Principal owners

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Rockies at Dodgers, 1:05 p.m.
Dee Gordon, SS
Mark Ellis, 2B
Matt Kemp, CF
Andre Ethier, RF
Juan Rivera, DH
Jerry Sands, 1B
Scott Van Slyke, LF
Juan Uribe, 3B
Matt Treanor, C
(Chris Capuano, P)

The principal at my kids’ elementary school seems to me quite different than the principals I had in elementary school growing up.

No. 1, she seems fun and caring and truly looking out for the kids. The principals I had might have been looking out for the kids, but behind their stern demeanor, I couldn’t really tell. My first childhood principal had switches mounted on the wall behind his desk, and I don’t mean light switches.

This relates to my feelings about impending new Dodger ownership and whom we, as fans, might have running our schoolyard.

* * *

Forbes: “The bidding groups for baseball’s bankrupt Los Angeles Dodgers appear to have been whittled down to five from seven tonight.”

  • http://www.twitter.com/ElJefedor Jeffrey Thomas III

    It’s really shocking to see all those people bidding over a billion dollars for the Dodgers but yet not one of them is attempting to purchase the parking lots. Really hinders my excitement about new ownership.

    • Anonymous

      The first sign we will see as we approach the Stadium might be WELCOME TO McCOURT PARKING LOTS

  • Dave Alden

    Jon, you seem truly nonplussed by the process.  Honestly, I’m feeling the same.  It’s great, beyond great, that a change is coming, but I’m tired of the drawn-out schedule.  Plus, I’m concerned that the price keep climbing.  A higher price means a need for larger net revenues to service debt and provide an internal rate of return.  Which could impact the budget for the on-the-field product.  Also, the failure of the sale in San Diego sets out warning flags.  Perhaps the Dodger sale will be similarly becalmed.

    It’s spring training and I’m enjoying baseball.  Wait me up when the franchise purchase drama is over. 

    • Anonymous

      Wake up, the alarm has gone off and we are now on snooze.

  • http://www.dodgerthoughts.com/ Jon Weisman

    I don’t believe there’s a correlation between the purchase price and the player payroll. I just think there are potential owners who prioritize one way and those who do another way.

    • Dave Alden

      I’ve worked in support of many acquistions of income property (apartment complexes, trailer parks, retail stores) where a new buyer paid a much higher price that the previous buyer.  To cover the debt, he had to raise rents, causing great gnashing of teeth.

      If the Dodger sale is mostly equity, which would be a good thing, the new owners could adapt to a higher acquisition price by accepting a lower IRR, which would also be a good thing.  But everything else being equal, I believe Dodger fans would be better served by a lower price.

      • http://www.dodgerthoughts.com/ Jon Weisman

         I’m not saying I prefer a larger purchase price or that it’s insignificant. I’m just saying you can’t draw any conclusions about the future on-field product based on the purchase price. The purchase price itself doesn’t even speak directly to the level of equity invested.

        The TV rights money coming into the Dodgers, combined with the whole McCourt effect makes this sale unlike any in L.A. sports history, I’d say. I don’t think there’s a useful precedent.

        • Dave Alden

          We’re in agreement.  The purchase price wouldn’t be the sole determinant of player budget.  Also important will be the broadcast rights you note, the willingess of the owners to take a lower IRR in exchange for the fun of being in the playoffs, the development of other revenue streams, etc.  And yes, I can’t think of a single meaningful precedent, which the $1.5B price range demonstrates.

    • Anonymous

      Artie Moreno seemed to be able to spend the difference in purchase price between the Angels and dodgers on payroll though.

  • http://underdog.typepad.com/ underdog

    I’m going to hedge my funds, er, bets, and pick against Cohen as owner.  

    Go Magic, go! 

    • Anonymous

      Agreed. Magic group is my 1st choice (although what do I know??!!)

  • Anonymous

    I would like to think that the nuns, rulers in hand, cared about us in some way, back in the day.

  • Anonymous

    Wow 1.6B without the parking lots. Will be interesting to see how it all plays out, but not much us fans can do!

    • Anonymous

      Its not like they were ever considered good parking lots–everybody complained about them.  The parking lots might be where most of the liability cost is as well.

      • Anonymous

        The parking lots were considered state of the art in 1962. Back then, people wanted to drive everywhere. 
        And there was still quite a bit of traffic in L.A. And three times as much smog. 
        (The last figure is made up. I will assert that L.A. was far smoggier in 1962 than it is today.)

        • Anonymous

          67% of all statistics are made up on the spot.

  • Anonymous

    It’s still hard to believe our Dodgers are bankrupt.

    • Anonymous

       Not for much longer, I don’t think.

  • http://pulse.yahoo.com/_7PNAFNXM7T73BGEJ4GML6UCTC4 scottF

    1.6 billion doesn’t = 90 million dollar payroll. Mccourt was broke or using the cash for his houses. They bidders own more then 1 company and are flush with cash and good credit.

  • http://www.dodgerthoughts.com/ Jon Weisman

    This will be the game chat thread. 

  • http://pulse.yahoo.com/_7PNAFNXM7T73BGEJ4GML6UCTC4 scottF

    I expect changes and changes come when new owners have a different vision. Right now the team get 40 million from TV which is poor for a big city and a #2 market.  The next TV deal could be between 2billion & 6billion. Which would get 150 million a year just from TV.
    Problem is the good free agents are few & fewer.  I hate to get stuck with a Veron Wells type of contract thru trades.  So money is not great, but it will help.

  • Landon Kelt

    The sickening part about all of this is that McCourt is actually going to make out on the deal.  After leveraging our Dodgers into bankruptcy in order to pay for his multiple mansions, netjets, salaries for his entire family and everything else, I was looking forward to him barely coming away with anything after he paid Jamie off.  Now it looks as though he can pay off his debt, pay off his wife, and still come away with a huge chunk of change AND control prime real estate in downtown Los Angeles.
    I just cannot see how anyone can make the math work to pay $1.6B and not get the parking lots… but then again there is a reason these guys have that kind of money and I do not – the ability to make this sort of math work.

    • http://www.dodgerthoughts.com/ Jon Weisman

       Don’t take this as an endorsement of not buying the lots, but with a TV deal worth approximately $4 billion by itself, doesn’t seem like the difference of a few hundred million on the purchase price would make or break the new owner, even without the parking lots.

      • Landon Kelt

        I suppose you are right.  The Angels media rights deal really was the game changer McCourt needed.  As recently as 6 months ago estimates were pegging the value of the franchise at a little over a billion – and that included the stadium and real estate.  Still, it seems crazy to me that with McCourt’s history you let him have power over such a vital part of your shiny, brand new toy.

  • Anonymous

    This may be an old/answered question: Even though McCourt would hold the lease to the parking lots, does that mean he would actually ‘control’ the lots as well? I thought I read somewhere that even though McCourt would get a $14-16M lease payment for ’use’ of the lots, that he technically wouldn’t be in control of the prices, upkeep, improvements, etc of the lots.  

  • http://www.dodgerthoughts.com/ Jon Weisman

    The Dodgers’ hot streak is hitting a cold wall so far.

    • Anonymous

      freshly brewed as cold as the rockies :)

  • http://www.dodgerthoughts.com/ Jon Weisman

    Van Slyke’s triple is followed by a Uribe strikeout. 

  • Anonymous

    Uribe already in mid season form!!!!

  • Anonymous

    Re: Sale Price/Salaries — These seem to have very little relation to each other.  When McCourt bought the team in 2004, it was the second-highest sale price in baseball history (number 1 being the Red Soz a few years earlier).  Those teams went two different directions in terms of salary.  The O’Malley sale price of $311 Million was, I believe, a record at the time, and not a lot of money was spent there.  The biggest factors are likely the degree to which the team is leveraged (McCourt was heavily leveraged); the TV revenue (gate used to be the big factor–today, it’s TV money for a lof of reasons; to be fair to McCourt, he was handled essentially a crippled local TV deal, since Fox had bought the team mostly to asure its TV rights, and made itself a sweetheart deal before selling; if the McCourts were not divorcing, there is a good chance they could have ridden out the storm until they got a new TV deal at the end of the year); and the willingness/wherewithal for the owner to spend money on the team (for all of his flaws, and they were many, George Steinbrenner was willing to spend unholy sums on the Yankees payroll, all in pursuit of winning world championships; it is hard to imagine Donald Sterling be willing to open up his checkbook, even while being the 293rd richest man in America.

    Re: Parking Lots — I believe that the deal with MLB requires that he lease the lots to the team to use during the game days.  That deal would have to be negotiated, but it is hard to imagine putting a price that is anything other than a percentage of the parking revenue.  That requirement also would theoretically mean that the lease (which would have to be an easement that ran with the deed to the Dodger Stadium property) would have to include certain assurances about spots, organization, etc.  “Control” would have to be effectively controlled, in some why or another.

    In the normal course of things, this seems like an incredibly stupid way to manage property–both for the lessor (the Dodgers) and the lessee (McCourt).  All the development that McCourt might want to tdo would be subject to check by the team, while all the uses of the lots by the team would be at the mercy of McCourt.  It is really a dumb proposition for the new owner to buy the team, and the stadium, but not the parking lots.  And it is unfortunate that MLB allowed this.  Clearly, Caruso and Torre were begging with the Commissioner’s office to step in and apply pressure–and it seems that they have failed to do so.  Yet another failure.  Even worse, the going price looks to be so high that McCourt will come away with a lot of money after paying off his debts and paying Jamie that he won’t be scroungind around for another $100 Million for the parking lots.  (One might think that he will even have a nice cash stash to use to develop the lots–but his history as a parking lot attendant in Boston suggests tat he never actually develops the lots.  This may change if Kroenke is part of the picture and trying to flip the while thing into building a Rams stadium in Chavez Ravine.  [I should note–even though I am only a marginal football fan, I always liked the idea of a football stadium in Chavez Ravine–the Football Dodgers.  I don’t like the Rams being involved {they stink}, I don’t like Kroenke being involved {he helped move the Rams to St. Louis after Anaheim and LA would not be blackmailed into building a stadium, and if the Rams move, it will be because he is unable to blackmail St. Louis into building him a stadium}, and I particularly don’t like this idea because it seems to inevitably involve McCourt involving himself {a problem for which I do not think I need an explanation here}

    • Anonymous

      Way to go 
      leekfink

      • Anonymous

        If a parking lot tree falls on stadium property whose responsibility is it to have it moved?

        • Anonymous

          Probably the stadium’s–you think McCourt is going to take responsibility for anything???

  • Anonymous

    I like the look of Fife.  He seems to have good stuff.  Is he projected to be on the 25 man roster any time soon?

    • http://www.dodgerthoughts.com/ Jon Weisman

      I don’t think this year.

  • Anonymous

    Is he considered a high ceiling prospect, like some of our other young arms?

  • Ari Polychronopoulos

    Am I the only one who doesn’t seem to think that Cohen wouldn’t be a bad owner. The other ownership groups are essentially trying to purchase the team as a business, while Cohen seems to be purchasing the team as a hobby and because he likes baseball.  I’m a lot more interested in having an owner who is primarily a baseball fan and is buying the team for that reason. They are also less concerned about making money out of the venture. I also view Cohen’s divorce troubles as very different than McCourt’s. Cohen divorced his wife over twenty years ago, and she is essentially suing him for more money because he is much richer now than when they divorced. She also hasn’t worked a day in her life since the divorce and wants him to continue supporting her. All the divorce drama seems to be coming from her side…the only thing that is really concerning is the SEC investigation, but in all seriousness, if history serves us correctly, he probably have to end up paying a fine that is far less than the profits he made from his illegal activities.

    Malcom Gladwell wrote a piece from on Grantland about NBA owners and how they purchase teams solely becasue they’re fans, not as a business venture.

    http://www.grantland.com/story/_/id/6874079/psychic-benefits-nba-lockout

    • Anonymous

      While I haven’t read below as yet, I can immediately tell you that you are not the only one. I will even go farther to point out that Cohen employs, I have read, 180 money managers. I’m confident these people are compensated based on performance thus creating an incentive to trade on illegally obtained information but this is true at mutual funds as well just the level of compensation is not as great. SAC said  about 2 who pleaded guilty “We are outraged by the alleged actions of two former employees, which required active circumvention of our compliance policies and are egregious violations of our ethical standards……They were employed at SAC for a short time and were dismissed in January 2010 and June 2010, respectively, due to poor performance.” This year one current technology analyst for a division of SAC was arrested. We will, of course, see what comes of that. For the above post to assert that Cohen has engaged in illegal activities is merely a leap based on little if anything.

    • Anonymous

      But the story you posted seems to illustrate the downside of having a owner who is a fan.  Or am I missing something?

    • Anonymous

      I really disagree with this–for so very many reasons:

      1)  Cohen may be a fan–but he’s a Mets fan!  Why not have a Giants fan buy the team?  Or a Red Sox fan (oops, tried that).

      2)  Cohen runs a hedge fund.  He is not Paul Allen who made it rich in Microsoft and is indulging his hobbies.  He is not Arte Moreno who made it big in the billboard business, and decides he wants to spend his time on baseball.  Hedge funds look for profits.  Ruthlessly.  And without getting into a value judgment, they are not known for being benevolent owners–they are more like Richard Gere before he meets Julia Roberts.  Now, Cohen might be different–he might have an interest in running a baseball team; he might not break it down like a lot of hedge fund assets.  But based on his background, there is not a reason to think he is going to be a great owner.

      3)  Re-read the Gladwell piece (and, just generally, re-read anything by Gladwell, he’s good).  He is not suggesting that sports owners be rich guys who are looking for a hobby–he is saying that owners far too often forget that a big part of the reason they own the teams is because they get to have a trophy franchise.  In fact, his article points out two really bad owners–Tom Yawkey and Dan Snyder–who owned their teams solely because they wanted a play-thing; but he also references two effective owners who run their franchises as effective business operations–Robert Kraft of the Patriots and Mark Cuban of the Mavericks.  I think Dodger fans would be thrilled to have either of these people as owners.  And there is one more owner who ran their sports franchise primarily as a business–and for 47 years, it saw the Dodgers earn 13 pennants and 6 world championships.

      • Anonymous

        leekfink, can you support your claim that Cohen is a Mets fan? 

        • Anonymous

          The Wall Street Journal described him as a “longtime Mets fan” and friends of the Wilpon family year ago when he was pursuing a minority interest in that team.  http://online.wsj.com/article/SB10001424052748704336504576259371968484738.html

          This fits with everything else known about him.  As is well known now, he is finally buying a small share in the Mets.  He is a native New Yorker, who still lives there.  If he were ten years older, I could believe he might be an old Brooklyn Dodger fan.  But he was born in 1956, the year after they finally won the World Series, and probably was not conscious of baseball until after the Dodgers moved, and was five years old when the Mets started playing–right about the time kids start following baseball–and was 13 when the Amazin’s won the World Series–also perfect timing.

  • Anonymous

    I’m sure I’m in the minority on this, but I actually prefer an owner who will keep the payroll relatively low. If I had my druthers, I’d peg the salary to right around the league median. I think it’s more fun to root for a team that “keeps it real.” 

    More than anything, I’d like an owner who has a similar philosophy about building a team as I have, as reflected in the GM he hires. I was perfectly happy with McCourt when he hired DePodesta. On the other hand, I’ve been in baseball fan hell ever since Colletti was hired. 

  • http://www.dodgerthoughts.com/ Jon Weisman

    NPUT