Commentary

Sale of Dodgers a complicated process

Thanks to layers of paperwork and MLB, don't expect a done-deal any time soon

Updated: November 5, 2011, 12:08 PM ET
By Tony Jackson | ESPNLosAngeles.com

So what happens now?

As this process of transferring the storied Los Angeles Dodgers from Frank McCourt into the hands of new ownership begins, what should we expect in the first few days and first few weeks? And, perhaps more importantly, how long should we expect the whole thing to last?

Based on conversations with various sources in the first 48 hours after McCourt's intention to sell the club was announced -- all of them speaking on condition of anonymity -- here is a brief look at what we can expect as the process moves forward:

[+] EnlargeFrank McCourt
AP Photo/Mark J. TerrillFrank McCourt agreeing to sell the Dodgers kicked off a process that could take months before a new owner is selected.

For the McCourt camp, the first step is to prepare a sale book to be presented to Major League Baseball, U.S. bankruptcy judge Kevin Gross and prospective buyers. Although the Dodgers are in bankruptcy and Gross will oversee the sale, which is being handled by McCourt's New York-based investment firm the Blackstone Group, there will be no actual auction of the team, meaning the sale will be handled largely in a conventional way. That means MLB will have a lot to say as to which interested groups actually get it on the bidding.

For the interested buyers, the first step is to submit formal applications to get in on the process. Those applications, obviously, consist of a staggering amount of paperwork. At this stage, the interested parties essentially are applying to get a look at the Dodgers financial records, which they must see before deciding whether to proceed to the point of making a serious bid to purchase the club.

"Nobody gets to see those numbers for at least a month," one source said, giving the first indication that there will be no quick resolution.

The applications are then submitted to the Blackstone Group, which, on behalf of McCourt, will select a handful of groups -- five to 10 of them, one source surmised -- it deems best equipped to take part in the bidding.

That, however, represents only the first round of cuts. Next up is MLB, which takes all the groups already selected by Blackstone and vets each one. This also happens before any of those groups is allowed to examine the team's finances.

"They [MLB officials] aren't going to let just anybody off the street take a look at those numbers," one source said.

Once a prospective owner or ownership group has gained stamps of approval from both Blackstone and MLB, only then does it gain access to the team's financials. At that point, most of the groups will hire a financial advisor to go through those numbers and examine them thoroughly. With McCourt having divided much of his Dodgers-related property into approximately 26 separate entrepreneurial entities -- the team, the stadium, the parking lot, etc. -- the Dodgers' financial records figure to be extremely complex and intricate. That likely will further lengthen the process.

"[The financial advisor] will go through it and then say, 'Well, based on this, the team is worth this, and this is why we think that,"' one source said. "They will do a whole, big analysis, and the bid is based on that analysis. You look at income, expenses, projected expenses, projected income, the media [rights] thing, the value of the real estate."

Once all that is done, those prospective owners or groups will submit their bids.

Even at that point, though, it isn't as simple as whoever submits the highest bid ending up with the team. Doing that moves you to the head of the class, but it's a long way from graduation. First, your bid has to be approved by the ownership committee, which is a small, select group of owners. Then, it has to be approved by the executive council. And then, finally, it goes to a vote of all the owners of the 29 other major league clubs, three-fourths of which must vote to approve the sale of the club to that group.

Of course, once it gets to the at-large ownership for a vote, there is little to no chance that group will be rejected. Perhaps Bud Selig's biggest strength as baseball's commissioner is his ability to build consensus. Much like a U.S. House or Senate leader with a bill he or she really wants to pass, Selig isn't likely to allow a prospective owner to be submitted for final approval by the full ownership unless he knows that enough "yes" votes have been secured. Ironically, that is how McCourt ultimately got the Dodgers almost eight years ago.

And don't forget, every step in the process is subject to approval by Gross, the presiding judge in the bankruptcy case. There is little to suggest, however, that Gross is eager to proactively interfere with baseball's normal way of doing business.

At least one published report earlier this week said MLB would like to have a new owner in place by the time the Dodgers officially open the 2012 season on April 5 in San Diego. However, one source who figures to be heavily involved in this process said that while that date isn't necessarily inaccurate, it is completely random and in no way represents a goal for getting the team sold. In reality, the source said, it could take a much shorter time or a much longer one to complete the process.

Sales of major league teams typically take anywhere from a few months to a couple of years to complete. And while in some ways this sale isn't typical, it is going to be handled largely in typical fashion. Given that, there is no way to predict how long all of this will last. All we do know is that until there is a new owner, McCourt is still in charge of the Dodgers, and everyone who is employed by the club still reports to him.

And that means -- for now, anyway -- business as usual.

Tony Jackson covers the Dodgers for ESPNLosAngeles.com.

Tony Jackson

ESPNLosAngeles.com

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