The Orange Country Register's parent company, Freedom Communications, has been acquired by a Massachusetts investment group. The size of the deal remains a mystery.
On Monday, Boston greeting card mini-mogul Aaron Kushner, along with a group of investors, announced the acquisition of the remaining assets of Freedom Communications, whose flagship media property is the Orange County Register.
The price remains unknown. As does the financing on the deal. And in Boston, they're even asking out loud whether this means it's game over for Kusnher's effort to buy the Boston Globe from the New York Times. His rumored bid was $200 million, which seems pretty low. The New York Times Company's former CEO, Janet Robinson, departed late last year with a $23-million severance package in tow. She didn't want to sell the Globe. But it's entirely possible that the NYT Co. now does.
The Boston Herald spoke with an academic and former newspaper editor to get his take:
Is this whole thing just a toy for some rich men playing with other people's money?
I'm glad that some really big questions about the Dodgers deal are finally being asked by one of the biggest names in financial journalism. Andrew Ross Sorkin, in his DealBook column at the New York Times, admits that for the past few weeks, he's been "puzzled" by the terms of the sale, with Guggenheim Baseball Partners — Magic Johnson, Stan Kasten, Peter Guber, and Guggenheim Partners — shelling out $2.15 billion for the team, a record price.
The winning bid was led by Mark Walter and his firm, Guggenheim Partners, which most people in sports — and frankly, even on Wall Street — know very little about. (Peter Guber, the film producer behind “Rain Man” as well as Stan Kasten, the former president of the Atlanta Braves, are also involved.)
A quick background check and some back-of-the-envelope math raises an obvious red flag: how on earth can this group of individuals afford to pay $2 billion in cash?
The answer is that they probably can’t — at least, not by themselves.
Mr. Walter, along with his colleague Todd Boehly, Guggenheim’s president, appear to be living out a childhood fantasy using other people’s money, some of whom may not even realize it.
Denis Poroy/Getty Images
SAN DIEGO, CA - APRIL 5 : Magic Johnson (L) sits with Frank McCourt during the game between the Los Angeles Dodgers and the San Diego Padres in the home opener at Petco Park on April 5, 2012 in San Diego, California. (Photo by Denis Poroy/Getty Images)
The Dodgers and the organization's creditors began filing documents with the bankruptcy court in Delaware that's overseeing the team's sale. We didn't learn a whole lot beyond the known value of the deal: $2.15 billion, consisting of a cash offer, the assumption of the team's existing debt, and a side deal with outgoing owner Frank McCourt for the real estate around the stadium, currently blanketed with parking lots.
What we want to know is where the money that Guggenheim Baseball Management (GBM) — the entity that consists of Magic Johnson, Stan Kasten, Peter Guber, and financier Mark Walter of Guggenheim Partners — has brought to the deal is coming from. Remember, the final sale was conducted preemptively, without the anticipated auction that McCourt was going to conduct among the three final bidders. And the final sale price came in over half a billion higher than the initial bid than Major League Baseball approved from Guggenheim.
A couple of weeks ago, Guggenheim Partners was an under-the-radar funding source for Magic Johnson and Stan Kasten's successful marquee campaign to buy the L.A Dodgers. Just a $125-billion private firm in a world of much bigger fish. Goldman Sachs has almost a trillion in assets under management. Morgan Stanley has over $800 billion. Guggenheim hangs out in much lower reaches, with other broker-dealers in the realms below the exalted heights of major Wall Street investment banks.
Under CEO Mark Walter, however, Guggenheim is moving aggressively to break out of this mold and distance itself from shops like MF Global, the bankrupt broker-dealer that former Goldman CEO Jon Corzine was trying to bring into the big leagues — before a failed bet on European debt and some possibly illegal maneuvers with client money sent the firm into bankruptcy (and could send Corzine to jail).
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The bleachers stand empty at Dodger Stadium in Los Angeles, California.
UPDATE: The Disney Family is also still in the running. So a total of five known and two unknown bidders.
•Tom Barrack of Colony Capital, a $30-billion L.A.-based private equity firm
•Magic Johnson, in partnership with Stan Kasten
•Jared Kushner, the boy-wonder son-in-law of Donald Trump who has so far distinguished himself by running a money-losing weekly newspaper, the New York Observer
•The Disney Family (haven't heard much about this bid, to be honest)