Monday, January 23, 2012
Updated: January 25, 12:34 AM ET
Deadline for Dodgers bidders passes
By Tony Jackson
Although the less-than-rigid deadline for submitting initial bids to buy the Los Angeles Dodgers came and went Monday, there still was little information available that would hint at who will emerge as the franchise's new owner.
Frank McCourt, the team's owner for the past eight years, must sell the team no later than April 30 under an agreement with Major League Baseball.
The Blackstone Group, the global investment firm that is handling the sale for McCourt, was expected to receive somewhere in the neighborhood of 20 bids, although one source close to the situation said that number could vacillate.
As the deadline passed, there were only three confirmed bids:
• Dennis Gilbert, the Beverly Hills insurance agent and founder of the Beverly Hills Sports Council who also serves as a special assistant to Chicago White Sox owner Jerry Reinsdorf, confirmed that his group, which is largely financed by Imperial Capital chairman and chief executive officer Jason Reese, placed a bid.
• Joshua Macciello, CEO of ArmItal Sports Inc., issued a news release through his company stating that he also had made what Macciello characterized in that release as "a more than fair and considerable offer to both Frank and Major League Baseball."
• The group led by former Dodgers greats Steve Garvey and Orel Hershiser confirmed it had placed a bid.
Also, a group headed by Los Angeles Lakers legend Magic Johnson and primarily funded by Guggenheim Partners chief executive officer Mark Walter placed a bid, according to a source close to that group who spoke on the condition of anonymity.
In total, there were more than 10 opening bids, the Los Angeles Times reports, citing an anonymous source. Among those who got their bids in before Monday's deadline were: Dallas Mavericks owner Mark Cuban; St. Louis Rams owner Stan Kroenke; hedge fund giant Steve Cohen; former Dodgers owner Peter O'Malley; developer Rick Caruso and Joe Torre; investor Stanley Gold and family of the late Roy Disney; and Dennis Gilbert, Jason Reese and Randy Wooster, according to the Times.
Former YES Network chief executive officer Leo Hindery was also among the bidders, a source told the AP, speaking on condition of anonymity because the bids were to remain confidential.
Former Dodgers general manager Fred Claire -- who has been linked to a group that includes Bay Area sports consultant Andy Dolich, a former high-level executive with the Oakland Athletics, Golden State Warriors, Memphis Grizzlies and San Francisco 49ers -- declined to say whether his group had submitted a bid, citing confidentiality agreements all prospective bidders signed when they received bid books.
Several other prospective bidders either couldn't be reached or didn't immediately return phone messages from ESPNLosAngeles.com.
Although the passing of the deadline represents a significant step in the sale process, it isn't necessarily a major one. For one thing, additional bids are welcome even with the deadline having passed, according to multiple sources with knowledge of the situation. For another, even the groups that placed initial bids aren't set in stone, as there could be merging of groups, individual movement among groups and individual additions or subtractions within a specific group.
Two bidders said talks about possible group mergers were ongoing. They both spoke on condition of anonymity because Blackstone Group made them sign nondisclosure agreements.
"It would be a shock if they don't start talking merger," said Marc Ganis, president of the Chicago-based consulting firm Sportscorp, which is not involved. "I think we'll get a half-dozen parties that are actually in the bid, plus or minus one."
What the passing of the deadline does mean is that the weeding-out process can now officially begin. This initial phase will involve eliminating candidates whose bids simply aren't competitive. Once that process is complete, Blackstone will submit its list of remaining candidates to Major League Baseball for a vetting process that already is under way in a preliminary sense -- MLB already is looking at all candidates who were given bid books -- but at that point will intensify.
There is no deadline for the submitting of those candidates to MLB, although the April 30 deadline for completing the sale -- and the April 1 deadline for selecting the owner and ownership group that ultimately will get the team -- necessarily means the process will move comparatively quickly.
One source in the Dodgers' camp said McCourt views the April 30 deadline as rigid, but baseball commissioner Bud Selig said two weeks ago at MLB's quarterly owners meetings that he feels confident the sale will be completed on time and that "I think we're on track," both characterizations that seemed to allow for some wiggle room.
There also is a question as to how many candidates Blackstone must submit to MLB for vetting. Two sources, including one from MLB, said the maximum number is 10, but a source on the Dodgers' side was unaware that any such figure was in place.
If MLB rejects a candidate submitted by Blackstone and McCourt disagrees with that rejection, he has the right to have the matter decided by a mediator.
Once MLB completes its vetting process, the list of remaining candidates will be turned back over to McCourt, who then presumably would sell the Dodgers to the highest bidder.
The actual cash paid in a sale figures to be depressed by the team's debt, which stands at $573 million, according to a filing in U.S. Bankruptcy Court last Friday. Because of the debt, the price might not top the record price for a baseball franchise, the $845 million paid by the Ricketts family for the Chicago Cubs in 2009.
According to a disclosure statement filed Friday with the team's reorganization plan in the bankruptcy court, the Dodgers are $573 million in debt: $368 million with Dodgers Tickets LLC, $150 million with Los Angeles Dodgers LLC and $55 million with Dodgers Club Trust. All three are subsidiaries of the team's parent holding company.
Much of the purchase price figures to be used to pay down the debt. Of the money left over, McCourt must pay a $131 million divorce settlement to Jamie McCourt by April 30 and will have substantial capital gains taxes. He bought the Dodgers, the ballpark and 250 acres of land that include the parking lots from the Fox division of Rupert Murdoch's News Corp. in 2004 for $430 million.
While the parking lots and land surrounding Dodger Stadium are not included in what initially is being offered for sale, bidders are likely to want those as part of any deal because they wouldn't want to acquire the team and then have McCourt as landlord of the surrounding property. Whether the land is included will affect the purchase price.
Tony Jackson covers the Dodgers for ESPNLosAngeles.com. Follow him on Twitter. Information from The Associated Press was used in this report.