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Magic Johnson Did Not Buy the Dodgers

The Dodgers were bought by Guggenheim Baseball Management, which is owned mostly by Guggenheim Partners, and includes Mark R. Walter as its controlling partner, as well as Earvin “Magic” Johnson, Peter Guber, Stan Kasten, Bobby Patton and Todd Boehly as limited partners.  Magic Johnson is simply the front-man and has very little skin in the game.   He could be replaced tomorrow.

Guggenheim is in the business of making money, and lots of it!  We really don’t know the details of the purchase – we do know that they overpaid for the team, something which does not surprise me in itself, but as a Dodger fan, I am not elated.  I am very worried for the moment.

Stan Kasten has a wealth of experience, but he’s a lot like Bill Polian of the Indianapolis Colts and Buffalo Bills was – He can get close, but don’t count on winning it all very often.  Maybe that’s OK.  I remain hopeful but skeptical of the deal.

I’ll leave you with this as I am on a family vacation in Myrtle Beach, South Carolina:

If you think Frank McCourt took a lot of money out of the Dodgers, you ain’t seen nothin’ yet!  They could take out more in a month than McCourt took in a year!

 

About Mark Timmons

When you see the invisible, you can do the impossible!

41 Responses to “Magic Johnson Did Not Buy the Dodgers”

  1. DRomo says:

    I think most people who read this blog understand Magic is the front man of a group. Much the same as Nolan Ryan is the front man for a group who own the Rangers.

    The point is he has credibility in LA. He can bring fans back. Stan Kasten can bring credibility back to the front office/scouting and development. Guggenheim, Guber, etc. bring the deep pockets and the flexibilty to allow this franchise to grow while waiting for the TV deal that will I am sure be a record breaker as well in 2014.

    The thing to watch here (in my opinion) is Magic’s relationship with AEG. AEG took a downtown area of LA that was as beaten down as the come around the Convention Center and turned it into a thriving year round destination. The surrounding properties of Dodger Stadium are ripe for the same revitalization. I have no doubt there is a plan for the same development here. I also have no doubt that this is why Frank wanted some stake in the development opportunity here. Some may be pissed that he gets this opportunity but who cares. His small part is not going to affect us (the fans). The bottome line is Frank is gone. New owners are here and the re-birth has begun.

    The future is brighter!

    • Mike Dixon says:

      Exactly Romo…I’m beyond relieved right now….Mark’s over here pissing in the punch bowl…

      • Mark_Timmons says:

        Mike,

        A few days ago when I said the Dodgers could fetch over $2 Billion you said this:

        “$2.1?….not even close….even if the new owner makes $100 mil a year off the Dodgers it will take 21 years to make his money back….not a wise investment…these guys are not billionaires by being dumb…..I’d say it will be closer to $1.5 and that is still a ridiculous number….”

        Well, they paid it – just like I said. Now, explain to me how they get paid. I’m not sure it’s a bad move, but I need to see their plan. That’s all. Maybe they will be great owners. We just don’t know right now!

        • Mike Dixon says:

          I said you were right in the other thread….

          • Mike Dixon says:

            You also said Steve Cohen will be the new owner, and that Andrew Lambo was the second coming, and that the Dodgers would win 93 games last year and Juan Uribe would hit 27 HR last year and that Bills will come in second in the MVP race last year, and that Bills would win the Cy Young, and that Chris Capuano will win 20 games this year…shoot I can go on all day…

  2. DodgerDude says:

    Mark is simply saying we shouldn’t get all excited yet. I understand that the owners are going to want a lot of money repaid to cover the purchase. He’s saying that we should wait and see but I am also cautious about corporate ownership.

    • Glass Half Full says:

      Geez………When are we allowed to be excited?…It’s been too long…Give me a break…I am excited and I don;t give a hoot who isn’t excited…..

      Maybe it’s time to switch sides and become an Angels fan….oh wait…..ain’t going to happen!

      We all knew Magic was the front man…

      • Mike Dixon says:

        Exactly what I was saying…today I am exited that a group led by Magic Johnson is the new owner of the Dodgers….that McCourt is finally gone…Mark saying he needs to see their plan…what?….you think these guys paid 2.1 to put some scrub team on the field…these guys will look for the best players every off season…no doubt about that…..and when they get that TV deal forget about it….look at Texas…look at the Angels, they are are spending big cause they know they have that TV money coming in a couple of years….

        • Glass Is Half Full Again says:

          It is hard to believe that a group of investors would spend 2 billion dollars with the intention of putting a mediocre team on the field…makes no sense at all…You are right about the Angels….new cable contract landed them the 2nd best player in baseball (we have the first best)….

  3. Buck Dodgers says:

    Thank God, the McCourt stank has been washed out of the bowels of the stadium. I think you can expect to see a YES style media giant to emerge in 2014. I like that thought, worked for the Yankees, didn’t it?

    You guys nailed it, Romo and Mike Dixon. Mark you are missing the boat.

    • Bob says:

      There is no boat. You are assuming a lot of things. Mark is simply saying that the new owners are going to want to be paid back and are going to need a lot of capital to cover that. He is saying what we all know – that corporate ownership is usually not good.

      He said he is hopefully but skeptical. How is he missing the boat!

      Get your facts first. You don’t know and neither does he, but he admits it. You just want to be all ga-ga without being confused by the facts. That’s very silly.

      Like others have said, Mark was right about McCourt not destroying the Dodgers, increasing their valve and even about the sale price (though he did have the wrong party winning, but I can see why).

      I would think that some of you should have learned your lesson by now and pay attention to what he says, because you look stupid later.

  4. Jae says:

    Don’t forget that Mark also predicted that the price might be $2 billion.

    Mark has also said that Frank has increased the value of the Dodgers immensely and he has said it for years while many of you have disagreed.

    Sooner or later, you might note that he has been right more often than not.

  5. Mark_Timmons says:

    I just try and balance out the Kool-Aid drinkers from the facts,

    • Glass Is Half Full Again says:

      Enough of the Kool Aid drinker crap Mark…come on man…you are better than that!

      Forgive some us for getting excitied about that sliver of sunshine that is finally peaking thru those dark clouds that have been hanging over Dodger Stadium for all these years….

      I for one am not going to apoligize for being a little excited..

      Kool Aid rocks!

  6. Gonzo says:

    From the Wall street Journal:
    The bid was described as a “100% cash offer.” Mr. Walter is making a significant personal contribution to the purchase price, with Guggenheim Partners, of which he is chief executive, playing a substantial role in financial contribution.

  7. DRomo says:

    Whenever you hear someone say “Kool-Aid drinker” walk the other direction. An unoriginal phrase that is repeated when someone thinks “they” are the ones with an original thought. But the question is, if you are repeating the same tired phrase aren’t you the Kool Aid Drinker? Many thought Cohen had the inside track (including me). Many of us were wrong. Turn the page.

    Also I love how us dorks all think we have more business savvy than the Guggenheim group, Magic, Guber, etc. “It’s a bad buy…” Really? These billionaires are in the situations they are in because they didn’t take a baseball bloggers opinion, right? Too funny.

    Can someone else have an opinion, Mark? “I try and balance out the Kool Aid drinkers from the facts” HAHAHA Let me clean up the water I just choked on at my desk while I was laughing so hard!!

    Yawn!

    Sincerely,
    The Kool Aid man

    • Mark_Timmons says:

      Romo,

      I am not going to try and be politically correct about this. I am just going to say it:

      Sometimes you have some really good takes and other times you take total leave of your senses. I have never said anyone in this deal was a bad guy, nor have I said that I have the only idea about this. You have made all of that up.

      Don\’t put words in my mouth. I merely see everyone feeling all giddy and I hope we all are at some point, but you drink Kool-Aid when you buy into something you don\’t know a lot about.

      Criticize what I write – that\’s OK, but don\’t make stuff up. That pisses me off!

      I was right about a lot of things – I was wrong about who would win. That\’s obvious. I HAVE moved on. I just want to see how it shakes out. That\’s all.

    • Kayla DeAngeles says:

      Please pass the KoolAid, Romo. Finally, a flavor I can enjoy and even savor.

      McCourt is like a barnacle that adheres like cement. We have scraped off most of the barnacle finally. I will toast to that hard-won accomplishment with some delicious TrueBlue KoolAid. Eventually, we will scrape off what remains of the barnacle known as Fwank McCourt.

      I also console myself, knowing whatever cash McCourt acquires from his devious dealings, he owes a ton and more to his many legal debacles and the loans with which he originally bought the Dodgers. I’ll also thrown in an additional FIE! on Bud Selig for approving the sale originally. It’s past time for a new commish, one with integrity and a spine.

      You know darn well, Mark, what has saved the Dodgers are the unsung heroes working within the organization — with great forbearance, I might add — to keep it alive and somewhat thriving. And, as for KoolAid, the game of baseball itself is my preferred flavor.

      • Mark_Timmons says:

        I agree with most of what you said, but evidently Frank didn\’t taint the product too much. I mean – it was sold for over $2 Billion.

    • Glass Half Full says:

      Right on..pass me the Kool Aid…I’ve been thirsty long enough….

  8. Butch says:

    the $$$$ to be made will be from future tv rights and related contracts and from the developement of the Area in and around dodger stadium

  9. Leroy says:

    Does anyone think there is any possibility of them tearing down Dodger Stadium and building a new stadium somewhere else (downtown)?

  10. Bill Russell says:

    Rather then fuss in here with one another, we should all be jumping up and down with joy. The end of McCourt is finally here. God Bless us all……………………..

    • Mark_Timmons says:

      I hope so, but Guggenheim will have to be paid and they still need to spend a lot of money in this deal. Are they willing to do that?

  11. Ken says:

    The more that I think about this deal the more that I LOVE IT!!

    If the Dodgers segregate the land into non-baseball entity (which they have), then Frank can be the lender of up to $500 mil? to develop the property along with additional millions from the Guggenheim Insurance companies. None of this Debt will effect the MLB Debt to EBITDA compliance formula. Both Frank and Guggenheinm will make additonal money thus helping to make the Insurance Commissioners not concerned about risk and diversification!!

    When the Dodgers rehab the Stadium with debt, that new Debt does NOT count as Debt under the MLB CBA and therefore does not allow Bud any control over finances regarding player personnel decisions.

    Having a prominent Producer as an investor strongly implies that the Dodgers will start their own Cable TV Network by 2014 and therefore have an even higher level of EBITDA then if they sign a new deal with FOX. At a minimum this management team creates great leverage in negotiations with FOX and Time Warner, et. al. resulting in enough additional EBITDA to distribution $50 – $75 million a year to Crazy Guggenheim. Guggenheim Insurance Companies may ned to sell the entire Dodger asset poprtfolio in ten years. This $2.15 billion investment can turn out to be much better than the return a 10 year US Treasury Obligation.

    Magic put together a great team that provides hope for a possible great future.

    • Kris says:

      Ken,

      Could you explain to me and the rest of us non-financial wizards some background above? I assume MLB CBA = MLB Collective Bargaining agreement, how does this affect the financing issues you laid out? Also WTF is EBITDA?

      Just curious……

      • Ken says:

        Under the MLB CBA, Bud and staff monitor the Debt to “Earnings Before Interest Taxes Depreciation and Amortization” or Frank and Enron’s definition “Earnings Before I Tricked Dumb Accountant”. :) Certain Debt, as defined in the MLB CBA, is not supposed to exceed 8 times the last two year average EBITDA. If the multiple is hirer than 8 then Bud and staff start to monitor the Team’s finances and operations. Under the MLB CBA not all Debt is defined as Debt, like the upcoming Dodger Stadium construction improvement costs, and player deferred compensation. Having no “Debt” defined as “Debt” keeps Bud out of the operations of a team and the Dodgers can lose money by buying players if they want to.

        However, Insurance companies have annual requirements to hire auditors and actuaries prior to filing annual reports with the insurance companies domiciled state’s Insurance Commissioner’s Office. So the Guggenheim investment in the Dodgers will be subject to annual review of personnel hired by the insurance company and employed by the Insurance Commissioner’s Office. Therefore, you can expect the Dodgers to be distributing more to the insurance company than the Dodgers did in the past to Frank.

        The key to this deal is the new Cable TV Channel or a $5 billion TV Contract over 20 years.

        Expect the Insurance Company to make construction loans and Bridge loans, matching Frank, to build Frank’s planned retail and residential developments when Guggenheim demands feasible.
        If structure correctly this Debt will not count as team Debt and will not effect the Dodger team operations.

  12. Bob says:

    I will echo what Mark is saying: Don’t get your panties in a bunch and don’t cut your wrists – let’s see how it shakes out.

  13. DRomo says:

    Ken has it right. Magic has a good team. Magic is a great face to bring credibilty back to this franchise in the community. If Cohen wins the bid tomorrows papers are “Who is this guy?” We have another breaking in period.
    With Magic we have a guy who has dedicataed 30+ yrs to this community. We know what he is about. We know he has a track record of succesful business ventures. Am I wrong?
    That is why fans are happy and excited.

    Mark,
    So you label us Kool Aid drinkers? Am I right Mark? Did I make that up? You have no idea what I do and do not know about. I could pick apart MANY things you have said and tell you that you have no idea about. Like living in California and what it feels like to have a sense of civic pride in the Dodger franchise on today (3/28/12). The stigma that being a Dodger fan has carried with it. The need to put a respectable face on that franchise and make us all be happy again. Do you know what it feels like when you wear Dodger gear in Southern California and everyone wonders why you support a gang culture? Do they ask you that in Indiana? No longer do we hear Dodgers/McCourt/Brian Stow all in the same sentence. It is Dodgers/Magic Johnson/Re Birth. That makes me happy. That is what people in Southern California are talking about. That is what Dodger fans are talking about today.

    But maybe thats the Kool Aid talking.

    • Mark_Timmons says:

      So you label us Kool Aid drinkers?

      NO – Again, that is not what I said. READ what I wrote.

      Am I right Mark?

      NO YOU ARE WRONG – READ!


      Did I make that up?


      Yes, you did.

    • Glass Half Full says:

      My “glass is half full” of Kool Aid and it tastes damn good!

    • Mike Dixon says:

      Great post DRomo..I like when Mark says: Magic Johnson is simply the front-man and has very little skin in the game. He could be replaced tomorrow….no Mark, you cannot replace a Magic Johnson

      Magic is as beloved as Vin Scully is in L.A so I wouldn’t guess some guy from Indiana would know anything about sports culture in L.A…people here are thrilled that the Dodgers are owned by one of us…

      • Bob says:

        The Dodgers aren’t owned by one of us. Magic is just the front man. If it makes you feel good, I guess you can say it, but Magic does not own the Dodgers. He is simply a limited partner in a group controlled by Guggenheim Partners.

        So be thrilled…

        • Mike Dixon says:

          The ownership group, led by NBA Hall of Famer Magic Johnson and former Atlanta Braves and Washington Nationals president Stan Kasten, reached an agreement late Tuesday night to purchase the historic franchise for $2.15 billion from owner Frank McCourt. It’s the largest price paid for a sports franchise, and nearly three times the previous MLB record of $845 million for the Chicago Cubs in 2008.
          “I’m feeling pretty damn good, it’s indescribable the pride you associate with the brand of the Dodgers,” said Kasten, who told USA TODAY that he will be CEO and president while Johnson and Mark Walter, CEO of Guggeheim Partners will be the owners. There are no TV partners in the ownership group, Kasten said, with potential media rights worth $5 billion in 2014.

          Nice try though Bob….

  14. Mark_Timmons says:

    I get all the rest and I might be happy too when I can dissect all the facts.

    If you think it’s tough being a Dodger fan in California, try Indiana. You’ll find out what real persecution is.

    Oh, and I will tell you that the gang stuff will go away when ticket price increase dramatically… which they will.

  15. Bill Russell says:

    What gang stuff? I guess where I sit I don’t see it or run across gang stuff.

  16. Bill Russell says:

    People in L.A. will pay more to see a good product on the field. If Magic builds it, we will come.

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