O’My! O’Malley Era Ending

Does Peter O’Malley’s shocking decision to sell the Dodgers--arguably baseball’s most stable and valuable franchise--illustrate the state of the game or the owner’s state of mind?

The answer is probably a combination of the two.

Given what O’Malley said at his Dodger Stadium news conference and what others in baseball confirmed, a variety of factors contributed to a decision that will ultimately end nearly 50 years of family ownership. And, perhaps, the end of an era in that regard.

Among the key factors:

--Estate planning.

Although O’Malley has been the team president since 1970, he shares franchise ownership with his sister, Terry Seidler. Terry and husband Roland have 10 children. Peter and his wife, Annette, have three.

Under current laws, a baseball lawyer said Monday, O’Malley’s beneficiaries would have to pay an estate tax of 55% on all assets after the first $5 million, compared to an overall capital gains tax of about 28% on the proceeds from the sale of the Dodgers.

The estate tax, the lawyer said, might force beneficiaries to refinance or conduct a distress sale.

“Call this a preemptive strike,” he added.

--Disappointment with the city.

O’Malley wouldn’t discuss this, but, given his history of community involvement, it can be speculated that he was deeply disillusioned by the lack of support from the city and neighborhood for his interest in landing a professional football team and building a state-of-the-art stadium in Chavez Ravine.

Although there is no reason to believe O’Malley is selling the Dodgers to give full attention to a renewed NFL pursuit, sources said he believes “City Hall pulled the rug out from under him.” with its insistence that he support the Coliseum as a potential NFL site.

--The labor legacy.

With management and the players’ union finally having agreed to a five-year bargaining contract, the prospect of peace and a partnership with the union might enhance the market, making this the right time to sell.

O’Malley denied that the agreement had anything to do with his decision and insisted that the labor turmoil is a thing of the past, but he is coming off four years of a distasteful relationship with acting Commissioner Bud Selig, who did not involve O’Malley in important decisions and who may remain as full-fledged commissioner, despite his denials and the imminent appointment of a search committee.

In addition, although O’Malley supported the agreement and the work of negotiator Randy Levine, he has never been comfortable with the idea of sharing $5 million or more a year with small-market brethren who have yet to display the management skills and involvement of the Dodgers.

--Like father like son?

Not in the case of the O’Malleys. Walter, the father, was a gregarious Irishman and power broker who ran baseball and loved the back room. Peter is far more circumspect and conservative and, although he held a position of influence under Bowie Kuhn and joined the coup that ousted Fay Vincent--a move he admittedly regrets--he did not fight his isolation under Selig and might have wearied of the politics and constant bickering among his peers.

--A dying breed?

That’s how O’Malley described family ownership, saying corporations and group involvement are the wave of the future, that for the family it’s become a “high-risk business.”

Gone are such dinosaurs as Calvin Griffith and Tom Yawkey. Yet baseball never seems to lack for buyers--the 1998 expansion teams went for $130 million each--and the tradition-rich Dodgers, with their stadium and training base and international connections, should be no exception.

Peter Angelos, who set the record of $173 million when he and partners bought the Baltimore Orioles three years ago, said that the Dodgers would surpass that.

But, he added, “Stadium ownership is an overstated proposition. It probably costs as much to maintain Dodger Stadium as other franchises pay government entities for rent. If it cost $200 million to duplicate [Dodger Stadium], it probably isn’t worth half that. Looking at the salary levels, it’s very possible that the return on the asset is minimal.”

The Orioles led the American League in attendance and had the highest per capita concession sales, but Angelos said a $50-million payroll contributed to a loss of about $5 million and that--despite media skepticism--he accepted O’Malley’s 1995 claim that even the Dodgers finished in the red.

Perhaps, but computer magnate John Moores, who bought the San Diego Padres for $80 million two years ago, said Monday that O’Malley has the most valuable franchise in sports, that he wouldn’t be surprised if the ultimate price was $500 million and that he might be among those calling if he lived in Los Angeles.

Moores isn’t thinking of moving, but keep an eye on Arco, a major community player, and bet that Michael Eisner, with O’Malley’s announcement Monday, was regretting committing $120 million to Jackie Autry’s estate planning.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

End of an Era

* THE SALE

Peter O’Malley announced that the Dodgers are on the market because he wants to diversify the family estate. A1

* JIM MURRAY

The O’Malley name is synonymous with the Dodgers, but in 1942, Walter O’Malley was a man with little interest in baseball. A1

* PAGE TWO: RANDY HARVEY

This might be the best thing for the financial futures of the O’Malleys and the Dodgers. C2

* NATIONAL REACTION

From Peter Ueberroth to Bud Selig to a Brooklyn bar owner, the baseball world was amazed by the announcement. C5

* DODGER REACTION

Peter O’Malley says it will be business as usual, but employees know that can’t be true. C5

The O’Malley Years

Price in millions to buy from Branch Rickey in 1950: $1.05M

Years owning Dodgers: 47

Managers: 5

World Series titles: 6

National League pennants: 15