Terms of Dodgers sale to be filed Friday
SAN DIEGO — Frank McCourt and Magic Johnson sat next to each other Thursday, the outgoing owner and the most famous of the incoming owners watching the Dodgers play on opening day.
For McCourt and for Johnson, the work in the Dodgers sale is done. For the attorneys responsible for turning a winning bid into contractual agreements that satisfy the U.S. Bankruptcy Court, the race is on.
The terms of the sale are scheduled to be filed in court Friday, the first of several steps required before April 30, when the deal is set to close.
The court is expected to approve the sale April 13. However, the sale terms will be reviewed closely by attorneys for Major League Baseball, Fox Sports and McCourt’s ex-wife, all of whom have reserved the right to object.
MLB could mount the most significant challenge, though the league does not intend to derail the sale and in any case appears to lack the legal authority to do so, according to people familiar with the sale process but not authorized to discuss it.
Johnson and veteran baseball executive Stan Kasten are fronting Guggenheim Baseball Management, the group that agreed last week to buy the Dodgers for $2.15 billion, a world-record price for a sports franchise.
The league generally has the final say over a franchise sale. However, in order to get McCourt to sell the Dodgers, the league agreed to preapprove a number of bidders and let McCourt pick the winner, with the process overseen by a court-appointed mediator.
MLB owners approved the Guggenheim bid, 30-0. The group at that point had offered about $1.6 million, and the league had reserved the right to review the financial structure of any group whose offer was raised substantially in the final bidding.
Several owners have expressed concern that a significant amount of the purchase price is expected to be funded by Guggenheim-controlled insurance companies, according to the people familiar with the sale process.
Guggenheim is expected to add local investors after the deal closes, which would reduce the reliance on insurance funding, but the league cannot mandate any such change as a condition of the sale, according to one of the people.
Joseph Farnan, the retired federal judge acting as the mediator, would probably reject any MLB challenge on the basis that the basic financial terms of the deal have not changed from the one the league already had approved. That is, there are no new investors, and there is no added debt because the bid remains all cash except for assumption of the Dodgers’ current debts, according to one of the people.
Fox Sports had reserved the right to challenge any involvement by rival Time Warner Cable in a new Dodgers ownership group. Guggenheim has no deal with Time Warner Cable, according to two of the people, leaving the new owners free to launch a team-owned cable channel or auction the Dodgers’ television rights among Fox, TWC or CBS.
Frank McCourt must pay his ex-wife, Jamie, $131 million in a divorce settlement. She has asked the court to consider whether she can claim proceeds directly from the sale rather than wait for Frank McCourt to pay her afterward.