Magic Johnson cannot become the face of the Dodgers until the sale of the team closes, which is scheduled for April 30. The U.S. Bankruptcy Court is set to approve the sale agreement on April 13.
Major League Baseball retains the right to review the deal, because the $2.15-billion purchase price for the team far exceeds the figure proposed by the Johnson group earlier in the bidding. MLB will scrutinize the structure of the transaction, with its mix of individual and institutional investors, but the league is not expected to challenge the deal. A court-appointed mediator already has approved it.
In addition, the deal is all cash and no financing, so it wouldn’t add to the Dodgers’ already significant debt load. The purchase price for the team itself is $2 billion -- roughly $1.6 billion in cash and $400 million in debt assumption. An additional $150 million is for a joint venture between the Johnson group and outgoing owner Frank McCourt to control the parking lots surrounding the stadium.
Under terms of the deal, no development would take place on the lots unless the Johnson group and McCourt agree. The deal also ensures that McCourt can retain partial ownership of the lots and share in any future development revenue.
The money fans pay to park at Dodgers games goes to the new ownership group.
MLB executive vice president Rob Manfred declined to discuss the specifics of the deal, or of the league’s review process. However, he did say the league is pleased that the Dodgers sold for such a high price -- a world record for any sports team, and almost three times the previous record for an MLB team.
“We think the purchase price paid is an indication of the overall financial health of the industry,” Manfred said. “When Commissioner [Bud] Selig was elected, he told the owners he thought he should be judged on asset values. The Dodgers’ sale price is a strong endorsement of his leadership.”
The sale price also reflects an auction process that enabled McCourt, rather than MLB, to have the final say in selecting the new owner. Once he agreed to sell the team, MLB agreed to let him control the process. McCourt was concerned that MLB would steer the Dodgers to a preferred bidder, perhaps for half of what turned out to be the final purchase price.