Magic Johnson and Stan Kasten Buy Dodgers from Frank McCourt -- But Uh Oh! Frank May Not be Gone
Update on next page: Bidder Joey Herrick on the importance of local owners.
Magic Johnson, beloved spots icon in Los Angeles, and his group of investors including former Atlanta Braves president Stan Kasten, essentially wrote a $2 billion check Tuesday evening to buy the Dodgers, pre-empting a final auction round that had been set for Wednesday, March 28.
But is McCourt really gone from Chavez Ravine?
According to extremely excited sports radio commentator Matt "Money" Smith, who went live on KFI moments after the news broke shortly after 8 pm Tuesday, the stunning $2 billion was justified by the "incredible" money to be made "off local TV rights." Fans of the Dodgers who hate McCourt sounded ecstatic, but Smith warned that Frank may not be gone:
"It is not clear whether or not (McCourt) maintains control of the parking lot," made up of 130 acres of lands surrounding Dodger Stadium, Smith said. "For people that think they're rid of Frank McCourt forever, that is a tricky situation because that is a lot of undeveloped land there."
According to Bill Shaikin of the Los Angeles Times, Magic Johnson will own only a small stake in the Dodgers, as will Hollywood exec Peter Guber. Those two buddies are partner owners together in a minor league baseball team, the wildly popular Dayton Dragons.
The big money bags involved in the stunning early purchase move was the little-mentioned -- until now -- Guggenheim Partners, a company based in Chicago involved in financial services.
Guggenheim Partners CEO Mark Walters played a key role in setting up the money in this deal. However, earlier reports said that Johnson's group was under-capitalized compared to Wall Street hedge fund king Steven Cohen.
Apparently they found a huge pile of cash somewhere -- more on that later. Shaikin says Mark Walters will not be involved in running the team.
That job, of running the team, apparently will go to old baseball hand Kastens, who Magic Johnson has called "my man."
Apparently so! Johnson's fascinating group, a mix of big money bags and big-time baseball names -- plus his own extreme popularity among all kinds of sports fans and non-fans -- created what turned out to be the local favorite group. And is now the actual owner.
And with $2 billion, far more than the rumored $1.3 to 1.6 billion, the Magic-Stan crowd caught the attention of the only person whose opinion really mattered, Frank McCourt.
Spoiler alert (as in this may spoil your mood):
McCourt will become a billionaire, and has to pay his wife Jamie less than $150 million from these riches -- the price she perhaps unwisely agreed to long ago during their divorce proceedings.
Next up: the bankruptcy court has to approve this deal, which is probably going to go smoothly.
Who'd say no to a check for $2 billion?
Update: Before the Magic Johnson deal broke, Natural Balance Pet Foods President Joey Herrick told LA Weekly freelancer David Futch that it was crucial that the team not be purchased by a non-L.A. group, a diplomatic way of saying "no Wall Street hedge fund kings."
Herrick also predicted, correctly, "It could go for $2 billion."
Herrick believed the leader was Steve Cohen of Connecticut, particularly since another billionaire, Patrick Soon-Shiong, the richest man in Los Angeles (worth $7.2 billion) -- and an adopted local, frankly -- joined the Cohen ($8.3 billion) group.
But as an L.A. native, Herrick said locals would better understand that "We don't want to tear down the stadium and move it somewhere else and have Chavez Ravine built into condos and housing. A couple of the groups that approached us said that's where they were going and we told them you've got the wrong guys."
The Magic Johnson group was not among the two groups who didn't know whether they wanted to play baseball -- or build condos.