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Time is running out for Dodgers owner Frank McCourt to choose a new owner before opening day. The number of bidders is now down to four. There've also been a few surprises late in the game.
We have roughly two weeks remaining before Dodgers owner Frank McCourt must sell the team. Bidders have been dropping like flies, leaving only a March Madness-appropriate Final Four groups. It remains to be seen whether all four will make it to McCourt's final auction — the Major League Baseball owners doing the eliminating will first send the finalist to a vote by all owners.
Regardless, McCourt has to conduct his auction and choose a winner by the first week in April. The money must change hands by April 30.
Here's who's left:
•Hedge-fund billionaire Steven Cohen, along with sports agent Arn Tellem and new partners Tony La Russa, the baseball great, and Patrick Soon-Shiong, an Angeleno whose personal wealth is estimated at over $7 billion.
•Former Laker great Magic Johnson, Stan Kasten, plus a new financial partner (see below).
•Stan Kroenke, who owns the St. Louis Rams, one of the NFL teams that's been much-discussed for its potential to relocate to L.A. and move forward a stadium project championed by AEG.
•Michael Heisley, for the moment at least still the owner of the Memphis Grizzlies (see below).
I continue to think that Cohen has the best bid, even though he's apparently in at $200 million less than the top $1.6-billion bid from Magic and his partner, the very experienced baseball executive Kasten. Forbes' Mike Ozanian agrees with my general analysis that only Cohen can write the really big checks, given that his personal net worth is rumored to be $8 billion. More than half his bid, $900 million, will arrive as cash. Beyond that, he's reportedly prepared to spend another billion or so to spruce up both the team and its facilities.
Meanwhile, the other three bidders are scrambling to scare up more money, according to Ozanian. Magic and Kasten have signed on with Peter Guber, owner of the Golden State Warriors, because "institutional investors...ability to come up with enough cash was suspect." Heisely may actually be trying to sell the Grizzlies. If he can do it in a week, that'll be a neat trick. But then again, Larry Ellison could be his buyer, and Ellison is the ideal neat-trick bankroller (this is a man who has, so to speak, sunk hundred of millions in attempts to win the America's Cup yacht race).
I'm not sure how Kroenke made it this far, given that he wants to get the Rams into a new stadium in St. Louis and is playing the tried-and-true "I'll go to L.A. card." If St. Louis doesn't call his bluff — and the Raiders choose to stay in Oakland — he could be looking at running an NFL and a MLB franchise in the same market, which doesn't seem to me like something the NFL or MLB would like. For what it's worth, Bill Shaikin of the LATimes [via the Sacramento Bee] reports that AEG, the group that's currently developing the Downtown L.A. Farmers Field NFL stadium project, has flirted with some of the bidding groups, but isn't signing on with any of them. This would seem to take out the idea that an multi-use facility could be in the cards for Chavez Ravine, where Dodger Stadium is about to turn 50.
Cohen, as I've written before, has been helping MLB out with its very serious New York Mets problem (the team is lurching toward bankruptcy and the owners have gotten embroiled in litigation related to the Bernie Madoff Ponzi scheme). Last week, I talked this over with KPCC's resident sports expert, Nick Roman, and he suggested that Cohen is just going through the motions with the Dodgers because he really desires the Mets, a team that he wanted to buy a major stake in a few years back, only to be rebuffed. Maybe. But he's still putting almost $1 billion cash in the barrel for the Dodgers, so you could also say that he's pressuring McCourt to pick his bid simply because it gives the embattled owner the most lucrative escape strategy.
Another factor pushing Cohen's bid forward is that he could be under threat of prosecution by the Securities and Exchange Commission, for insider trading, something that his ex-wife accused him of during their extremely contentious divorce (he's since remarried). Some of his former employees have been arrested. There's be some talk in the financial media that the feds are closing in. So he has an incentive to close down SAC Capital Advisors, his hugely successful hedge-fund.
So he's now the last money guy — with all the attendant drawbacks — mixed in with an elite cadre of sports pros. This is clearly why he's added La Russa to his team. The arrival of Soon-Shiong is a bit of surprise, but he could easily just be throwing $200 million to even things up with Magic and provide Cohen with some much-needed local flavor. You could call this development cynical or savvy on Cohen's part.
Or you could look at in the context of the how the man made his billions — through "information arbitrage," a fancy way of saying that he always knew more than the guy on the other side of a trade and profited accordingly.
What about the parking lots, which pushed dream-team bidders Rick Caruso and Joe Torre out? McCourt has said he wants to keep them (they're not part of the Dodgers bankruptcy). I think they were just trotted out to give Caruso and Torre, whose bid must have been seriously undercapitalized, a convenient way to save face.
Expect the maneuvering and the 11th-hour announcements to get hotter and heavier now that we're coming down to the wire. I'll stay on top of it — and for now restate my view that the likely winner in this increasingly high-stakes game is Mr. Cohen of Connecticut.