Perceptions matter in Dodgers sale
Near the end of a process that has felt much longer than it really was, the choice in front of embattled Los Angeles Dodgers owner Frank McCourt almost seems simple.
And yet the choice between the three groups feels rather striking because of the different messages selecting them would send.
Rightly or wrongly, choosing the group led by St. Louis Rams owner Stan Kroenke would suggest that McCourt is looking for credit or a role in luring the NFL back to Los Angeles.
Rightly or wrongly, choosing the group led by billionaire Connecticut hedge-fund manager Steve Cohen would suggest that McCourt opted for what is perceived to be the best financial deal, as Cohen is reportedly willing to put upward of $900 million of his own money into the deal.
And, rightly or wrongly, choosing the group fronted by Magic Johnson and veteran baseball executive Stan Kasten and backed by Mark Walter, the CEO of Guggenheim Parters, would suggest that McCourt made the popular choice.
You wonder how much any of this will factor into McCourt's final decision.
It feels naive to think anything other than the bottom line matters to him. While his tactics have often been disruptive, there's no denying that McCourt has negotiated and litigated himself into a rather brilliant place: poised to sell the franchise for at least three times what he paid for it, recoup all his debts, pay his ex-wife Jamie McCourt $131 million, a sum far less than what he will end up pocketing, and determine who the team's next owner will be.
And yet over the past few weeks, word around town is that McCourt is not only thinking about intangible issues, but they are weighing heavily on him, specifically in regard to Johnson's group.
Could he really say no to a beloved civic legend? To the only man in the auction who has lived and is loved here? To African-American ownership of the very franchise that broke baseball's color line? To a man whose second career as a businessman and civic leader rivals his Hall of Fame basketball career? To a businessman who aligned himself with Kasten, who has run franchises in MLB, the NBA and the NHL and is considered an ally of baseball commissioner Bud Selig?
Those questions have hovered over the process since Johnson announced his bid in December. At the time, he was one of a half dozen Los Angeles legends to step forward and offer to lend his name and credibility to a bid. Between Johnson, former owner Peter O'Malley, former general manager Fred Claire, former manager Joe Torre and former Dodger greats Steve Garvey and Orel Hershiser, Dodgers fans had almost too many choices to get excited about.
After this rigorous, two-month bidding process, Johnson is the only Los Angeles legend left standing and the prospect of turning him down has to give McCourt pause. Hall of Fame baseball writer Ross Newhan was the first to note that McCourt has been asking associates and community leaders how it would play if he turned the Johnson group down.
Since then, as Cohen's group has picked up momentum with the addition of Los Angeles-based billionaire Patrick Soon-Shiong -- one source close to the process even called Cohen "the lead dog now" -- the issue would seem even more pressing.
None of this is a knock on Cohen or Kroenke, both of whom seem well-suited and well-intentioned in their pursuit of the team.
It's just that neither of them offer McCourt much in the way of popularity points, while choosing Johnson's group would be one of the most popular moves McCourt has ever made.
Mostly because he is famously reticent and the dots are so easy to connect, Kroenke's bid has been portrayed and digested locally more as a plan to bring the NFL back to Los Angeles than a genuine interest in baseball ownership. That could be false, but that's the perception.
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Cohen has the unfortunate timing of being a hedge-fund king at a moment in our country's history when anyone associated with Wall Street is suspect. It doesn't help that four of his former employees have been accused of insider trading. Neither Cohen nor his company have been charged or indicted, but it's still not a comfortable place to be.
"Everyone gets lumped in together," Cohen said in a 2010 Vanity Fair profile. "No hedge fund caused a problem in 2008. Not one. The problems were generated by banks going overboard, and housing prices, risky lending practices. The public is going to be pissed, and I understand that. People lost their jobs. People should be angry. I am, too."
Since then Los Angeles civic leaders like music mogul David Geffen, real estate magnate Eli Broad and Anschutz Entertainment Group (AEG) president Tim Leiweke have spoken positively and publicly about Cohen with the hope that Dodgers fans will give him the benefit of the doubt if McCourt, indeed, selects him.
The problem is that choosing either Cohen or Kroenke means saying no to Johnson, who, despite the popular assumption that he is simply a figurehead for the group, is said by one source to be committing a significant amount to the bid.
Some concerns have been raised that the financing of Johnson's bid, which comes in part from Guggenheim-owned insurance companies in Kansas and Indiana, could be subject to state review, but Indiana insurance commissioner Stephen Robertson rebuffed those concerns Monday, saying the state has no problem with the companies' interest in the Dodgers. And it's hard to see fans worrying about such things, since the financial structure of the groups have already been approved by MLB.
No, this one is pretty simple. At the end of a process that has been anything but, McCourt need only decide one final thing: Can he really say no to Magic?