Owners Approve Sale of Dodgers to Murdoch
In an unexpectedly one-sided vote, major league baseball owners Thursday overwhelmingly approved the purchase of the Los Angeles Dodgers by Rupert Murdoch’s Fox Group for about $311 million, the most ever paid for a professional sports franchise.
The vote puts one of baseball’s most storied ballclubs in the hands of one of the world’s most unsentimental and pragmatic businessmen. The Australian-born Murdoch has gained a reputation for ruthless competitiveness in assembling a worldwide empire of television, newspaper and publishing properties, which were valued in 1997 at nearly $27 billion. Among those assets are broadcast and cable TV rights to games of 22 of the 30 major league baseball teams.
The transfer also ends baseball’s oldest family dynasty. The O’Malley family had controlled the team since Walter O’Malley bought a majority interest in the then-Brooklyn Dodgers in 1950. O’Malley, who moved the team to Los Angeles in 1958, died in 1979.
“This is a happy and proud day,” said his son, Peter O’Malley, who put the team up for sale in January 1997. O’Malley added that he was confident that Fox would maintain the Dodger tradition and “be a great contributor to the baseball industry.”
According to an arrangement announced last week, O’Malley will remain with the franchise for at least the next year as chairman of the board. His protege, Executive Vice President Bob Graziano, will become Dodger president and chief executive, with day-to-day responsibility for running the team under its new ownership.
Fox Group took control of the franchise, which includes Dodger Stadium, the team’s Dodgertown spring training facility in Vero Beach, Fla., and another training site in the Dominican Republic, immediately after the vote. In a statement issued from London, where he was tending to other business, Murdoch said he was pleased to become a more active partner with organized baseball.
“Since Fox entered sports, we have been amongst the strongest believers and supporters of major league baseball,” he said. “As owners of the Dodgers, we will work hand in hand with the other owners to further assure the long-term growth and success of America’s pastime.”
Despite rumors that Murdoch’s aggressive business practices might stir up serious opposition to the deal from other owners, only two teams voted against the transaction, which required approval by 12 of the 16 National League clubs and eight of the 14 American League clubs.
The sole “no” vote in the National League was cast by Ted Turner of Time Warner Corp., which owns the Atlanta Braves. Turner, who has waged a long and bitter personal war with Murdoch and who was attending his first owners meeting in nine years, had long been expected to vote against the sale as a personal gesture, especially if it seemed clear that it would pass anyway.
Business associates of both men, however, noted that Time Warner and Fox are entwined in so many joint ventures outside baseball that there was some doubt that Turner would have cast a decisive vote against the deal.
Turner made a calm and reasoned speech against the deal for about five minutes during the first day of the two-day owners’ meeting Wednesday, sources said. He left the meeting by a back door immediately after Thursday’s vote, an observer said, “embarrassed” at the lopsidedness of the vote in favor.
In the American League, only Jerry Reinsdorf, owner of the Chicago White Sox, cast a negative vote. Reinsdorf also left immediately after the vote without commenting on his reasons.
One team abstained, the National League’s New York Mets, whose owners reportedly split on the issue, with Nelson Doubleday in favor and Fred Wilpon opposing.
“The process may have taken a little longer than we anticipated, but the vote was better than we anticipated,” said Peter Chernin, president and CEO of Fox Group and president and chief operating officer of News Corp., Murdoch’s umbrella organization, after the vote.
Opposition to Murdoch’s acquisition of the Dodgers had come down to three issues: whether Murdoch would comply with bylaws requiring that overseas rights to all games be negotiated through major league baseball, rather than individual clubs; whether he might bid too aggressively for top players, ratcheting the sport’s salary spiral up another few notches; and whether he would use his cable contracts with 22 teams to impact the local revenues of those teams.
Before Thursday’s vote, Chernin and Chase Carey, co-CEO at Fox Group, strove to reassure the owners on all counts.
“We have no interest in running the team as a loss leader or a charity,” Chernin said last week in an interview with The Times. “If anyone thinks we’re here to be a stalking horse [for higher player salaries], they will be disabused of that notion.”
As recently as Wednesday, the Fox executives agreed to several changes in the group’s ownership agreement with major league baseball, aimed at strengthening assurances that the group would abide by baseball regulations.
“We had been tinkering and making clarifications in the agreement throughout the process, but I think it helped for the clubs to hear it directly from us,” Carey said Thursday. “We reiterated that Fox is a large company with a lot of interests, but that we operate each separately within responsible business parameters.”
In the end, several owners long rumored to be in opposition fell into line.
San Diego Padre owner John Moores, who had been the most outspoken critic of the sale--he once referred to Murdoch’s pending acquisition as a potential “monster to the north"--dropped his opposition after Fox agreed to the latest changes in its agreement with baseball. The deal, he said, is “OK now, but it’s hard to imagine baseball without Peter O’Malley.”
Another reported opponent, Peter Magowan, managing partner of the San Francisco Giants, said he had been concerned about the potential for conflict in Fox’s cable contracts with those 22 teams.
But he was ultimately satisfied that Fox can operate the Dodgers in a way that “won’t hurt the other teams” and can separate the cable factor so as not to be a problem.
Asked if he was concerned about the amount of money that Murdoch might spend for players, Magowan said: “There’s enough salary escalation without him. It would be hard to blame him for that.”
A third California owner, Walt Disney Co., owner of the Anaheim Angels and the cable sports channel ESPN, had been expected to abstain because of its cable TV rivalry with Fox. But Angel President Tony Tavares said Carey and Chernin had done “a good job of answering questions and adding language [to the agreement] that allayed a lot of the fears” regarding what is “tantamount to an ownership interest” in other teams through the cable contracts.
“I think the Dodgers have had great ownership in the past and will have great ownership in the future,” Tavares said.
The Dodgers won six World Series titles, 13 National League pennants and nine Western Division titles during the O’Malley years. But in announcing that he was putting the team on the block last year, Peter O’Malley said the rising costs of ownership had grown too onerous for a family whose only business income came from baseball.
He also said his decision was prompted by the need for him and his sister, Terry Seidler, to undertake estate planning for their families, as well as his frustrations over baseball’s labor and leadership problems and the failure of L.A.'s municipal leaders to support his effort to attract a National Football League franchise. He had hoped to build a football stadium next to Dodger Stadium.
Almost from the day of the sale announcement, Fox Group emerged as the most promising prospective bidder. Not only could Murdoch afford to outbid others, observers said, but the global scale of his broadcast empire gave him the best opportunities to profitably exploit the high-priced franchise.
The overseas broadcast rules may make it more difficult for Fox to exploit the team unilaterally. But many sports and entertainment professionals believe that Fox Group’s expertise in worldwide programming may help the entire sport promote itself more effectively than it has thus far in Asia, Latin America and other foreign markets.
In Los Angeles, fans can expect higher ticket prices and a comprehensive remodeling to allow the nearly four-decade-old Dodger Stadium to compete better with modern ballparks. Fox is expected to install luxury boxes to attract corporate and affluent season subscribers and to upgrade concession facilities.
On the field, among the new management’s priorities will be signing star catcher Mike Piazza, which may cost more than $100 million.
The Piazza negotiations will obviously involve Carey and Chernin, but they insisted that Graziano will not have to check off every decision with them.
“We deal pretty informally,” Chernin said. “We’re not a bureaucratic company.”
He and Carey said they did not think it a mistake or unusual for Murdoch not to be present on his first day of ownership, that he has international business obligations that would prevent him from taking a daily managerial role in the Dodgers but that he would be “encouraging, caring and deeply involved in overall strategy.”
On his last day as owner, O’Malley said he and his family “crossed the emotional bridge” when they first put the club up for sale. He said Graziano is now accountable and responsible for the operation.
“I’ll help wherever I’m needed, but from a distance,” he said. “Bob is now on the firing line.”
O’Malley displayed emotion only when asked by a New York reporter if he saw any comparison and similarity between his decision to sell and his father’s decision to move the team out of Brooklyn.
“No,” he said, with a degree of sharpness. “My father tried to build a stadium at Flatbush and Atlantic [avenues] and exhausted every effort to do so but was blocked politically. I don’t see any similarities.”
Now the question is, will there be any similarities between the O’Malley family’s long-admired tenure as owner of the Dodgers and what follows?
Times staff writer Jason Reid contributed to this story.
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