The Dodgers' new ownership team paid $2 billion for the team and have a payroll over $200 million for 2013. They need a huge broadcast contract.
Better, it turns out, than they were a few weeks ago. The Dodgers — purchased by Guggenheim Baseball Management for $2 billion and with a 2013 payroll of almost $211 million — need to bring in a lot of revenue from a new broadcast contract. The team's current deal with Fox Sports, which concludes in 2013, is for $350 million.
That's peanuts compared to the crackerjack (Sorry! Ballpark humor...) deal that Fox and the Dodgers concocted and presented to Major League Baseball a couple of weeks ago, says Forbes' redoubtable sports business correspondent, Mike Ozanian: $6.1 billion, to create a hybrid regional sports network/renewal deal with Fox.
The size of that jump in the numbers should surprise no one. Guggenheim Baseball Management — a sort of sports-oriented private equity sub-firm created by Mark Walter of Chicago-based Guggenheim partners, Stan Kasten, and Magic Johnson — paid $2 billion for the Dodgers on the assumption that the broadcast contract would be ginormous.
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National League All-Star Huston Street of the San Diego Padres looks on during the Gatorade All-Star Workout Day at Kauffman Stadium. Why is it taking so long to sell his team?
The simple answer is: It's complicated.
You can't just sell a Major League Baseball franchise for $800 million (the widely reported sale price, about $400 million more than what Forbes says the team is worth) and expect negotiations to go off seamlessly. So reports that the Padres were going to be sold by the All-Star break have now turned out to be exaggerated, even though the O'Malley family and their investors have been in an "exclusive" negotiating period with John Moores, the Padres' current majority owner.
That negotiating period has been extended by what the Chicago Tribune said on July 8 would be another 10 days. The O'Malley Group is still the only bidder, and based on his recent public comments, it sounds like MLB Commissioner Bud Selig has given the deal his blessing.
"Bud Selig doesn't take that kind of position if he hasn't already counted the votes," said David Carter, a professor of sports business at the USC Marshall School of Business and the Executive Director of the USC Sport Business Institute.