Explaining Southern California's economy

Who is Steven Cohen? The lowdown on the hedge-fund legend who wants to buy the Dodgers

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Harry How/Getty Images

Clayton Kershaw and teammates of the Dodgers celebrate a two run homerun of Matt Kemp for a 2-1 win over the St Louis Cardinals at Dodger Stadium on April 17, 2011.

As KPCC's Corey Moore reported yesterday, billionaire hedge fund king Steven Cohen wants to buy the Los Angeles Dodgers. You'll recall that owner Frank McCourt, mired in an acrimonious divorce proceeding and dueling with Major League Baseball Commissioner Bud Selig, put the team into bankruptcy in June. That desperate gambit failed and McCourt has given up the fight. The team now has to find a new owner by April 2012.

Enter Cohen, with an estimated net worth of $8 billion, but more importantly, a reputation as Wall Street's most successful — and controversial — trader. In fact, few men more perfectly represent the ascent of the swashbuckling trader on the Street than Cohen, who started his hedge fund, SAC Capital Advisors, in 1992. It's now worth $12-$14 billion.

With coin like that, Cohen could easily afford to bid for the Dodgers, whose value has been pegged at around $1 billion.

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

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Kevork Djansezian/Getty Images

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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