Monday, December 28, 2009

Has the value of the Dodgers peaked?

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The Long Beach Press-Telegram's Bob Keisser thinks it might have. He writes:

If you wanted to buy the Dodgers today, how would you possibly squeeze another nickel out of the franchise? New TV money? Nope. The current deal runs through the 2013 season. Sell naming rights? That industry is in the pooper. Develop the adjacent land? That requires development capital and political blessing, neither of which is in great supply.
Demand a new stadium with taxpayer money? Find a new city willing to pay beaucoup bucks?
Let's not go there.
The answer, of course, isn't quite that simple. The problem with the Dodgers isn't their worth as an asset, it's how much of the asset's worth is tied up in debt. Keisser's article is full of fresh takes on the McCourts, the Dodgers, and Bud Selig, including an assertion that Selig has taken advantage of the small market clubs in his battle against the union. I recommend you check it out. 
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9 comments:

  1. http://www.presstelegram.com/ci_14075799?source=rss_viewed

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  2. Sorry about that guys, it's there now.

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  3. When the McCourts sell the team, the price isn't going to be set by McCourts, or the Forbes 2009 valuation. It is probably going to be more in the $450-$500 million range. The difference between the McCourts holding out for a better price like they try to do with their properties, and the Dodgers sale, will be that MLB will pressure the McCourts to accept a lower price.

    IMHO, any potential buyer for the Dodgers, has to be get the broadcasting rights wrestled away from Fox, so they can start their own cable station in the essence of YES, SNY, NESN etc. The Southern California market is too tempting to ignore or minimize revenue...

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  4. Josh, if an unfavorable court decision were to force Frank to sell the team, isn't that the worst case scenario because he might have to order a firesale of the players? That is, unless you're expecting a cut-and-dry sale.

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  5. If a sale of the team occurs, do you feel it would be necessary for the new owners to be from the area or do you think a solid ownership group from outside the area could/would make the fans more comfortable than what they currently have with the McCourts? What do you think would make it work for an outside group to purchse the team?

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  6. In response to Chris..

    I think any owner group has to have outside revenue from seperate businesses... I think being a local group helps, especially with hiring, and having their own people in the Southern California area who have the rolodexes to network for Front office talent and finance.

    I think the McCourts have tried, and succeeded better than the expectations when they bought the club in 2004, and they weren't complete failures, but they took on huge risks, and didn't have the compentency to continue their adventure owning a MLB club, especially one of the top market teams in MLB.

    Any new owner or ownership group that takes control of the Dodgers, are going to make mistakes, alienate some fans here and there, but as long they run a steadier operation than the McCourts, and spend their money wisely and have better credit with the banks, (Just my guess about that the McCourts have a shaky credit rating) They should be okay. If a new owner group runs the Dodgers, and are not so worried about their PR image as the McCourt, they should be in the right direction..

    Of course the best PR is the Dodgers having a winning record or getting to the World Series. In that case the McCourts haven't done a bad job, even though they still have an estimated $438 mil in debt from purchasing and running the team.

    I wouldn't look for a "white knight" like Eli Broad or Mark Cuban to sweep in and overpay for the Dodgers as Tom Hicks did for the Rangers about ten years ago now.

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  7. With respect to a firesale, I don't think clearing out the roster would be necessary. We're in a different era of how we view baseball--any savvy prospective owner will know that selling off the players for pennies on the dollar would be devaluing.

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  8. maybe that is what a new owner would want...to build his own team. Also, it would make a cheaper sales price.

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