TV money could push Dodgers bidding above $1.5 billion
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A new name surfaced in the Dodgers’ ownership sweepstakes on Monday, beyond such familiar contestants as Mark Cuban, Magic Johnson and Peter O’Malley. That Leo Hindery is involved in the bidding could give Frank McCourt more confidence that the Dodgers might sell for more than $1.5 billion.
Hindery founded the YES Network, according to the website of his company, InterMedia, an investment firm that focuses on ‘cable television, broadcast television, print, programming, and broadband opportunities.’ The Dodgers -- and, more specifically, the chance to launch a Dodgers cable channel -- could be one of those opportunities.
The Wall Street Journal reported Monday that Hindery had bid on the Dodgers. He was traveling and unavailable for comment Tuesday.
However, his involvement could trigger a surge of media interest that could lift the Dodgers’ sales price. That could make it more likely that McCourt gets a figure in the range of $1.5 billion to $2 billion, rather than in the range of $1 billion to $1.5 billion.
The Dodgers’ television contract with Fox Sports expires after the 2013 season. The new owner can launch a Dodgers cable channel -- or leverage that threat to spur bidding between Fox and rival Time Warner Cable.
Fox and Time Warner Cable each have expressed interest in acquiring minority ownership in the Dodgers, so as to secure the team’s television rights. In September, the Dodgers told the U.S. Bankruptcy Court that Charter Communications, Dish Network and DirecTV also could be interested in the rights. In December, a team attorney suggested in court that AT&T, CBS or Verizon might also be interested.
In October, former NBA TV President Ed Desser, who represented the Lakers in their negotiations with Time Warner Cable, said he believed the Dodgers’ television bidders likely would be limited to Fox and TWC.
However, the prospect of owning the Dodgers themselves -- rather than paying them billions for their television rights -- could sway media companies and investors to join the bidding. That could force Fox and TWC to do so as well, with the price for the Dodgers escalating accordingly. To launch a Dodgers channel would not be easy. The New York market has four cable sports channels. The Los Angeles market will have five come fall -- Fox Sports West, Prime Ticket, the Pac-12 Network and Lakers/TWC channels in English and Spanish.
In court papers, Desser cited the ‘significant risks associated with launching a Dodgers RSN (regional sports network) in an already saturated market.’
McCourt bought the Dodgers for $421 million. If media companies decide those risks are worth taking, that could help him sell the team for four times as much.
-- Bill Shaikin