It’s one sweet deal for McCourt
If the NFL wants to play at Dodger Stadium, Frank McCourt could be the sole landlord.
In any case, the value of the Dodgers sale could exceed $3 billion.
Those details were included in previously unreleased provisions of the sale agreement between McCourt and the Dodgers’ new owners, Guggenheim Baseball Management. The Los Angeles Superior Court last week denied Guggenheim’s request to keep those provisions secret; The Times obtained a financial summary of the deal Wednesday.
The key provision makes clear that McCourt retains a crucial role in determining whether the NFL returns to Los Angeles. McCourt could win either way: by luring the NFL to the Dodger Stadium site, or by pocketing $150 million if he cannot.
When McCourt sold the Dodgers last year, the sale price was announced as $2.15 billion, for the team, the stadium and half-ownership of the parking lots surrounding the stadium. The deal also calls for Guggenheim to invest as much as $650 million in a real estate development fund run by McCourt -- for projects not on the Dodger Stadium property -- and for him to receive an annual management fee, starting at $5.5 million.
The deal also guarantees McCourt at least $7 million per year in fees the Dodgers pay to rent the parking lots and grants him the option to sell back his stake in those lots to Guggenheim no later than 2017, for $150 million. Alternatively, McCourt could buy back part of the land for the construction of a sports venue.
Although McCourt agreed to sell the Dodgers as part of a U.S. Bankruptcy Court settlement with Major League Baseball, he was not required to sell the surrounding land. As part of a deal designed to preempt a scheduled auction, and after discussions with McCourt, Guggenheim agreed that he could profit from future development and retain a role in the city’s sports future.
“Our goal was to put together a proposal that got a yes,” Guggenheim partner and Dodgers co-owner Todd Boehly said Wednesday. Boehly met with The Times to explain and clarify the financial summary of the deal.
None of the competing bidders were believed to have offered more than $1.6 billion for the team.
Guggenheim informed MLB of the previously secret terms Wednesday. MLB officials declined to comment, as did a representative for McCourt.
However, MLB has asked its attorneys to review the terms, according to a person familiar with league matters but not authorized to discuss them. The league’s concern is that the Dodgers’ parking and operational rights not be harmed by a new sports stadium.
Boehly confirmed that Guggenheim has held preliminary discussions with the NFL.
“They are very much in tune that this opportunity comes as a collaboration between McCourt and Guggenheim,” Boehly said.
NFL spokesman Greg Aiello declined to discuss specifics regarding McCourt or Guggenheim.
“We are interested in several sites in the Los Angeles area and expect to continue talking to developers and landowners as appropriate,” Aiello said.
As of Wednesday morning, Boehly said, he was not sure if the NFL had been informed of the previously undisclosed terms regarding McCourt’s involvement.
“I don’t believe the NFL has all the details at this point,” Boehly said. “It hasn’t gotten to that level of discussion. We haven’t hidden the fact that it is us together.”
Boehly argued in court papers last week that disclosure of “financial details of our relationship with our business partner” could harm negotiations and “delay or altogether deprive the citizens of Los Angeles of a potential sports franchise.”
He said Wednesday that he had “no idea” what effect Wednesday’s disclosure would have on discussions with the NFL but said the league never has indicated to Guggenheim that McCourt’s involvement would make the Dodger Stadium site a nonstarter.
“I don’t think they’re worried about the opportunity being damaged in L.A. because of any individual,” Boehly said.
Boehly said he has had talks with “more than one” sports entity but declined to identify any beyond the NFL.
Under the terms revealed Wednesday, McCourt has the right to buy back all the land necessary for the construction of “non-baseball sports facilities.” If he does not, he can exercise the option under which Guggenheim would buy out his interest in the land.
When the Dodgers were sold, Guggenheim executives cited a provision in the purchase agreements that gave them veto rights over whatever development plans McCourt might propose on the jointly owned Dodger Stadium property.
Although McCourt would be the sole landowner of any parcel on which another sports team might play, Boehly said he believes the land-use documents governing the site and the city approval process would be sufficient to protect the Dodgers’ interests. As one example, the land-use documents specify a minimum number of parking spaces for baseball games.
“There are multiple levels of protection for the Dodgers to ensure the fan experience is not hurt,” Boehly said.
Guggenheim and McCourt have yet to agree on an initial project for the real estate development fund. Any project from that would not be built on the Dodger Stadium land.
Under the terms revealed Wednesday, Guggenheim will make an initial $400-million investment in the fund, which will be managed by McCourt. If that money is fully invested and earns an 8% return, Guggenheim would invest an additional $250 million. The parties would split any profit equally. Upon the “final liquidation” of the fund, the investment capital would be fully repaid to Guggenheim.
Times staff writer Sam Farmer contributed to this report.