Explaining Southern California's economy

Will the Padres be sold by the All-Star break?

San Diego Padres v Arizona Diamondbacks

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Chase Headley of the San Diego Padres dives for a ground ball against the Arizona Diamondbacks. The team is in negotiations with potential new owners, but may not seal the deal in time for the All-Star Game.

Last week, there was some serious speculation that the San Diego Padres would be sold by current owner John Moores to a group led by the O'Malley family (of Dodgers fame) with investors that include pro golfer Phil Mickelson in time for the All-Star Game, which takes place on July 10. 

We're obviously running out of days for that to happen. However, the O'Malley group is reported to be in "exclusive" negotiations with Moores, over a purchase price that's been pegged at $800 million. Major League Baseball Commissioner Bud Selig has also all but given the deal his blessing

There were some questions about how the deal would be financed, based on problems Peter O'Malley encountered with Korean investors when he entered bidding for the Dodgers earlier this year. But it now appears that the O'Malley bid for the Padres doesn't involve that funding channel.

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Frank McCourt: Businessman of the year?

LAPD Takes Over Security At Dodgers Games After Attack On Giants Fan

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Los Angeles Dodgers owner Frank McCourt. He sold the team, but kept the parking lots, to the tune of $14 million a year.

Now that the Los Angeles Dodgers have been officially sold, for the record-setting price of $2 billion, we can, without emotion, consider the accomplishment of former owner Frank McCourt.

You'd have to seriously consider him for the title of businessman of the year. Seriously.

Why? Because in 2004, McCourt bought the Dodgers for $430 million, using effectively none of his own money. After satisfying the various debts related to the team as it emerged from bankruptcy court into the arms of Magic Johnson's ownership group, Guggenheim Baseball Management (GMB), McCourt should clear something like $1 billion. He had to pay his ex-wife $131 million in their divorce settlement — but the side deal he did for the Dodger Stadium parking lots amounted to $3 billion, split between himself and what has been described as an "entity" associated with the new owners. At $150 million, his half wound up being worth close to $20 million more than Jamie's payout.

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Dodgers sale: It's all about the money!

Pittsburgh Pirates v Los Angeles Dodgers

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It's getting close to decision time for Frank McCourt on choosing a winning Dodgers bidder.

We're getting down to the wire in the bidding for the Los Angeles Dodgers. Owner Frank McCourt is expected to conduct a final auction in time to announce a winning bidder by the first week in April, with the money changing hands and the team officially emerging from bankruptcy by April 30.

Right now, with the bids all in, the various parties who want to buy the team are being vetted by Major League Baseball. Some of the final bidders have fallen by the wayside — notably surprise late entry Jared Kushner, who owns the New York Observer and is Donald Trump's son-in-law. Grant Brisbee has the most recent lowdown. Seems that five bidder-groups are likely to pass MLB muster.

I was a bit stunned to learn that Magic Johnson and Stan Kasten — the local favorites after Rick Caruso and Joe Torre dropped their bid — have put up the highest dollar figure at $1.6 billion. I didn't think anyone would outbid Steven Cohen, the hedge fund guy who's reportedly worth $8 billion on his own. Cohen's bid is evidently $1.4 billion, according to Brisbee. But Forbes thinks — as I do — that Cohen is the only bidder with enough money essentially already in the bank to write Frank McCourt a big check. That's the way Forbes' Mike Ozanian is spinning it, anyway.

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The Dodgers, the McCourts, Bud Selig, and the dictatorship of Major League Baseball

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Frank McCourt has lost control of the Dodgers franchise as Bud Selig and the Major League Baseball association has seized ownership.

It's not clear to me that big-time sports is a business in any meaningful sense of the term. It seems based on economic principles drawn from the pre-capitalist era, when circuses roamed the landscape and people put their faith in shamans. But the way the Dodgers/McCourt psychodrama is playing out here in LA has led me to revise my view. Major League Baseball isn't even charming in some retro-feudal sense. It operates like a backwater banana republic, ruled by the iron hand of a Maximum Leader, Commissioner Bud Selig.

The sports media seem to have accepted this yucky paternalistic arrangement, which is worrisome. Here's Bill Plashcke in the LA Times:

Bud Selig owes us. The baseball commissioner who allowed a seriously underfunded McCourt to take the team from desperate Fox in 2004 owes us a strong and viable owner this time.

Selig will pick the person, believe me. No sports commissioner has a stronger influence over who is allowed entry in his league. Selig will pick this owner like he has picked other owners, but never before has his selection been more important, more mandated, and more tied to his legacy.

Selig owes us. He owes Los Angeles a well-funded, competitive-minded businessperson who understands that the Dodgers are about a family experience, Hollywood entertainment and, most important, winning.

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