Magic Johnson, Chicago's Guggenheim Partners buy LA Dodgers for $2 billion

Magic Johnson, Chicago's Guggenheim Partners buy LA Dodgers for $2 billion
Will Dodgers make Magic?

Magic Johnson's won again. The 5-time NBA Champion with the LA Lakers, a National Title with the Michigan State Spartans, and current winner of the battle against HIV - a fight in which he has been battling since the early-90's. Now Johnson and local Chicago Guggenheim Partners have won the rights to own the Major League Baseball Los Angeles Dodgers.

According to ABC News, Mark Walter, chief executive officer of the financial services firm Guggenheim Partners, would become the controlling owner.

The group, reportedly bought the team for $2 billion from previously embattled owner Frank McCourt. It appears that Magic will assume an active role in the team's day-to-day business and will look to be very active in the Dodgers upcoming free agency period, in the summer of 2013.

This is a historic moment in many ways, as Magic will be the first black owner of any Major League Baseball team in the history of the sport. It is also a record breaking moment, as the $2 billion purchase is unprecedented. The Chicago Cubs were bought for over $860 million and no team has surpassed the billion dollar threshold. The LA Dodgers were also the first professional baseball team to sign a black player in Jackie Robinson.

Magic Johnson and company doubled that. In a statement, Johnson announced his excitement for becoming a owner in the MLB,

"I am thrilled to be part of the historic Dodger franchise and intend to build on the fantastic foundation laid by Frank McCourt as we drive the Dodgers back to the front page of the sports section in our wonderful community of Los Angeles."

It will be interesting to see what lies in store for the slumping franchise. Although, with the runner-up MVP in Matt Kemp, a championship mindset in new owner Magic Johnson, and more money than I would know what to do with - the team looks to make an immediate impact now in the National League in MLB as a whole.

Congratulations to Magic Johnson and the Chicago-based Guggenheim Partners.Guggenheim Partners

CHICAGO TRIBUNE VIDEO

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  • The 2-1/4 times the Cubs certainly surprised me. The Fox TV contract can't be that good.

    It was also reported in Forbes that McCourt clears $800 million after settling with his wife in the divorce case that precipitated most of this.

    Of course, in what is undoubtedly a limited partnership deal, the question is how much of Magic's own money is tied up in this?

  • I was surprised as well, however the Cubs were just as much a mess as the Dodgers - sans the messy divorce.

    I think Magic's money may not be a majority of the pot, but his image and presence will be more in the day-to-day and marketing. So long-term he may have more at stake with this franchise.

  • My question now is - even though I like the Ricketts, where was this "Guggenheim" group when the Cubs were up for sale.

  • In reply to Curtis Shaw Flagg:

    They apparently are in the investment management business, so apparently not much different than the TD Ameritrade Ricketts Family.

    The only thing that would be relevant goes back to why the Cubs were worth $855 mil. (or so) when the Dodgers were worth $2 bil. I assume that the question wasn't asked for the purpose of finding a bigger fool to line the pockets of the Tribune's bankruptcy creditors (which is one thing the two sales seem to have in common). You have to throw into the Cubs deal such things as Zell wanting it mostly debt so the Tribune didn't have a capital gain over its basis of $20 million, the facilities at Wrigley Field probably neeeding $400 mil. in rennovations, assuming bad contracts, and Cuban reportedly saying that he didn't see how it was worth more than $500 million (for whatever credit you want to give reports that Selig wouldn't let Cuban in, despite his money).

    And, as I noted above, it doesn't say which partners put in how much money, just that Magic would be the face of the franchise and do community outreach work,and a Guggenheim would run the business end.

  • Magic is a figure head and that is all. He probably didn't invest all that much and he probably only personaly owns somewhere between 1% & 5% of the team to fullfill his role. To call this a minority owned franchise is a bit of a joke.

    The difference between the Cubs sale and this Dodgers sale can be linked to two factors. The real estate surrounding Dodgers Stadium (parking lots) which I'm sure Guggenheim is looking to some how sell down the road to recoup their investment in the team. Wrigley obviously doesn't have 40 acres of parking lots surrounding it. And secondly the recent boom in regional sports cable network contracts. This trend hadn't hit in 2009 when the Cub deal was originally struck. The Ricketts will profit handsomely from this recent trend when their WGN and Comcast deals expire in the next few years.

    That being said, I think this new ownership group over paid. And over paid by several hundred million dollars. No way the Dodgers are worth more than the Yankee's.

  • In reply to Northside Neuman:

    It is a minority owned team as Johnson is apart of the group that bought the Dodgers. Whatever the figure he invested, his impact on the team will far outweigh the dollar amount put down initially.

    And Im sure he did invest quite a bit, Magic is a businessman first, everything else second.

  • Magic isn't a billonaire and I highly doubt his personal net worth is more than $100 million.

    Also he won't be the principal owner of the club, he is a junior partner of the ownership group just like he was with the Lakers that is using Magics face to sell tickets in the L.A. market. The majority controlling owners are a couple of rich white investment bankers in Chicago. End of story.

    Guggenheim Partners is going to try and do a long term land lease for the real estate they now own with the next NFL franchise in L.A. to build their stadium upon. That is where much of the value in this deal lies.

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