NBA legend Magic Johnson and longtime MLB executive Stan Kasten lead the group that agreed yesterday to purchase the Dodgers from owner Frank McCourt for $2.15 billion. The sale price of the Dodgers shatters the previous MLB record of $845MM and bodes well for the 29 other owners. Here’s some of the reaction to last night’s news:
- The new Dodgers owners are buying the team with cash rather than financing, Bill Shaikin of the LA Times reports (Twitter links). MLB’s review of the sale is expected to be a formality, since no debt is being added.
- Kasten told Shaikin he doesn't plan to make changes to the Dodgers' front office. "I go in assuming everyone is doing their job properly," he said.
- Estimates for the total value of the Dodgers’ upcoming TV deal are as high as $4 billion, David Wharton of the Times writes.
- Peter Gammons of MLB Network points out that prospective free agents such as Andre Ethier, David Wright, Matt Cain, Cole Hamels and Mike Napoli benefit from the sale of the Dodgers (Twitter link). The presence of another potentially aggressive bidder should help top free agents.
- Hamels’ intentions are clear, ESPN.com’s Buster Olney reports (Twitter link). The Phillies can offer market value and extend him now, or he’ll wait until after the season when someone else will spend big on him.
- Though MLB owners have only officially approved the Johnson-Kasten bid at $1.6 billion, it’s extremely difficult to see owners objecting to the $2.15 billion sale price at this point, as Jon Heyman of CBSSports.com points out (Twitter link).
- Johnson invested way more than a million in the bid, Yahoo’s Tim Brown reports (all Twitter links). “He has significant money," one insider told Brown.
- The fates of GM Ned Colletti and manager Don Mattingly haven’t been discussed, but immediate changes seem unlikely, Brown writes. Kasten and Colletti have a good relationship and have spoken often in recent weeks.
- Jon Paul Morosi of FOX Sports will understand if Dodgers fans are rejoicing in response to the news.
Would love to see an Ethier extension and a Matt Cain signing. If I were in charge I’d hold off on Napoli and Wright and throw lots of money at Joey Votto in a couple years. Of course, priority #1 should be taking care of Clayton Kershaw.
I agree with Kershaw and Cain, but I wouldn’t be heartbroken is Either is gone. Hopefully, he has a good first half and gets traded so the team sees some return. Not that I don’t like him, but I don’t feel he is going to be worth the money he is going to want to stay in LA.
I’m not a fan of LA or SF, but if I was Matt Cain, it would take a heckuva lot of money to convince me to leave SF for LA. He’d become the most hated man in SF overnight.
Although my heart breaks at the thought of Hamels somewhere else, I can’t say I blame him for wanting the same thing that has been granted to guys that had no (or nearly no) previous affiliation with the team (Halladay, Lee, Papelbon).
3/4 of NYY fans, as well as Hankie and Hal already have sized up Hamels for pinstripes. I can’t see him resigning with Philly, just the talk of him wanting to stay as him trying to keep that hate talk from the Philly fans during 2012 to a minimum, since we all know how rowdy they can get.. See JD Drew as an example when they think they have been jilted.
Say that not to be offensive toward Philly and would like to see him stay, but they have to get priorities, or choose them and not sure in which direction they are going to go. As have already stated many times here.. They already threw away 33m on Rollins and have to make up their minds on Victorino and shortly Pence as well.
As excited as I am that the Dodgers will finally be buyers in the free agent market, it worries me a bit that the Yanks, Red Sox, and Phils were relatively quiet this offseason. That makes me think that the Dodgers will have to overspend to get the top targets.
Teams always have to “overspend” to sign the free agents they want, by definition. They have to outbid everybody else.
Fair enough. My point is that the Dodgers will have to overspend more than usual because the other big players will all be throwing the big bucks at Hamels and Cain. More bidders with more money means a higher purchase price.
I’m not sure what “more the usual” means since the same rule of the market applies. The only difference is that Dodgers should become full participants in the free agent market and can now buy from the top shelf.
Why are you forcing an argument? Bidding wars result in paying higher salaries. If only 1 team offers Cole Hammels a contract they will get him for a lower price than if 2 teams want him. If the 2 teams that want him are the Yankees and Red Sox they will end up paying more for him than if the only 2 teams that want him are the Pirates and the Royals. And if you want to be picky, I don’t agree with your statement that teams “always have to overspend to sign the free agents they want, by definition.” That is clearly not true. If, for example, the Pirates are the only team to offer a player a contract they will not have to “overspend.” They will pay what they want, presumably market value.
If only one team wants a player he comes cheap. That kind of goes without saying, don’t you think? The Dodgers now can presumably be full participants in the top free agent market. Will that tend to drive up the asking price of top free agents? Of course it will. For the Dodgers more than any other team? Of course it won’t.
If only one team wants a player, he comes cheap…unless the team is the Yankees, and the player is Alex Rodriguez.
Any team that bids against themselves gets what they deserve.
Ya because signing hamels will definitely put them under the 189 million that they want to be under. He will resign with Philly
East Coast Bias
This may have been true before the Pineda/Montero trade. Fans will be okay if next year’s rotation is CC, Pineda, Nova, Hughes, Banuelos. Depends a lot on how Hughes and Nova do this year though…
also depends on how Pineda does. People forget that the kid has all of one season under his belt and that was in the AL West.
I really don’t think it will matter how well Hughes/Nova does. Hamels is a power lefty, something NY has target forever and what they would love to have at Yankee stadium. Can you imaging CC + Hamels back 2 back at that place? 2 lefties, at a place where RH power goes to die? They would also match up (short term at least) well vs Boston and AGone, Ells, CC etc..
I think Hamels would be another case where Hankie and Hal might just over rule cash and get involved if they feel he is not being aggressive enough and me? Hamels is the one case, where a Steinbrenner would have been correct to intercede in negotiations thus far if the GM was not pursuing a FA hard enough.
East Coast Bias
I can see that happening, but you can’t have both. Either they get Hamels, or come under the lux tax for 2014.
The only other alternative is not signing one of Cano or Grandy, and if it comes to that, then the obvious choice is Granderson that they let walk.
Not that want to draw any ire of NY fans here.. But if there *is* a choice of having Hames/Cano?grandy? I would allow Granderson to become a FA myself and be looking for an alternative after 2013, his age 32 season over the 13m and I don’t see giving him the 5-6 years deal (guess of course) and 17-20m AAV he will probably be looking for. Hamels, a then 29YO power lefty would seem to be a wiser choice.
Cano is a must sign of course.
Now.. That is a Red Sox Fan’s perspective and I think looking at it rationally (I think) and would much prefer for Hamels to just STAY in Philly…
East Coast Bias
I agree with you on that. If I had to choose, Cano is priority, followed by Hamels then Grandy. Especially if Mason Williams continues to impress in the minors.
I’m inclined to agree, but my fear is that Mason Williams turns out to be Brett Gardner, Part 2.
If Mason Williams becomes Brett Gardner, Yankees fans should rejoice.
Your opinion regarding Hamels and NY is all wrong! Hamels is no where on the radar of Yankees fans, especially the 3/4 of us you claim. Neither Hal or Hank have mentioned Hamels or any Philly pitcher for that matter. What your posting sounds like is ‘Old Red Sox fan paranoia’ more than anything factual.
Yankees may have some interest in Hamels, but nothing out of this world.
Keep in mind that Cashman made the trade for Pineda and got another good young arm, Jose Campos in the deal. Besides the names of Betances and Banuelos who most have heard of the Yanks have guys named Mitchell, Warren, and Phelps. Though not as popular, these guys may be better at the moment.
The whole idea behind the Pineda deal was to stock up on good starting pitching and not have to pay for high priced FA’s. Keeping Garcia and bringing back Pettitte with Kuroda for a year means they won’t have to rush these young guys, as well as having ‘injury insurance’ for the rotation. Hal and Hank have kept their hands out the cookie jar since the Soriano signing, so Cashman won’t need to be spending big on FA arms anytime soon.
I’m sure you secretly covet Hamels and your paranoia has you seeing Yankees with a check book over your shoulder.
Hopefully Colleti isn’t around for much longer. i can’t imagine it’s the best PR move to keep him around, simply for his association with McCourt (not even for the reason that he is a terrible, awful GM).
I think the Dodgers make one or two big FA signings this off season (likely Cain or Greinke) but increase payroll through international FA signings and possibly increase payroll via a trade or two both during this season and during the off season.
I think this season makes or breaks Colletti. It would be hard to fire him if the Dodger surprise everyone and make the playoffs.
Maybe, but I would like to see how Colletti performs with a real payroll budget. He’s put together a team on the cheap that can at least contend in this division. Let’s see if the new ownership gives him some financial flexibility come July, and if so how he uses it. Until then I reserve judgement as to whether Colletti should stay on as GM.
Totally agree. He could change a lot of the perception about him if he is successful with a real payroll. Then again, some of his past moves that he gets criticized for came before the divorce, when he did have more payroll. So we will see.
Every GM comes in for criticism, it goes with the territory. Everybody always knows what was the best move after the fact. But a GM has to know before the fact. Of all the supposedly great prospects that Colletti has traded, I can think of only a couple who are actually playing the bigs today. He has also traded for some real impact players, and the other thing nobody gives him any credit for is hanging onto impact players. Kemp would have gone in 2010 if some fans had their way. That’s one dog that didn’t bark. The new owners are talking about keeping a pat hand for now, and I think they should.
Kemp is definitely a win for all involved. And aside from Carlos Santana, I am having trouble remembering any really good prospect that he traded that is an impact player. I see no reason to change now either, the season is about to start and the deeds are done.
My concern is what he does next offseason. There will be very little forgiveness if he doesn’t land a marque name. Then again, he won’t get any love because he will “overpay.”
Santana is obviously the biggest loss depending on how you value free-swinging power hitters who strike out a lot. The other former Dodger with an everyday MLB role is James McDonald. He seems to have become a journeyman at best and last I heard had been demoted to swing man role in Pittsburgh. Ned traded away lots of marginal players like Thurston, LaRoche, Hu, and DeWitt, and picked up good utility players such as Carroll and Gwynn. Heard all the arguments against those moves at the time but they seem to have worked out.
Colletti should be let go based on the Juan Pierre, Jason Schmidt, and Carlos Santana deals. Logan White for GM!
If that’s the case then every GM should be let go, because they’ve all signed big contracts with players who got hurt. As for Pierre, I can’t forget how handy he turned out to be especially when Manny was out. Played his freaking heart out in the second half of ’09 even though he’d been reduced to a role player. Helped get us to the playoffs that year as I recall…
It’s pretty clear that Ned’s failure rate is much higher than league average.
Clearly. And all you need as evidence to prove your point is to say so.
I wouldn’t say he’s put this team together “on the cheap.” Dodgers are still in the top 10 in payroll, and he’s done a pretty terrible job. I think he could have put together a better team spending more appropriately.
Check again, the Dodgers are about 13th or so in payroll this year. Under $100m, close to the MLB median. Keep in mind also that two successive owners have decimated the Dodgers farm system, once the envy of baseball. This alone ties a GM’s hands. Little talent coming up to field, less to trade, and for a team in a market this size, very limited spending resources. A recipe for mediocrity. Even so, in the pre-divorce seasons, the Dodgers were repeatedly in the playoffs.
they were 12th in 2011, and with $1 MM of being the 10th highest payroll.
I understand everything else, but I still say Colletti has been absolutely irresponsible in overpaying veterans and back loading contracts.
Yes I know they were under the top third in payroll in 2011 and will drop down a notch or two with the smaller budget in 2012, final numbers TBD. A GM is not going to backload contracts if he has a choice. That call comes from ownership. Go ahead and blame Colletti for bad deals he might have made, but not for working for Frank McCourt.
This team under Ned has not been as bad as it could (or probably should) have been. He was at the helm of 4 or so playoff seasons before the last two and he did it with virtually no one in the farm system, which he inherited. He drafted guys like Kershaw and Kemp, traded for Ethier, retained Billingsley at a reasonable rate and got value out of the likes of Andy LaRoche, Caesar Izturis, Milton Bradley, etc. He may have done some things that are rather puzzling, the Manny and Uribe signings, but they aren’t so over the top as to count him among the Tony Reagins or Steve Phillips of GM’s.
Overall, though I have called for his head (and mustache) on many occasions, I am not so eager to string him up right now. I am not so pessimistic about this year as some. 84-87 wins is my prediction.
I really doubt Colletti drafted Kershaw and Kemp. To the best of my knowledge, he inherited them. Logan White and DeJon Watson were very instrumental in scouting those guys.
To his credit, the Ethier acquisition was probably his brightest moment as GM.
You are right about Kemp, he was drafted in 2003. Kershaw was drafted in 2006, Colletti started in 2005. You are also correct about the scouting. However, if we critique a GM for his drafts and trades, we also have to credit him for the same.
Mike Napoli? Nice bat but….
Where do you play him?
First base. Time for Loney to move on.
Perhaps catcher for a year or two and then first base. By all accounts, his defense has improved behind the plate the last year or so.
I don’t know how free-spending the new Dodgers ownership might be. I can’t see them doing much more than giving Kershaw a nice extention. Priority #1 for new ownership has to be stadium renovations. Turn that place into a real money maker with a decent investment.
hopefully they spend freely but intelligently. Dodger Stadium is already a pretty incredible experience and a new TV deal should bring some cash in.
I’ve got tickets for home game #2, as I did last year. But I think this year the crowd will be bigger and happier.
Agreed. I was looking for opening day tickets and the prices have really gone up since the overnight announcement. I am happy, but it will mean traffic is once again a nightmare.
I’d imagine. I own a share in a season ticket. Opening day always goes to the person who runs the ticket club and I try to draw the day after. Also got the last game of the season, so that’s wishful thinking on my part! Anyway the resale market for the tickets I can’t use suddenly looks a lot better! Couldn’t give them away last year, literally. Even with reserve parking.
That’s one thing I’ll never understand about other teams. No matter how bad the Cubs are year in and year out, I can always get at least face value for my Cubs tickets.
For one thing, Dodger Stadium seats about 15,000 more people. For another, Dodger fans seem to respond to whether their team is a winner. And third, we just went through two years of ownership hell and a lot of fans stayed home on principle. Other than that, I have always been able resell my tickets when I’ve wanted to, sometimes for considerably over face value. Just not in the last two years.
Yeah I’ve had the same luck up until last year and I think the year before when I couldn’t (literally) give away tickets. I has field tickets one time I was trying to sell for face value and ended up selling them for $10/per because nobody else wanted em.
I think you’re right this is going to turn things around. Have fun at the opening series and hopefully they have the division wrapped up before the last day!
On a “Nerdy” Economics Note, does anyone see how in the world the Dodgers are worth $2.15 billion? I mean there has to be some “Fuzzy Math” here.
There’s debt of 1.1 billion. I sincerely doubt there will be any debt forgiveness by any of the creditors! So my question is how in the world will the new owners make any money on this deal? Are there any Math or Economic Wiz’s out there who can enlighten me? The bottom line is this deal seems a bit “Unreal” to me to say the least.
as far as i understand it, mccourt must use that $2.15 billion to pay off all of the creditors. so basically the new owners come in with a clean slate (or at least only owing their own debt for the money they borrowed to purchase the team)
This is how I understand it as well. And with the new TV deal upcoming, the owners are in a great shape to make a TON of money. Especially if they can place a winning team on the field. It will just take some time.
*adjusts bridge of glasses with index finger*
The value of any entity lies in it’s future ability to generate revenues. These futures revenues are then discounted back using the time value of money to arrive at a present value.
With the Dodgers you have ticket sales, concessions, merchandise, etc. like all teams. However, you also have the value of the Real Estate. 250 acres surrounding the ballpark. Currently you’re getting $25 (or whatever) every time someone parks their car there, but you could easily build hotels, restaurants, malls, whatever on that land. You could sell this land outright, lease it to developers, or set up a joint venture cutting yourself in on future profits of whatever operates there.
Also, the TV rights will soon be up for bid. In a large media market like LA, we could see a contract with Fox or Time Warner in the billions. This is almost like free money to a franchise. It costs the Dodgers nothing to let someone else run cameras and microphones.
All of the debt will be paid off by McCourt including the big chunk he owes to the ex. That’s how the bankruptcy court settled the matter. McCourt will have to console himself with about $1b in profit.
The team was bought with cash, there will be not debt to start off with the new owner. That being said, the new tv deal is already reaching heights of $4 Billion for 17 years, thats over 235 million each year