is a big question,” said Marc Ganis, president of the Chicago-based consulting firm Sportscorp, which is not involved. “The likely scenario is that they have a broadcasting deal in mind so that they pay up now and pay themselves down from a big broadcasting upfront payment.
“The problem with this strategy is that the more paid upfront by the broadcast deal, the less money is available for team operations. The more debt they take on, the more debt service is required, the less money that’s available for team operations. With the only beneficiary being the man walking out the door. A challenging result that baseball tried to avoid.”
The current record for a baseball franchise is the $845 million paid by the Ricketts family for the Chicago Cubs in 2009.
The Dodgers filed for bankruptcy protection in late June, just days before the team was expected to miss payroll. The filing came after baseball Commissioner Bud Selig refused to approve a 17-year agreement between the Dodgers and Fox’s Prime Ticket subsidiary that would have been worth $2 billion or more. MLB feared McCourt would use about half of an intended $385 million cash advance to fund his divorce.
Los Angeles finished third in the NL West last season at 82-79, had just three sellouts and fell short of 3 million in home attendance in a full season for the first time since 1992. There was some concern among MLB officials about the financing of the Walter bid because some of the money was coming from insurance companies that are owned by Guggenheim. A person familiar with the baseball owners’ teleconference Tuesday said several team owners voiced that during the call. The person spoke on condition of anonymity because MLB did not make any announcements.
“The problem there is a fundamental problem as you go into an auction, and that is the absolute reliance on other people’s money,” said Ganis. “It means a lot of regulators. It means either shareholders or, depending on which insurance companies it’s coming from, the insured themselves.”
Kasten was hired as legal counsel of the Braves and the NBA’s Hawks in 1976, and three years later became the NBA’s youngest general manager at 27. He was promoted to president of the Braves and Hawks in 1986 and also became president of the NHL’s Thrashers in 1999. After leaving the Atlanta teams in 2003, he became president of the Washington Nationals from 2006-10.View Entire Story
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