Posted on: January 31, 2012 6:07 pm
Edited on: February 1, 2012 5:52 am
At least eight groups advanced to the second round of the big Frank McCourt Dodgers sweepstakes. Several of them look like powerhouses. But one of them looks like a winner of the Dodgers from here.
That would be the Magic Johnson-Stan Kasten group.
For one, that group has Magic Johnson. For another, that group very likely will have Patrick Soon-Shiong.
Soon-Shiong isn't Magic in terms of jump shots, fame or even local cache. But in terms of moolah, Soon-Shiong blows everyone in L.A. away.
Soon-Shiong is reported to have $7.2 billion, and sources suggest to me he will very likely join the Magic-Kasten group. I mentioned this on twitter recently, and the Los Angeles Times, which has been all over this story, wrote soon after that Soon-Shoing is mulling over which group to join. That's very likely the way Soon-Shiong or someone close to him wants it played. But he is a close friend of Magic's, bought Magic's 4.5 percent stake in the Lakers (and is believed to be pleased with that purchase) and is a basketball junkie. It's possible he's holding out like Bill Clinton's buddy Ron Burkle, who appears to be waiting to see who's leading before committing. But if the Magic-Kasten group is in it to the end, and they should be, expect Soon-Shiong to join them.
The L.A. Times identified eight of the finalists as the Joe Torre-Rick Caruso group, Connecticut hedge fund magnate Stevie Cohen, St. Louis Rams owner Stan Kroenke, ex-Dodgers owner Peter O'Malley, Stanley Gold and the family of Roy Disney, L.A. real estate mogul Alan Casden and the Leo Hindery-Marc Utay-Tom Barrach group, and I can confirm all of those but the last one. There may also be another one or two groups.
Great list, but even better for McCourt, I have heard the bidding is already in the $1.5-1.6 billion range. That's some serious loot, and means that McCourt, unfortunately and undeservedly, stands to make at least a $1 billion profit. He has run up a lot of debts living like a rich man before he actually was one but will walk away with a couple hundred million. No justice here.
The bidding could get to $2 billion, which is probably more than the storied franchise is worth. But consider all the cash still in the running, and all the competition. This looks like a vanity buy. But these guys are no dummies, so maybe they know better.
If it gets to $2 billion, Cohen would have to be considered a major threat. He is by far the richest guy in the field and reputed to have as much as $15 billion. It doesn't hurt that he has recruited a big baseball name Steve Greenberg, son of Hank, former deputy commissioner and current baseball investment banker, plus respected longtime baseball-basketball agent Arn Tellem. Those were smart adds by Cohen, as MLB likes those guys. Greeneberg has done a lot of business with baseball, including arranging the Astros sale to Jim Crane (though that took a lot longer than most sales). But of course, the big key is the reputed $15 billion. That's a lot of cake Cohen has.
The one issue with Cohen is Cohen himself. He has never been caught in scandal but some of the high-ranking guys at his firm SAC Capital have been picked up for insider trading charges. There's no word he's involved, but it doesn't look good for the firm. I have a friend who knows Cohen and says he's OK. He recalls him as the quirky genius at the University of Pennsylvania sitting in his fraternity in his pajamas and reading the Wall Street Journal. Weird, yes, But disqualifying? Probably not.
MLB is used to having a big say in who gets to own the teams, and in this case they have approval rights over the final eight to 10. You can bet MLB's going to take a close look at Cohen's dealings. There are a lot of rich guys in the bidding, and MLB doesn't want any future issues cropping up. McCourt could try to challenge MLB if it nixes Cohen (or anyone else). But MLB has been given that right. And the clock is ticking. the team is changing hands April 30, so there's little time for legal challenges.
That's one reason I think Magic-Kasten is going to win. They have the money (or they will once Soon-Shiong joins), and no issues. It's all positive with that group. Magic is not only an alltime great athlete, he is beloved. He is also local. And he is a minority, yet another plus. MLB also likes Kasten, who they hooked up with the Nationals after he did a terrific job running the Braves for a long time. They also have Mark Walter from Guggenheim Partners, yet another local rich guy. Then there's Soon-Shiong. He's a wealthy guy who's a genius, like Cohen. But he isn't a hedge-fund guy. He's a biotech genius. That's probably better in baseball's eyes. (And everyone else's, too.)
Mark Cuban and Dennis Gilbert headed groups that didn't quite make the first cut, and there's speculation that it's because Gilbert is close to MLB commissioner Bud Selig. That's not a good reason. Nor was it likely determinative. If anyone's really close to Selig, it's Torre, then maybe Kasten. In any case, while McCourt may be a fool, he isn't foolish enough to eliminate the highest bidders over petty disagreements, or even dislikes.
The Gilbert group, which also contained L.A. money men Jason Reese and Randy Wooster plus talk show icon Larry King, would have made a great choice. But they didn't bid high enough to make the final cut. It didn't help that King publicly ripped McCourt. But again, this is about the loot, not likes and dislikes. Torre was McCourt's manager, and he knows better than anyone bidding what McCourt's about, but Torre is no fool. He isn't about to say what he thinks of McCourt, at least not publicly.
Let's just assume they all think McCourt is somewhere between a goofball and scoundrel, and let's forget about that.
Then know that this guy is about to become one very rich goofball.