LOS ANGELES (Reuters) - The group that paid a record $2.15 billion to buy the Los Angeles Dodgers baseball team expects to boost the return on their investment by creating value with stadium improvements, aggressive investment on talent and by exploring a regional sports network after a TV contract with Fox ends.
“It’s a lot of money, but if we do our jobs right ... the long-term point of view is that people will see that the value was there,” said Mark Walter, the team’s new chairman who is also chief executive officer of private equity firm Guggenheim Partners, at a news conference.
The investor group, which also includes Hall of Fame basketball player Earvin “Magic” Johnson, took control on May 1 after a 14-month drama that began with the divorce of former owners Frank and Jamie McCourt.
“Just because we paid a nice sum for the franchise, it doesn’t mean the fans will (have to) make that up,” said Johnson at the news conference in announcing the new owners had cut general parking fees from $15 to $10.
The Dodgers have a broadcasting agreement with News Corp’s Fox through 2013, giving owners - once the deal expires - a big opportunity to either launch a regional sports network in the country’s second largest market or to hold an auction for those future television rights, estimated to be worth $3 billion.
Hollywood producer Peter Guber, another partner in the investor group and CEO of Mandalay Entertainment Group, told Reuters the team will explore all opportunities once the Fox deal ends, when asked if it would consider launching a regional sports network.
“Every opportunity will be explored to make it the best return on our investment,” Guber said.
Teams like the New York Yankees have launched their own networks that turned out to be very lucrative because of the monthly fees they generate.
Johnson, a successful LA businessman who starred with the Los Angeles Lakers, was recruited by Guggenheim as a link to local fans. The investor group also includes Stan Kasten, who ran both the Atlanta Braves and Washington Nationals franchises. Kasten said the new owners would assess what was needed to bring 50-year-old Dodger Stadium “into the 21st century” and that the new owners would write more checks midyear for players if needed.
“We intend to be aggressive,” said Kasten.
The purchase was completed on May 1 after Major League Baseball unsuccessfully tried to delay it, arguing in bankruptcy court the league did not have complete details of the agreement.
Guggenheim was selected by Frank McCourt on March 27, hours before the Dodgers owner said he would conduct an auction in New York among the three remaining teams of bidders.
McCourt put the Dodgers into bankruptcy in June 2011, claiming baseball commissioner Bud Selig forced a cash crisis by rejecting a new TV contract with Fox. The Dodgers, which finished third in the National League’s west division last year, currently lead the division with a 17-7 record.
Editing by Phil Berlowitz