For something that is so monumentally important to the future of this franchise, it’s strange to admit that the ownership bidding process seems like it’s almost flying under the radar lately. Frank McCourt has exactly three weeks from today to select his buyer, yet the only news we’ve heard since the Joe Torre & Peter O’Malley groups dropped out in late February was that Michael Heisley & Tony Ressler were joining forces to get back in, pushing the number of groups back up to eight before Jared Kushner’s departure this week dropped it back to seven. Right now, we’re waiting for MLB to complete their vetting process in order to grant approval to final bidders, which is expected to progress this week as groups have in-person interviews with MLB in Phoenix.
Now, we’ve all had our favorites, but what we haven’t heard is any indication of who might be out in front. For the first time, Bill Shaikin drops a hint:
Cohen is widely considered one of three favorites to buy the team, along with St. Louis Rams owner Stan Kroenke and a group led by Magic Johnson and veteran baseball executive Stan Kasten.
Shaikin doesn’t provide any sources or indication why that might be the case, and usually I’d find that sort of thing problematic; however, Shaikin’s reporting on this entire saga has been so rock-solid that he could put out an unsourced report that Miley Cyrus & Snooki were teaming up to buy the club and I’d probably believe it.
If this is true, I find that group of three kind of fascinating, because there’s definitely a “hot, medium, cold” delineation between them. I’ve been pretty apprehensive about Cohen since the first time we talked about him, arguing that a hedge fund guy under investigation from the SEC who’s had his own nightmare divorce which stretched over two decades isn’t exactly the ideal owner to follow up Frank McCourt. Besides, while it doesn’t bother me so much, I know the idea of another East Coast import (a Mets fan and recent buyer of a minority share in the club, Cohen currently lives in Connecticut) who has reportedly never even been to Dodger Stadium won’t sit well with any of us. Of course, it’s not us making the decisions, it’s McCourt, and it’s hard to argue that Cohen isn’t going to have the largest net worth of any bidder (if not necessarily the largest bid).
This morning at Forbes, Mike Ozanian calls Cohen “baseball’s most important man”, arguing that his influx of cash into the Mets and his interest in the Dodgers has to weigh on Bud Selig’s decisions in trying to resuscitate two of his largest and most embarrassing team failures:
The most important man in Major League Baseball right now is Steve Cohen. The hedge fund titan is the man MLB commissioner Bud Selig is genuflecting in front of, praying Cohen will bail him out for permitting the bankrupt Los Angeles Dodgers and cash-strapped New York Mets to pile insane amounts of debt onto their balance sheets.
Over the past two months, as Fred Wilpon and Saul Katz have been slashing their team’s payroll and looking for nickels and dimes under every nook and cranny, the only only investor not affiliated with Mets that has offered to help keep the team afloat has been Cohen, offering $20 million for a 4% stake. The Mets are praying that their season ticket sales will look good enough by the end of April that they can restructure $430 million of debt due in two years. If not, I, and at least two sports bankers familiar with the team’s I have spoken with, believe it is quite possible the Mets will follow the Dodgers into Chapter 11. But at least Cohen is offering the Mets a temporary lifeline. Selig owes Cohen one for that.
During the next few weeks Cohen is also going to set the bar on the sale price for Frank McCourt’s Dodgers. In doing so, Cohen is will be sending a signal on the value of many of the new local television deals struck recently. The Texas Rangers, Los Angeles Angels and San Diego Padres (pending) have received equity stakes in regional sports networks as part of their new media deals. Several other teams, like the Chicago Cubs, are likely to do the same thing over the next couple of years. Cohen’s bid for the Dodgers, which is largely based on what he thinks the value of the team’s next media deal, beginning in 2014, is worth, is going to influence the value of a lot of RSNs.
Other than St. Louis Rams owner Steve Kroenke, Cohen is the only person currently bidding for the Dodgers with the cash to pay over $1 billion for the team. There are several bidders offering $1.5 billion for the Dodgers. But who has the cash? Remember how quickly Rick Caruso bailed? That wasn’t about the parking lots not being included, as Carouso so meekly claimed. It was about cash. MLB kicked out Jared Kushner because he didn’t have the cash either. He wanted to buy the Dodgers with too much debt.
First and foremost, good on MLB for not repeating their McCourt mistake with Kushner. (And if true, it’s insane to me that Kushner would have even bothered.) Of course, if Selig really does want Cohen and his massive financial power to rescue a team so badly, why not just let him keep buying up shares of his hometown Mets? It’s not like the Dodgers don’t have other parties interested, and the Mets are arguably a bigger concern than the Dodgers are right now.
Then there’s Kroenke, who has some appeal. He’s clearly got a ton of experience in sports ownership, having owned parts or all of the St. Louis Rams, English soccer club Arsenal, and basically every professional Colorado sports club that isn’t the Rockies or Broncos, including the Nuggets (NBA), Avalanche (NHL), Mammoth (NLL), Rapids (MLS), and Crush (AFL). Beyond the teams themselves, his groups own the Pepsi Center in Denver and launched Altitude (a regional sports network which carries his Colorado teams) & TicketHorse, a ticketing agency for all of his teams.
In this 2010 ESPN report regarding Kroenke’s move to obtain majority control of the Rams (he’d been a minority owner since the team moved from Los Angeles in 1995), he received high grades for his behind-the-scenes style of management:
Kroenke marked the occasion by making a rare appearance before the media. He has steadfastly maintained a low profile as minority owner of the Rams, earning the nickname Silent Stanley.
“I just have a really busy life,” he said. “I like the members of the press. I really do. I almost went to journalism school. I just don’t have the time. It takes a lot of time to build those relationships, to nurture them.”
He scoffed as his reputation for being publicity shy.
“I’m not trying to offend anyone,” Kroenke said. “I know there’s this wonderful little picture of Silent Stan. I guess it makes good copy. But it just isn’t so.”
He plans to run the Rams with the same behind-the-scenes style he had as minority owner. But there will be no mistake who’s the boss.
“I don’t think it’s a mystery the way we’re running our other clubs,” Kroenke said. “I like to know what’s going on; I like to be involved. But the No. 1 thing is finding the right people, putting them in place and trying to help them out.”
So there’s little question that Kroenke is a tremendously wealthy man (estimated net worth of over $3b) with a great history of sports ownership and a new RSN under his belt, with few public black marks against him. Though he’s a Missouri native, Kroenke even owns a house in Malibu, at least three wineries in California, and his daughter Whitney lives in Los Angeles, so he’s not completely without local ties; this 2007 Denver Post story paints him as a voracious reader and sometimes outdoorsman who is conscious of his health.
The big question, though, is what is Kroenke’s ultimate goal? Is it simply to own a baseball team, considering that it’s basically the only sport he hasn’t had ownership ties in? Is it because he sees the Dodgers as a good investment opportunity? Or is it, as many have suggested, because the NFL potentially returning to Los Angeles is always a hot topic, and he just so happens to own an NFL team that used to play in Los Angeles, just hired former USC player Jeff Fisher to coach, & is currently engaged in a stadium battle with St. Louis that could allow them to move as soon as after the 2014 season?
I’m not quite sure that’s the case, because it’s a little hard to imagine a man who tried (unsuccessfully) to bring football to St. Louis in 1993 and then helped bring the Rams there in 1995 turning around and tearing them out of his home state; he seems somewhat less ruthless, at least publicly, than some of the other billionaires we’ve discussed. If it is his goal to increase the value of the Rams by moving them back to Los Angeles, I don’t mind that in theory, because I think we all know the area is getting an NFL team at some point, and it might as well be a team that already had history there.
I would just worry about the idea of the Dodgers being purchased as a secondary concern towards getting the NFL to LA, and even moreso about where they’d play. I’m sure you all are far more up to date than I am on the various plans and locations put forward for potential football stadiums to house an NFL team (or two), and so it wouldn’t really matter to me which of those the Rams might end up in. But the terrifying part of all that would be if Kroenke would want to build a park in the parking lot of Dodger Stadium… parking lots which Frank McCourt is likely to retain, which could then have Kroenke needing to partner with McCourt in some fashion if he’s unable to buy the lots outright. I’ve liked Kroenke more than I did previously just by writing this piece today, but the idea of anyone who thinks it’s a smart decision to partner with the outgoing scumbag raises a huge red flag. It remains to be seen, of course, if that would be the case.
Last but not least on Shaikin’s list of three front-runners is the Magic Johnson group, which I think many of us have favored since day one. How could you not? Magic is a local hero with obvious sports credentials, even owning part of the successful Dayton Dragons minor league club in addition to his years of service with the Lakers. He’d be one of the few minorities at the ownership level in sports, and he’s partnered with the right people, since Stan Kasten has been in baseball for decades and Mark Walter is the head of the massively wealthy Guggenheim Partners. I’ve yet to see any real downside to this group, and they’re still my preferred selection. The only outstanding question for me here is what will happen with Dr. Patrick Soon-Shiong, the richest man in Los Angeles and a part-owner of the Lakers, who was “absolutely certain” to take part in the bidding, according to reps a few weeks ago. Soon-Shiong is friends with Johnson, but has yet to throw his weight behind any bidding group; his financial muscle combined with the public- and MLB-friendly Johnson/Kasten duo could make this group the one to beat.
Today’s lineup for the 12:05pm PT matinee against the Cubs, which will be broadcast live on Prime Ticket and replayed tonight on MLB Network:
Tony Gwynn (DH), Mark Ellis (2B), James Loney (1B), Jerry Sands (LF), Juan Uribe (3B), Trent Oeltjen (RF), Tim Federowicz (C), Justin Sellers (SS), Matt Angle (CF), with Ted Lilly attempting to rebound from his poor first outing.